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An overview of the world’s leading ERP system
History of SAPSystems Applications and Products in Data Processing
German : Systeme, Anwendungen, Produkte in der Datenverarbeitung
Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira Re named in 1977 Before 1977 : Systems Analysis and Program Development
(German : Systemanalyse und Programmentwicklung)
SAP is both the name of the Company as well as their ERP Product
SAP system comprises of a number of fully integrated modules, which covers virtually every aspect of the business
Three systems developed : R/1, R/2, R/3
Trades on NYSE: SAP
What is SAP? (the software)Enterprise Resource Planning software
Quote-to-Cash (Revenue cycle)Req-to-Check (Expenditure cycle)Plan-to-Produce (MRP)Finance and Controlling
Massive accounting packageTool kitSeries of ModulesBought and customized to your business
Who Uses SAP?“the World’s best run companies….”80% of Fortune 500
CokeConagraCaterpillarExxon Mobile (over 60 instances)ChevronMarathon OilCooper IndustriesNikeGeneral ElectricBaker HughesEnron….?
SAP – ERP and Data FlowManufacturing most popular
Growth out of MRP
9 basic modules
Interconnected and independent
R/3
MMMM
FIFI COCO
SDSD PPPP
PLMPLM
QMQM WMWM HRHR
SAP – ERP and Data FlowData typesMaster data
Vendor masterCustomer masterMaterial master
Transactional dataSales ordersPayments
Meta data
SAP – ERP and Data Flow
Quote toCash
Plan toProduce
Requisition to Check
Sales Order
Sales & OperationsPlanning
DemandPlanning
InventorySourcing
MaterialRequirements
Planning
Delivery
Planned OrderProduction
OrderProduction
Control
PurchaseRequisition
VendorSelection
PurchaseOrder
Goods ReceiptInvoice
VerificationVendor
Payment
Cost Controlling
Financial and Logistics Reporting
Business Information Warehouse
BillingQuote CustomerPayment
QtC
PtP
RtC
SAP Modules
SAP R/3SAP R/3
FIFI
WFWF
PSPS
PMPM
WMWM
PPPP
MMMM
SDSD
HRHR
AMAM
COCO
QMQM
PP – Production Planning
WM – Warehouse Management
PM – Plant Maintenance
AM – Asset Management
PS – Project System
MM – Materials Management
SD – Sales and Distribution
QM – Quality Management
WF – Workflow
HR – Human Resources
CO – Controlling
FI – Financial Accounting
Other SAP OptionsOther Modules, Components, and Grids
CRMBI/BWTreasuryReal EstateEnergy productsSAP Business oneAFS – Apparel Footwear SolutionIndustry specific moduleGovernance, Risk and Compliance
Management DecisionsData driven analysis
What are important pieces of information for a material?
SAP material master 20 different views Average 20 fields per view Several views change by plant
Real time accounting informationAccounts ReceivableAccounts Payable
Management DecisionsProfitability
What is profitable?Who is profitable?Where are we profitable?
Dude, where’s my cash?Inventory – which materialsAccounts Receivable – which customersAccounts Payable – which vendorsOthers – prepaids, accrued payroll, other
expenses
Management Decisions - No MoreNo longer decisions!
When to payWhat to buyWhen to buyWhat to makeWhen to make itWhat to count (inventory stock take)Who to hire (always MBA students)
Management Decision ChangesRemoval of rote/routine decisionsChanges the types of decisions
From how much of product XTo should we sell product X
Flattens the organizationCreates new opportunities
How many analysts does it take…
Costs of Implementing SAPWhat does it cost?
HardwareSoftwareBioware
Cultural changesDifferent organizationChange management
Process changesWhere to start?
Cost of SAP deployment
SAP Implementation CostsAdult diaper time!$50-100 million, typicalBy experience of companies
One company, $50 million for current systemPrevious company, >$250 million
Everything in-house Highly customized
OthersHershey failed(Trick or Treat!)Enron went in smooth and easy
SAP Hardware CostsDo you have an ERP ready data center? – not in $50
MMFire detection and preventionAbove 500 year flood level?In hurricane, earthquake, or tornado zone?Do you have a hot or cold backup site?
$5-10 million depending on sizeMulti-mirroredReal-time backupApplication, database, load balance
Do you need new PC’s?
Software Costs$5-15 million up front
SAP licenses (various modules)Oracle or other database licensesBW or other analyticsAdministration toolsBackup and recovery software (real time?)
Annual licensing/maintenance fees 20%Hint – select the right state and download
Costs of SAP Expertise$10-25 million on hardware and software
$40-75 million on biowareSAP eliminates $10/hr data entry clerksNow you need $100,000+/yr Basis
administrators
Consultants can be expensiveYou want the expensive onesKnow business and technical
SAP ConsultantsLots of consultants
Few have the skillsFind, a finder!
Lots of billing ratesSAP Platinum consultant - $300/hrQuality, independent - $150/hrSomeone who read an SAP book – not worth the
timeGood consultants – know the business!
Technical aptitudeCommunication skills
Cultural ChangesImmediate fear
Job lossesJob changes
Management oversightDashboardsDrilldown
Allocation of costsData is a valuable assetCentralized/Shared processes and resources
Process ChangesWhat changes?
NothingEverything
Optimize your process first!StreamlineLeverage technologyOnly one big change
Document, document, documentCommunicate, communicate, communicate
SAP CareersSAP Business Analyst
Liaison between the business and the techiesGood communication skillsUnderstanding of local business and industry
practicesTechnical trackFunctional trackProject managementBest – Technofunctional that can manage
projectsIT DirectorConsultant
Benefits of mySAP ERP SAP ERP delivers a comprehensive set of integrated,
cross-functional business processes. With SAP ERP, we can gain the following benefits:
Improve alignment of strategies and operationsImprove productivity and insightReduce costs through increased flexibilitySupport changing industry requirementsReduce riskImprove financial management and corporate
governanceOptimize IT spendingGain higher ROI fasterRetain top performersProvide immediate access to enterprise information
Is it Worth It?
YES!!!If done correctly…
Eliminate non-value added stepsImprove management informationSignificant soft cost savingFocus resources