1. Intro to SAP Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration Fall, 2012

2. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.2 SAP R/3 Introduction Enables a company to link it’s business processes Ties together disparate business functions (integrated business solution) Helps the organization run smoothly Real-time environment Scalable and flexible

3. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.3 SAP R/3 Introduction Central relational database ◦Oracle, Informix, Microsoft SQL, etc. Client/Server – three-tiered ERP Components – Oriented towards common identifiable business modules: ◦MM, SD, PP, FI, CO, HR, WM, QM, PM Add-ons: ◦Customer Relationship Mgmt (CRM) ◦Supply Chain Mgmt (SCM) ◦Product Lifecycle Mgmt (PLM) ◦Business Intelligence (BI)

4. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.4 Relational Database Tables: Defines and links a couple of tens thousands of tables of information (25,000+) Advantages ◦Consistent and accurate data ◦Common definitions for terms ◦Shared, but restricted usage (e.g., profiles) ◦Eliminates data redundancy

5. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.5 Client/Server Environment Client ◦Software/hardware combination that can make a request for services from a central repository of resources Server ◦Software/hardware combination that can provide services to a group of clients in a controlled environment

6. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.6 Three-Tier SAP Structure GUI – Graphical User Interface or Web Interface Application server (one or many) Database server (one single location)

7. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.7 SAP Enterprise System Database Application Presentation Browser Client PCs, Laptops, etc. Network Application Servers Internet Transaction Server Web Server

8. Enterprise Systems (history & Evolution)

9. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.9 SAP R/3 Introduction Instance – each install of the SAP R/3 software on an individual application server Configurable – each instance can be distinctively configured to fit the needs and desires of the customer (within limits) Most of the infrastructure decisions, including configuration decisions, occur during project implementation

10. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.10 SAP Configuration The process of tailoring SAP software by selecting specific functionality from a list of those supported by the software, very much like setting defaults (e.g., Word, Access) DOES NOT involve changes to the underlying software code

11. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.11 Programming Code Modifications Changes to the delivered code ABAP/4 – Advanced Business Application Programming (ABAP) This should be done carefully as it can make migration to new versions of the software much more difficult

12. SAP Data Types Required data types: 1.Organizational levels (data, elements) 2.Master data 3.Transaction data

13. Data type: Organizational levels Defines the enterprise structure in terms of legal or business purposes, including l egal entities, plants, storage areas, sales organizations, profit centers:  Client (e.g., 600) ◦ Highest organizational level ◦ Represents the enterprise consisting of many companies  Company Code (e.g., C099) ◦ Identifies legal entities in an enterprise ◦ Central organizational element in financial accounting  Organizational levels in Logistics ◦ Plant (e.g. P099)  Represents factory, warehouse, office, distribution center, etc. ◦ Storage locations (e.g., 10, 20, 30)  A location within a plant where materials are stored

14. Storage Locations Plant Company Code Client BPI Enterprise (600) Pen Company (C099) Pen Plant (P099) RM (30)WIPFG (10) Pen Company (C098) Pen Plant (P098) Data Types: Organizational levels

15.  Organizational levels in Accounting  Client  Company code  Business area  Controlling area  Operating concern  Organizational levels in procurement  Purchasing organization  Purchasing group  Plant  Storage location Organizational levels in fulfillment (sales) Sales organizations Divisions Distribution channel Sales areas Shipping point Plant Storage location Organizational levels in PP Plant Work Center Storage location Shipping Point Data Type: Organizational levels

16. Procurement Client GBI CC US## Dallas DL## Miami MI## S. Diego SD## CA## Toronto TO## Shipping Point DL## Storage Location RM## MI##SD##HD##HH## AU## Perth PE## Central Purchasing Organization (global) GL## Purchasing Org. US## CC DE## Heidelb. HD## Hamburg HH## SF## FG## MI## TG## FG## MI## TG## FG## MI## TG## FG## MI## RM## SF## FG## MI## TG## FG## MI## TO## TG## FG## MI## PE## CA## Purchasing Group North America N## PO DE## PGr Europe N## AU## Asia AS## SAP Enterprise Structure Example

17. Sales and Distribution Client GBI Credit Control Area (global) GL## CC US## SO East UE## SO West UW## CC CA## SO East CE## SO West CW## CC DE## SO South DS## SO North DN## CC GB## SO South GS## SO North GN## CC AU## SO South AS## SO North AN## Distribution Channel Wholesale WH Distribution Channel Internet IN Division Bicycles BI Division Accessories AS SAP Enterprise Structure Example

18. Key Concepts in SAP ◦Long term data that represent entities of:  Procurement ◦ Vendor ◦ Material ◦ Info records, source list  Fulfillment (Sales & Distribution) ◦ Customer ◦ Material ◦ Conditions (pricing, output)  Production ◦ Bills of material ◦ Work centers ◦ Product routings Data Type: Master data

19. Key Concepts in SAP ◦Data generated during executing process (steps) combining:  Organizational levels  Master data  Situational data (who, what, when, and where) ◦Example: sales order  Organizational levels: customer, company code, sales area  Master data: customer master, material master  Situational data: date, time, person, quantities Types of Data: Transaction data

20. The Document concept ◦An electronic record of transactions ◦Each transaction creates document(s) Document types ◦Financial accounting documents (FI) ◦Management accounting documents (CO) ◦Material documents (goods movement) ◦Others Key Concepts in SAP

21. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.21 SAP R/3 Document Principle Each business transaction that writes data to the database creates a uniquely numbered electronic document Each document contains information such as ◦Responsible person ◦Date and time of the transaction ◦Commercial content Once created, a document can not be deleted from the database

22. Key Concepts in SAP The Document Concept: Transaction document Header Line items

23. Key Concepts in SAP The Document Concept: Material Document Document number Created by Date Reference Header Quantity Material Location (Plant / Sloc) Other data depending on process (vendor, customer) Items

24. PEN, Inc. System Configuration Introduction EGN 5620 Enterprise Systems Configuration Fall, 2012 PEN, Inc. System Configuration Introduction EGN 5620 Enterprise Systems Configuration Fall, 2012

25. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.25 Learning by Creating a Model Business Understanding business processes and their integrative nature Understanding SAP organizational structures Combining business processes and SAP organizational structure (i.e., configuration) Test the newly configured system View system outputs - statistics, reports, and graphics

26. January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.26 Pen Inc. Start-up company in the promotional pen business Initially buys and re-sells different lines of promotion pens Sells to both wholesale and retail – procure and distribute Later acquires a production facility to manufacture its own product – produce and distribute

27. Enterprise Structure Plant (P_ _ _) Client (600) Chart of Accounts Company Code (C_ _ _) Fiscal Year Variant Credit Control Area PurchasingOrganization PurchasingGroup ShippingPoint SalesOrganization DistributionChannel Division Sales Area Controlling Area SL10SL20

28. Company configuration ◦Pen Inc. _ _ _US manufacturing Company  Vermillion SD, US ◦Facilities:  One manufacturing plant with warehouse in Vermillion (Plant) ◦ Work Center ◦ Storage Location  10 for Trading and finished goods  20 for Quality  30 for Raw materials ◦ Shipping point ◦Sales Organization ◦Purchase Organization

29. The company to be configured Cost Center Standard Hierarchy ADMIN_ _ _ (Cost Center Group) Acct-Finance Administration Purchasing Information Tech Sales _ _ _ (Cost Center Group) Sales Marketing Distribution-Production Cost Center _ _ _ (Cost Center Group) Warehouse Production

30. Pen Inc. : The company Products ◦Trading Materials  BPEN _ _ _ (Barrel Pen)  CPEN _ _ _ (Click Pen)  PPEN _ _ _ (Premium Pen)  Box _ _ (Pen Box) ◦Finished products  EPEN _ _ _ (Executive Pen)  ESET _ _ _ (Executive Set)

31. Pen Inc. : The company Customers

32. Pen Inc. : The company Suppliers

33. Pen Inc.: Key Processes ◦Procurement (buy) ◦Fulfillment (sell) ◦Production (make) ◦Material planning (plan) ◦Financial Accounting (track) ◦Management Accounting (track) ◦Inventory and Warehouse Management (store) ◦Enterprise Asset Management (maintain) ◦Customer Service (service) ◦HCM (people)

34. Pen Inc. : The company The IS of the Pen, Inc. will ◦integrate and share all services for all business functions in the Vermillion Office ◦Centralize all ERP functions ◦Achieve the primary business objectives:  Reduce Costs  Deliver Best-in-Class Technology to all divisions Information system requirement

35. Exercises: due date – 9/17/2012 65. Initialize Fiscal Period for Company Code 66. Maintain Plant Parameters for Material Management 67. Activate Materials Requirements Planning 68. Define Attribute for Material Types 71. Define Posting Periods Variant 72. Open and Close Posting Periods 73. Assign Posting Periods Variant to Company Code

36. Exercises: due date – 9/17/2012 74. Create Tolerance Groups for Account Postings 75. Setup Payment Program 76. Create Tolerance Groups for Accounts Receivable and Accounts Payable 77. Create Financial Accounting (FI) Document Numbers 78. Review Document Types (Only Watch, and don’t make any changes) 79. Post Initial Cash Investment by Owners 80. Post Purchase of Operating Supplies 81. Display and Review General Ledger Account Balances and Individual Line Items (Only Watch, and don’t make any changes)