SRI BALAJI UNIVERSITY PUNE (SBUP)

BITM
SEMESTER-I-BATCH - 2020-22
ERP SYSTEMS (SAP) - ASSIGNMENT –I (UNIT-I)

(a) Name of Student: Jaya Bharne

(b) Roll no: TM2019322
(c) Reg. No: 09-1311
(d) Specialization: Marketing
(e) Batch: 2020-22
(f) Institute: Balaji Institute of Telecom & Management
(g) Semester: I
(h) Subject Name: ERP Systems (SAP)
(i) Assignment No: I
(j) Submission Date: January 1, 2021
(k) Total no. of pages written: 28
Q1. SAP –THE FUTURE OF MODERN TECHNOLOGY. Explain this statement with
an example.
Ans.:
 SAP stands for Systems Applications and Products in Data Processing. SAP, by
definition, is also the name of the ERP (Enterprise Resource Planning) software as
well as the name of the company. The Software is a European multinational, founded
in 1972 by Wellenreuther, Hopp, Hector, Plattner, and Tschira. They develop
software solutions for managing business operations and customer relationships.

 SAP system consists of a number of fully integrated modules, which covers virtually
every aspect of business management. This system is the 1 st system in the ERP
market. As of 2010, SAP has more than 140,000 installations worldwide, over 25
industry-specific business solutions and more than 75,000 customers in 120 countries.
Other Competitive products of SAP Software in the market are Oracle, Microsoft
Dynamics, etc.

Let’s See the whole process of a business unit:

1. Client contacts the sales team to check the availability of the product.
2. Sales team approaches the Inventory department to check for the availability of the
product.
3. In case the product is out of stock, the sales team approaches the Production Planning
Department to manufacture the product.
4. The production planning team checks with inventory department for availability of
raw material.
5. If the raw material is not available with inventory, the Production Planning team buys
the raw material from the Vendors.
6. Then Production Planning forwards the raw materials to the Shop Floor Execution for
actual production.
7. Once ready, the Shop Floor Team sends the goods to the Sales Team.
8. Sales Team who in turn deliver it to the client.
 9. The sales team updates the finance with revenue generated by the sale of the product.
Production planning team update the finance with payments to be made to different
vendors for raw materials.
10. All departments approach the HR for any Human Resource related issue.

That is a typical business process for any manufacturing company.

Some key inferences one could derive from the above scenario would be:
o It has many departments or business units.
o These departments or business units continuously communicate and exchange data
with each other.
o The success of any organization lies in effective communication, and data exchange,
within these departments, as well as associated third party such as vendors,
outsourcers, and customers.

SAP AS THE FUTURE OF MODERN TECHNOLOGY:

 Today’s information technologies are fast, powerful, and readily available. Your
management team will be able to identify a variety of applications and benefits – in
fact, you may gain a competitive advantage by deploying them. However, the
adoption of any new ERP technology trend will have an impact on your organization
and should be considered in an informed, systematic way.

 In some cases, you may need to develop pilot programs to test new technologies.
These efforts require an investment of time and resources, but they also provide your
team with an accurate understanding of the advantages and disadvantages of taking an
innovative direction. The challenge is to have a proven method for evaluating your
options so you can implement them wisely and achieve your business goals. There are
many new technology choices, including products and services. They are being
enhanced routinely to simplify their installation, application, and ongoing
maintenance and improvements.
Here are some of the popular options available in most modern ERP system today:
 Self-service configuration: Configurable, easy-to-use tools for PCs, tablets, and
phones allow for a better user experience, with both high security and privacy. You
can tailor dashboards, workflows, business rules, and alerts for self-service and
advanced business processes.
 ERP analytics and reporting: Get fast access to your data, reports, and analytics to
turn insight into action. Modern databases, dashboards, and KPIs run In-memory on
the cloud, not on outdated servers. They provide a single source of accurate, real-time
business information as well as built-in document management for checking details in
contracts, specifications, purchase orders, invoices, and other business documents.
This functionality is critical for a growing business.
 A complete, integrated software solution: Rather than using separate software
packages to run your departments, today’s ERP systems have wide-ranging
functionality for customer relationship management (CRM), e-commerce, operations,
supply chain management, manufacturing, field service, accounting, and multinational
management. The old islands of isolation resulting from non-integrated systems
hinder productivity and impact the bottom line.
 Company-wide customer data: Improve customer service with access to company-
wide data. In addition to capturing transactions, the latest technologies capture
information on how your customers work with your team overall. Sales, quoting,
pricing, customer portal, order fulfilment, field service, and costs are rolled up to
evaluate your competitive performance and profitability.
 Artificial intelligence in ERP: Artificial intelligence (AI) can enhance productivity.
Your business information provides insights into your business processes, showing
opportunities to shorten lead times and reduce costs. Expert systems can be built
based on those insights, for example, creating a troubleshooting system for field
service to use when identifying equipment malfunctions.
 Embedded machine learning: Streamline workflows with machine learning.
Computers can “learn” from your data, improving their ability to automate standard
procedures such as determining where to post accounting transactions.
 Extended functionality: In addition to broad software functionality, modern ERP
systems can integrate with other technologies to provide alerts and improve decision
making. For example, the Internet of Things (IoT) integration includes sending and
receiving critical information across your ERP system, equipment, and vehicles.
 Cloud services to provide wide-reaching access: Every company needs fast, secure,
and private access to their business systems. Cloud services meet that need
worldwide, and also provide your team with anytime, anywhere access on mobile
devices such as phones and tablets. Plus, ERP cloud technology easily connect to
other cloud applications, such as sales tax calculations in sales order processing.
Here we can see the current situation of market:
 For example, in the COVID-19 pandemic, supply chains have been stressed,
particularly with international customers and suppliers, small warehouses,
consignment inventory, and escalating freight costs. One database with built-in
analytics and AI can provide the speed, insights, and automation to reduce costs and
improve inventory velocity.

 Below are some scenarios driving the adoption of the ERP technology trends:
 CEO initiatives can impact many parts of the company, and information systems’
speed, accuracy, alerts, and intelligence can contribute to them – particularly when
replacing legacy systems.
 The CFO needs accounting, cost, budgeting, tax, and cash management processes
to run accurately and quickly. For example, financial closings may benefit from a
single, fast database with artificial intelligence to streamline transaction postings.
 CIOs led technology efforts across the company, and they benefit from cloud,
mobile, integration, in-memory processing, and other capabilities to improve
productivity and responsiveness.
 Sales and service starts with marketing, e-commerce, pricing, and sales,
continuing through order fulfilment and customer and field service. Given the
importance of customer retention and the role of technology in many industries,
these business processes are top candidates for new IT.
 Operations are a large part of many businesses, including distribution, supply
chain, supplier management, purchasing, and manufacturing. A multi-site, modern
ERP system will include many new technologies, such as cloud, mobile,
dashboards, and KPIs.

In today’s economy Data is considered as the new fuel and if we look the business in that
prospective then we can analyse why SAP is the future of modern technology with regards to
HANA. Big data and data analytics have brought significant transformation to
traditional analysis today.

Here are the technology trends for big data and data analytics that will
dominate the future.
They are as follows:

1. Data as a Service (DaaS):

DaaS, a cloud-based technology, enables the customers to access digital
files with the internet’s help. According to a recent report, up to 90% of
large companies will generate revenue from DaaS in 2020.  Besides, it will
also help large organizations to use potential data through extreme
collaboration and sharing. 
2. Cloud-based Data Analytics:
With the use of cloud technology in the corporate world, you can benefit
from real-time data analysis. It will give you a better understanding of the
stored data. It will play a vital role in Big Data, Analytics, and even ML.  

3. The Merger of IoT:

IoT devices have created a rage around the world. Looking at the current
growth in IoT technology, we will have more than 38 billion devices
connected by 2020. It will help you to fetch data for analysis, increasing
the scope and value of data analytics.  All businesses will rely on IoT
devices to perform daily operations using Big data analytics. It will not
only provide relevant data but also offer transparency. 

4. Data Security and Privacy:

Despite some new technologies, data manipulation happens. It leads to data
security and privacy concerns. So, all the organizations will prioritize data
backups and their validation in 2020. You can expect 30% of large
enterprises to use backups and snapshots for safety, privacy, and data
reliability. 

5. The Push of Machine Learning:

Machine Learning (ML) will play a vital role in data science tasks. It will
bring the power of automation to data analytics and automate 40% of all
data science-related functions by 2020. It can fetch the insights that even
the skilled data analysts can’t manually. Plus, it will make the process
faster and more accurate. It will boost the overall efficiency, productivity,
and reaction time for particular events.

6. Smarter AI:
By 2024, 75% of enterprises will shift from piloting to operationalizing AI.
It will increase the data streaming and analytics by 5x. Even in the
pandemic, AI techniques like ML, Optimization, and NLP give vital
insights and predictions about the virus spread. Techniques like
Reinforcement Learning and Distributed Learning are creating more
adaptable and flexible systems for businesses. A smarter AI will help in
better decision-making and enhance human-machine trust. 

7. Blockchain Technology:
It will provide full lineage of assets and transactions, plus transparency for
complex networks of participants. The DBMSs will give a more attractive
option for single-enterprise auditing of data sources. As per the current
research, ledger DBMS products will replace the most permissioned
blockchain uses by 2021.
SAP AS A LEADER:

SAP was recognized as a leader in The Forrester Wave: Data Management for Analytics
based on its scores in the current offering, strategy and market presence categories. The SAP
Data Warehouse portfolio offers enterprises with a variety of data warehouse solutions that
can be deployed in cloud, on-premises and hybrid environments, pre-built business content,
integration support for all data types, and much more.

Learn why SAP has been acknowledged as a leader and discover SAP’s data
management for analytics offerings:

1. Digital Supply chain

o SAP Integrated Business Planning helps companies respond to new market
expectations with real-time supply chain capability, anchoring digital
transformation and enabling the intelligent enterprise. Supply chain planning is
evolving from siloed, sequential and manual processes into a driver of pivotal
business planning decisions with greater visibility.

o With SAP Integrated Business Planning, companies can:

 Simplify and automate the planning process across the end-to-end supply
chain.
 Accelerate the timing and improve the accuracy of planning decisions.
 Enhance how strategic business opportunities and risks are evaluated and
addressed.
 “The business planning process is now automated, proactive and prescriptive,
allowing companies to make smarter and more strategic decisions. SAP’s supply
chain management portfolio and its customer base have been recognized by several
recent analyst firms around warehouse management and transportation management.

2. SAP Ariba:
o Sap Ariba is a platform provider for both buyer and seller. It plays an
intermediator between both with the cloud-based technology in real time. Ariba
provides the platform for procurement to its registered buyer and seller. It has
35000 registered sellers on the data base. Which is a very modern technology for
B2B corporate world. The process we can describe is simple to understand and it
is easy for even new registered clients. Through which half of the procurement
process done.

o Example: - if the requirement is listed in Ariba it automatically shows the

sources companies which are already listed and from were that particular
requirement can be Procured. After determining the sources, we can get the
quotation on it and as it provides the feature of interactions so we can have the
negotiation of price on the same platform. So, it has a feature less time consuming
and cost effective which may boost the B2B segment in their functioning process
in upcoming future.

3. Customer Relationship Management:

Expertly manage your marketing, sales, and service processes – and drive customer
engagement – with SAP Business by Design.
 Marketing: Use personalized customer information for more-effective
campaigns, lead generation and qualification, and sales team handovers.
 Sales: Gain complete sales force automation and improve account
management, from contact interactions to invoicing.
 Service: Equip employees with the tools and insights they need to deliver
superior service and boost customer satisfaction.

4. Human Resources:
Streamline HR processes, such as organization management, workforce
administration, time and attendance, and employee self-service.
 Onboarding: Simplify employee onboarding and give employees and
managers easy access to all relevant information.
 Time, attendance, and labour management: Manage time, labour, and
compensation more effectively with centralized data and self-service
processes.
 HR self-services: Empower employees to self-manage time sheets,
procurement processes, and personal information.
 Payroll: Facilitate payroll processing and take advantage of interfaces for
third-party payroll providers.
 
Requests and approvals: Create and monitor policy-compliant purchase
requests and automated approvals.
SAP LEONARDO:

SAP Leonardo is the Future of modern technology: It is a digital innovation framework,

an umbrella term that enables clients to get to SAP's parts and items crosswise over rising
advancements, for example, Machine Learning, Big Data, Internet of Things (IoT) and
Blockchain. Intelligent Technologies from SAP is more than we think, and our immediate
challenge is to explore and understand the scope of what it can do for our business.

INTELLIGENT TECHNOLOGIES FROM SAP:

1. THE FUTURE OF MODERN TECHNOLOGY:
Intelligent Technologies from SAP is a digital innovation system, an umbrella term that helps
customers access SAP’s components and products across emerging technologies, such as
Machine Learning, Big Data, Internet of Things (IoT) and Blockchain. It is often associated
with SAP Cloud Platform services but it’s not limited to this, as it covers anything that fits
into modern technologies and includes e.g., predictive capabilities in S/4HANA – whether on
premise or in the cloud.

2. IT’S NOT JUST TECHNOLOGY – IT’S DESIGN THINKING:

But Intelligent Technologies from SAP is not just about technology; it is focused on design
thinking and about packaging technologies and defining methodologies to address business
challenges. Design thinking is a methodology that focuses around creative ideas and solutions
to resolve use cases. The premise is that customers don’t just need good technology; they
need an approach to find out the value of how and what the technology can do for them.

3. A LEADING BRAND IN THE MARKET:

SAP is not alone in their design thinking methodologies. It is a crowded market place with
the likes of IBM, Microsoft and leading research universities such as Stanford offering their
own innovations. The catch though is that their products often operate in silo – and this is
where SAP comes in. The challenge for SAP is that companies do not often think of SAP as a
vendor for Blockchain, IoT and so on – when you think of SAP you mainly think of ERPs.
But the strength of SAP’s brand lies in integration across the SAP portfolio.
So, if you already have SAP ERP, S/4HANA or other SAP solutions, then Intelligent
Technologies from SAP has the capability and is designed to be integrated.

4. AN INTEGRATED APPROACH WITH EMERGING TECHNOLOGIES:

One of the key benefits of Intelligent Technologies from SAP is that it allows you to integrate
multiple SAP products with emerging technologies. For example, in the SAP Cloud Platform
you can create Fiori apps that use IoT services. When integrated into your business processes
as an end user you won’t necessarily know there is Machine Learning behind the scenes and
you won’t see anything different but you will experience automatic decision-making or
recommendations.

5. THE GROWTH IS MACHINE LEARNING:

SAP provides Machine Learning technology models at different levels which you yourself
can train on without too much expertise. These standard models would currently cover
around 80% of your needs. It’s possible to train your own models but you’ll need deeper
expertise and you’ll probably need the services of a data scientist – in other words you need
to know what you’re doing.

6. EMBRACING INTERNET OF THINGS:

Intelligent Technologies from SAP is bringing new technologies and services together to help
businesses power their digital transformation. In supply chain and logistics, for example, IoT
processes across S/4HANA, ECC and Hybris permit you to monitor goods as well as assets
in-transit and survey the lifecycle of mass-market products, maximizing the value of your
fleet and IoT-enabled business assets.
IoT enabled processes in SAP solutions enable you to maximize the value of products,
including raw materials, semi-finished or finished products, combine real-time sensor data
with business data from SAP and non-SAP systems and provide insight into areas such as
product inventory and replenishment, product consumption and utilization and consumer
interactions.

7. SOLVING TODAY’S CHALLENGES FOR A BRIGHTER FUTURE:

The future is exciting, integration is the way forward and Leonardo and S/4HANA is where
SAP is heavily focusing its R&D investment. At SOA People we’re here to help business
people understand how emerging technologies can help solve their business challenges and
enable them on their digital transformation journey. Our expert consultants are experienced in
Intelligent Technologies from SAP and can demonstrate how the power of SAP can help you
to execute your business strategy. Whether that’s through a workshop, consultation or over
the phone, contact us to see how you can accelerate your business with Intelligent
Technologies from SAP.
Q2. What is S/4 HANA and how is it different from On-premise ERP.
Ans.:

 SAP S/4HANA is an ERP business suite based on the SAP HANA in-memory

database that allows companies to perform transactions and analyses business data in
real-time. SAP released S/4HANA in February 2015 to much fanfare, and the
company now views it as one of its flagship products that customers will migrate to as
the next-generation successor to the SAP Business Suite ERP platform.

 S/4HANA is intended to be easier to use and administer while helping to solve more
complex problems and handle vastly larger amounts of data than its predecessors. It is
available in on-premises, cloud and hybrid deployment models with SAP strongly
pushing its customers toward the cloud option.

 SAP S/4HANA is short for SAP Business Suite 4 SAP HANA, meaning that it is the
fourth version of SAP Business Suite, but is designed to run only on SAP HANA.
S/4HANA originated in SAP HANA, the in-memory database released in 2011. SAP
HANA made it possible to process large volumes of operational and transactional
business data in real time.

 In 2013, SAP launched SAP Business Suite on HANA, a HANA-based ERP system
that included modules for CRM, SRM, PLM and SCM. Suite on HANA was
essentially the SAP ERP business applications' front end running on the HANA in-
memory database back end. S/4HANA was written in HANA rather than running on
top of it.
  SAP S/4HANA required rethinking the database concept and rewriting 400 million
lines of code. According to SAP, the changes make the ERP system simpler to
understand and use and more agile for developers.

 Also, because S/4HANA does not require batch processing, businesses can simplify
their processes and drive them in real time. This means that business users can get
insight on data from anywhere in real time for planning, execution, prediction and
simulation, according to SAP.

S/4HANA and SAP Fiori UX

One of the keys to S/4HANA is that it uses the SAP Fiori UI rather than the traditional SAP
GUI.
 SAP Fiori is a collection of commonly used S/4HANA functions that are displayed in
a simple, consumer-ready tile design and that can be accessed across various devices,
including desktops, tablets and mobile devices.

S/4HANA
1. MODULES:
o One key component of S/4HANA is SAP Finance -- formerly Simple Finance
-- which aims to streamline financial processes and enable real-time analysis
of financial data. SAP Finance helps companies align their financial and non-
financial data into what SAP refers to as a single source of truth. Some
Business Suite users are deploying SAP Finance as the first step on the road to
S/4HANA.

o SAP has added more modules and functionality to subsequent releases,

such as:
 S/4HANA 1511 -- released November 2015 -- which introduced a
logistics module called Materials Management and Operations
(MMO).
 S/4HANA 1610 -- released in October 2016 -- which included
modules for supply chain management, including Advanced Available-
to-Promise (AATP); Inventory Management (IM); Material
Requirements Planning (MRP); Extended Warehouse Management
(EWM); and Environment, Health and Safety (EHS).

o SAP announced S/4HANA HCM, an on-premises human capital management

(HCM) application alternative to SAP SuccessFactors, the company's SaaS
HCM application. SAP describes S/4HANA HCM as a sidecar application that
runs alongside or is integrated with S/4HANA, but is not an included module.
S/4HANA HCM will be available in 2023 and will be supported through at
least 2030, according to SAP.
 2. CLOUD:
o In March 2017, SAP released S/4HANA Cloud, a cloud-based version of
S/4HANA. S/4HANA Cloud is best suited for organizations of 1,500
employees or more that may want to run a two-tiered ERP system, in which a
corporate entity runs a full business suite -- such as SAP ERP Central
Component or S/4HANA – on-premises and implements S/4HANA Cloud at
the division or subsidiary level.
o S/4 HANA Cloud includes next-generation technology like machine
learning through a tool called SAP Clea, and a conversational digital assistant
bot called CoPilot. S/4HANA Cloud is a SaaS application with new editions
released every quarter -- the naming conventions follow the on-premises
model of year and month of release, so SAP S/4HANA Cloud 1709 was
released in September 2017.

o SAP S/4HANA is the next-generation business suite designed to Run Simple

in a digital economy. Built for the revolutionary SAP S/4 HANA in-memory
computing platform, it fundamentally redefines how enterprise software
creates value across industries with instant insight. SAP S/4HANA also
personalizes the user experience on any device and natively connects to Big
Data, the Internet of Things, and business and social networks – all in real
time.

KEY FEATURES OF S/4 HANA: -

1. Simple data modelling
o Data modelling related to SAP S/4 HANA for Group Reporting is as any other
consolidation solution, based on required fields, dimensions (DIM),
consolidation unit (CU), chart of accounts (CoA) etc. The addition of
additional dimensions or reporting items within this new solution is as easy as
indicated in the picture to the right (no extra modelling or mapping to add
additional dimensions required).

o You just mark a check box and additional reporting requirements are added to
your data model and become master data. This is all done real-time and
without any data replication. So, from a master data management perspective a
 major advantage compared to other CPM vendors. But then again, keep in
mind that this major advantage is only available for those companies that have
implemented a SAP S/4 HANA for all finance related transactions (ERP).
2. Live data collection:
Data collection can be done by selecting the desired upload method; in this case
reading from the Universal document. The Universal document integration allows for
local currency of consolidation unit to be populated from any currency field in
Universal Journal (i.e., Functional Currency).

 
3. Live, Extensible master data:
SAP S/4 HANA core accounting master data is real-time available (can be shared
(without replication)) and can be extended with master data that is only relevant for
consolidation. In other words, consolidation master data can be easily combined with
accounting master data. See screenshot below.

4. Easy set-up of validations:

When setting-up the validation rules (in the general information tab) you have one,
clear view (see screenshot below) for all necessary parameters. For each validation
rule an id is created, a name for the validation rule can be given, a tolerance can be
precisely set and a control level (e.g., error, warning or information) can be set. You
 can also enforce a textual comment for each validation rule and it is also possible to
visualize the formula that a validation rule uses for the left and right side.

5. Consolidated reporting:
Analysis for Office (AFO) is the reporting solution for the creation of consolidated
reports like balance sheets, P&L or Cash Flow Statement. It will be the main
facilitator for reporting packs at local and consolidated level. SAP Analytics Cloud is
the reporting solution for visualization of any consolidated or non-consolidated
financial information. The use of a live data connection ensures that analysis and
process steps can be facilitated by looking at real time data. When the Digital
Boardroom is also used, then management can have interactive discussions using
commenting and presentation decks looking at live data at any level and granularity.

SAP ERP On-premise and SAP S/4HANA Cloud both have their pros and cons. The On-
premise version gives you maximum control over the data as everything is saved and
maintained on the local servers of your organization. However, if you’ve space issues in your
servers, then you can go for the S/4HANA Cloud version, which also delivers fast-paced
operations when you have timing constraints in your on-going projects.
The main difference between On-premise and SAP S/4HANA Cloud is that SAP S/4HANA
Cloud edition is Software as a Service (SaaS), which is hosted on SAP’s servers and is
entirely maintained by SAP. Unlike On-premise edition, software upgrades happen
automatically every quarter in the Cloud version.

After checking the key differences, let us now have a glance at the table below. This
tabular data will elaborate on the difference between On-premise and Cloud.

CHARACTERISTIC SAP ERP ON-PREMISE SAP S/4HANA CLOUD

S
Licensing method Traditional licensing. Subscription licensing.

Infrastructure & Deployment and maintenance System infrastructure and

maintenance are incorporated and managed maintenance are totally under
by the customer who purchases SAP’s control once the
the licensing of On-premise customer takes subscription of
edition. the SAP S/4HANA Cloud
edition.
Scope to The On-premise edition is The Cloud edition is
customization highly compliant with predefined for best-practice
individual business and configured with limited
requirements and specialization.
customization.
Functional scope On-premise edition supports Cloud edition supports critical
full ERP Scope. Also, industrial scenarios and ERP
integration with SAP Hybris scenarios. In the Cloud edition,
Marketing, SAP JAM, and one can integrate with SAP
SAP Ariba Network is possible SuccessFactors Employee
in SAP S/4HANA On-premise Central, SAP Fieldglass, SAP
edition. Hybris Marketing, SAP JAM,
and SAP Ariba Networks.
Innovation in In the On-premise version, In the Cloud version, the
software planning, testing, controlling, automatic latest innovation
upgrading and changing within upgrades are incorporated
the system are the full quarterly by SAP.
responsibilities of a customer.
Now, let’s move to the last question where we’ll see how the choice you made amongst SAP
ERP On-premise edition and SAP S/4HANA Cloud edition can affect your organization.

o The SAP ERP On-premise edition avails the full spectrum and functionality of this
suite along with the highly flexible customization. This edition works best for large
organizations that have very well-established complex business processes that need
simplification. Unlike Cloud edition, the On-premise edition provides more
opportunities for effective monitoring of business processes in large organizations. 

o SAP S/4HANA Cloud edition offers higher quality performance, faster upgrade
cycles (quarterly, unlike annually for on-premise version) at the cost of greater agility
and lower flexibility in customization. The mid-sized companies which are looking
for management of rapid business development processes can opt for the Cloud
edition.

In a nutshell, every organization must spend some quality time in designing a road-map and
take into consideration the difference between On-premise and Cloud edition for SAP
S/4HANA. Integrating the appropriate ERP solution is essential to succeed in your business
and achieve planned goals.
Q3. Globalization has left many manufacturing and service-oriented companies with the
option of pursuing world’s best practices. How is the ERP software solutions position in
this environment? Explain.
Ans.:
 ERP is an acronym that stands for enterprise resource planning (ERP). It’s a business
process management software that manages and integrates a company’s financials,
supply chain, operations, reporting, manufacturing, and human resource activities.
Most companies have some form of finance and operational system in place but most
of the software that’s out there can’t go beyond everyday business processes or help
with future business growth.

 In the past, businesses had some sort of accounting, finance, or HR process but the
software systems they had often worked separately and didn’t talk or work with one
another. What makes modern ERP software different is that it brings all these
different processes to the table to collaborate and create one fluid system. Current
solutions also allow each department to see what the other is doing. The result is that
accounting and HR can easily collaborate with sales and customer relationships.

 The term “ERP” or “Enterprise Resource Planning” was originally coined by industry
analyst, The Gartner Group, in the 1990s. It evolved from MRP, a term that was
already well-known in business at that time. MRP stands for both Material
Requirements Planning (MRP) and Manufacturing Resource Planning (MRPII).
These systems were created back in the 1960s when manufacturing-based companies
were looking for ways to improve efficiency and decision-making for production line
managers.

 In the 1990s, The Gartner Group and other businesses sought to apply MRP systems
to other business types, and desired to expand capabilities and processes to other areas
within an organization, and thus ERP as we know it today was born. In its early days
of existence, ERP focused on organizing data and streamlining processes that related
to back-office areas, such as inventory management, fulfilment, purchasing, human
resources, accounting, IT, manufacturing, planning and scheduling, and other related
areas.

 With the introduction and widespread use of the Internet, ERP was expanded further
to include other areas of a business, such as customer relationship management
(CRM), supplier relationship management (SRM) and supply chain management
(SCM), human capital management (HCM), business intelligence and ecommerce.
 Today, ERP systems integrate into all areas and functions within an organization, with
the primary purpose being to help leaders and managers better understand all moving
parts of their operations, identify opportunities, and make more informed decisions
that will ultimately have an impact on the future success and viability of their
businesses.
 Despite the use of the word enterprise in the name, ERP systems are used by
businesses of all sizes, large and small. There are two primary types of ERP systems
being implemented at organizations today, On-Premises and Cloud-Based. The
differences between the two will be explained in another section in this resource.

 Enterprise resource planning (ERP) is a software that enables organizations to manage

and automate their business processes. The capabilities of the ERP system have
evolved from back office activities to the integration of business processes. ERP
software has been widely used for back office operations, which include order
management, inventory control production, and accounting, etc.

 An ERP software system comprises several software modules and each ERP model is
focused on a particular departmental area such as inventory control, material
purchasing, finance, marketing, HR, and accounting. These modules can be
customized according to the requirement of the organization. An ERP software
system can be deployed either as a cloud based or on-premise software. Integration of
organizational activities and managing resources efficiently are some of the major
tasks of the ERP system.

 The ability to access the central system from any demographic due to integrated
system architecture of the ERP system module, is compelling enterprises to adopt
these systems. It is responsible for enhancing productivity by enabling organizations
get potential return on investment by reducing their expenses. This software enables
organizations to integrate large amounts of data and reconcile the shipments of
companies faster. However, some of the factors restraining the market growth are
high installation cost and the accessibility of open-source applications.

 The ERP software market has been segmented based on deployment, functions,
industry, end-user, and region. Based on deployment, the ERP software market is
segmented into cloud based and on-premise deployment models. The cloud-based
deployment model segment is estimated to hold the major share of the global ERP
software market. This is attributed to the rise in adoption of cloud-based technologies
coupled with rising scalability offered by these technologies.

 Rising necessity for real-time data analytics is a prominent factor propelling the ERP
software market. The function segment includes human resource (HR), supply chain,
finance, and others. The industry segment includes key industries such as BFSI,
manufacturing, healthcare, government utilities, retail, telecom, aerospace and
 defence and others. The end-user segment in the ERP software market includes large,
small and medium enterprises. Large enterprises are estimated to have major share in
the global ERP software market, due to their rising investments, whereas extensive
adoption of ERP systems by mid and small sized enterprises are further supporting the
growth of the SME’s in the market.
 Region wise, the global ERP software market is segmented into North America, South
America, Europe, Asia Pacific (APAC), and Middle East & Africa (MEA). Presently,
North America is estimated to dominate the market in terms of its revenue
contribution share followed by Europe. However, among all the regions, APAC is
expected to create significant market opportunity for key players operating in the
market due to growth in industrialization in this region during the forecast period.

 Key players in the market are prominently focusing on introduction of advanced

services and solutions in order to strengthen their position and improve their
offerings. Key vendors operating in the global ERP software market include Oracle,
TOTVS S.A, Microsoft Corporation, SAP SE, Infor, IBM Corporation, Netsuite Inc.,
SYSPRO, Unit4, Sage Group Plc, QAD, Focus Softnet, and Ultimate Software. ERP
software vendors are updating the pricing models to strengthen their position in the
market.

Importance of ERP in the business: -

While there’s no all-up solution software for every business process, ERP technology is
getting better and better at bringing all your business processes together to improve
collaboration, help your company make data-driven decisions, and advance business
productivity.

ERP can cover a lot of company functions, but some of the main business processes
include:
1. Finances:
Modern ERP offers dashboards that give you an overview of your finances, so you
can tap into the real-time information anytime and anywhere. It should also help you
cut down on entering information manually by automating daily tasks and include
tracking abilities that help with your business’s regulatory compliance.

2. Human resources:
Modern solutions offer ways to manage company data and streamline employee
management tasks like payroll, hiring, and other duties. You could also track
employee performance and identify HR problems before they happen.

3. Manufacturing:
This function improves business communication, automates daily processes, and
offers manufacturers the ability to fulfil customer needs and manage resources by
accessing real-time data. This solution also optimises project and cost management as
well as production planning.
 4. Supply chain:
If your company is still entering information by hand and trying to track down stock
in your warehouse, you can easily save time and money by automating these
processes with ERP. Modern solutions also offer dashboards and business intelligence
to help you get a handle on your stock management.

Q4. ERP seems to be a good idea, so why is return on investment so low? What are the
risks in implementation of ERP System?
Ans.:
Measuring the Performance and ROI of ERP:
Measuring the performance of your ERP system is an important part of being able to validate
the investment you made or continue to make over time. When implementing an ERP system
at your organization, set specific goals and KPIs that you can work against once the new
system is in place.

How you measure performance will depend on the nature of your business, but here are
some general questions you should consider when setting your KPIs:
o Will this system make my employee more productive? By how much?
o Will this system make my employees and myself happier?
o How will this new system impact customer satisfaction? Can I predict a
measurable impact and set a specific goal?
o Will this allow us to increase sales, repeat sales, conversion rates, customer
retention rates, etc.? By how much?
o Will this new system give us a strategic advantage over competitors? How?
o Will this improve relationships and processes with global vendors? How can I
track it and what are my goals?
o Will this system improve supply chain and inventory activities? What are the main
metrics we’re tracking now, and how will they improve after the system is in
place?

Think about the metrics and goals you’re currently tracking against at your organization, then
make predictions and set KPIs to track success and progress over time once your new ERP
system is in place.

When Business firms Needs ERP, this is the big question mark for any company
management.
Every business is unique and faces different challenges at different times, so the question is,
how do you decide if and when investing in Enterprise Resource Planning is right for your
business?
If you’re able to check off most of the items on this list, it’s probably safe to start evaluating
ERP software providers and working to allocate the resources needed for deployment:
 o Your team members are spending too much time on tasks you know could be
automated and streamlined.
o You don’t have easy access into the data you need to make informed decisions
about your business.
o You work with vendors and third-party applications across the globe.
o You have a lot of different software tools and processes that you’ve adopted and
implemented for your business over the years, but they are not connected to each
other.
o You don’t know what your inventory levels really look like on a daily basis.
o You’re personally spending too much time searching for information, trying to
boost productivity and efficiencies, and integrating new tools that are needed in
order to scale. Your teams can’t easily collaborate or share information with each
other.
o You can’t access essential business data and information when you’re off-site.
o You’re having trouble keeping up with changes in regulatory compliance.
o You’re finding or addressing problems after it’s too late; in other words, you’re not
able to be as proactive as you’d like when it comes to identifying problems that
need to be fixed in order to keep your operations running smoothly.

If you can check off at least 60 or 70 percent of the list above, it’s time to start exploring
vendors. In order to justify the investment needed in order to use an ERP system at your
business, use the checklist provided above. List the specific challenges you think your
organization is having, and talk with your decision-maker about how you think an ERP
solution could help.
RISKS IN IMPLEMENTATION OF ERP SYSTEM
Despite all the options out there, some companies are still hesitant about ERP. There could be
many reasons why, but where there’s a fear, there’s a solution.

 Risk: How do I know I’m choosing the right ERP solution for my business?
You don’t have to find the perfect software solution to fix everything. ERP should actually be
able to take the best of the business processes you’re using now and bring them together
under one system, while letting everyone in your organisation view the same information.
This is where your choice of at technology partner is important.

 Risk: We can’t afford a major ERP overhaul.

A solution doesn’t have to be an all or nothing implementation proposition. Software solution
modules can be purchased separately depending on your business needs. This will help your
team ease into the implementation piece of ERP and it’ll save having to invest in a major
software renovation without knowing whether or not the functions you’re adding will pay off.

 Risk: We don’t want to lose the systems we have in place now.

As we mentioned, any ERP solution you choose should work with what you’re using now but
also include features that can help in your future growth. For instance, if the software you
have mostly handles the financial, supply chain, and manufacturing sides of your business,
you may want to look for a solution that brings in a strong business intelligence component.

 Risk: failure to Redesign Business Processes to Fit the Software.

 There is a strong desire to fit the new ERP system to fit to the current process. But this is
hardly the case. In fact, the right thing is to redesign your current processes to fit to purchase
an ERP system. The reality is neither option is easy. It is very difficult in most business to
change old or existing processes and to customize the ERP system to fit to current processes
is a costly and time-consuming venture. In my view this is the biggest ERP implementation
risk

 Risk: Insufficient Training and Reskilling of End-Users.

A number of firms learned that investment in training and reskilling the employees were
higher than expected. Most ERP implementation comes with deadlines that need to meet. As
a result, there is hardly enough time to train most people and give them skills they need to
reach the satisfactory performance state.

 Risk: Lack of Ability to Recruit and Retain Qualified Systems, Developers.

Many of the organizations found it difficult to recruit and retain good ERP specialists because
the market rates for these people are high. The developers of biggest market shares ERP
vendors like SAP, Oracle, Microsoft Dynamics and Infor are in high demand and moves from
one consultancy project to another. So not finding an in-house ERP specialist could be
significant ERP implementation risk.
  Risk: Inability to Obtain Full-Time Commitment of Employee to Project
Management and Project Activities.
Similar to point 2, it might be difficult to get managers and employees to commit to project
management roles because they may be uncertain about what responsibilities will still be
open to them once they are transferred back to their positions. Or, in some cases, there’s no
back up for their day job while busy in implementation and testing causing backlog of work,
up-set customers and compounding stress as a result.

Q5. When implementing ERP, it is important to decide Organisational Structure and

Master Data to run transaction. Explain with example what is organisational Structure,
Master Data and transaction.
Ans.:

An enterprise structure is the structure that represents an enterprise in the SAP ERP system. It

is subdivided into various organizational units which, for legal reasons or business-related
reasons, are grouped together. An enterprise structure defines various levels in
an organization.

The following example illustrates how the structure of a company could be reproduced in
SAP Retail and explains what the various organizational units mean. The fictitious company
has several subsidiaries, which themselves comprise several distribution chains.

1. ORGANIZATION STRUCTURE:
The organizational structure of the company in the example graphic would be
modelled in SAP Retail as follows:

i. Central purchasing:
The highest element in the whole corporate group hierarchy is the client. All
the organizational units in a client are subject to the same control mechanisms.
Data valid across the whole corporate group is stored at client level. In the
example, the central purchasing department of the company is located in the
SAP Retail structure at client level.

ii. Local purchasing:

Local purchasing departments are assigned to central purchasing. Each local
purchasing department is responsible for a different distribution chain. Each
local purchasing department corresponds to a company code or a purchasing
organization in SAP Retail. Specific purchasing activities are assigned to
individual purchasing groups.

iii. Distribution chains:

Local purchasing procures merchandise for different distribution chains
centrally. Distribution chains in SAP Retail are a combination of sales
organization and distribution channel. The sales organizations are assigned to
different company codes.
iv. Distribution centre, Store:
Distribution chains consist of distribution centres (DC) and stores. The generic
term for DCs and stores in SAP Retail. Sites are also managed as customers in
the system.

v. Storage location, Storage section, Department

Sites can also be seen as a combination of one or more locations in close
proximity to each other where stocks of merchandise can be found (examples
are storage locations and storage sections). Stores can also be subdivided into
departments, which in turn can be understood as cost centres. Each department
can be assigned a receiving point.

vi. Customer
 The value chain concludes with the customer or consumer. If the customer is
recorded in the system (and is therefore an identifiable customer), natural
persons can be defined in the customer master as the contact persons at that
customer.

Organizational Structure: Corporate Group

A corporate group is the affiliation of legally independent companies under the common
management of a controlling company. It is the highest of all organizational units in the
hierarchy, and corresponds to a retailing company with several subsidiaries (for example),
which are defined from a Financial Accounting point of view as individual company codes.
Data defined at corporate group level is valid for all purchasing and sales organizations.

Organizational Structure: Company Code 

 A company code is an independent accounting unit that represents an independent
company in the legal sense. It is the central organizational element in Financial
Accounting. Various assignments between a company code and other organizational
units are possible: A purchasing organization can be assigned to a company code. In
this case, the purchasing organization can only order for sites within this company
code.
  A valuation area is the organizational unit subject to inventory management on a
value basis in the SAP system. In SAP Retail, the valuation area must always
correspond to a site. You assign a company code as an attribute to the valuation area
that is already allocated to a site either in the site maintenance or in Customizing.
Each sales organization must be assigned to a company code in Customizing. This
assignment forms the link between Sales and Distribution and Accounts Receivable
Accounting.

Organizational Structure: Site

 A site is a store, a distribution center or a production location. In SAP Retail, the site
is the organizational level at which merchandise replenishment is planned and stocks
are managed. A store is assigned one purchasing organization and one sales
area (sales organization, distribution channel and division) and thereby also
a distribution chain, to which the store belongs and which is used primarily for
intercompany billing purposes.

 The store must be authorized to receive goods from the sales area to which the
supplying distribution centre belongs. If it is to be possible for merchandise to be
transferred from one store to another, then the recipient store must also be authorized
to receive goods from the sales area to which the supplying store belongs. Each
distribution center is assigned a purchasing organization (and, if required, a sales area)
for determining warehouse transfer prices and units of measure.

 A distribution centre can also be assigned to a site (normally to itself) and

a distribution chain (for determining sales prices). These assignments enable
merchandise in the distribution center to be valuated at retail prices. This sort of
valuation is most common in the apparel industry.

2. MASTER DATA
Master data contains the most important information about sites, vendors, and
customers as well as about all articles. Master data also includes information about
pricing and cycle control data and is stored in the system for retrieval when the user
processes business transactions. When master data is consistently maintained, the time
required to process transactions can be drastically reduced because the system can
then automatically default the business transactions in the relevant fields.
 Maintaining master data, for example, for vendors or purchase orders, can be time-
consuming if you have to make each change individually. It is quicker to make one
change and have the system automatically update all the affected records
automatically. The mass maintenance tool enables you to change a large group of
master data records at the same time.
You can select the mass maintenance tool within a number of master data
transactions, for example, the Article Master and Markdown Planning Master. All
mass maintenance tools are based on the same basic framework and user interface.

Example:
 You can replace Vendor X with preferred Vendor Y for all articles in your Health &
Beauty Aids merchandise category.
 In markdown plans, instead of entering quantities by hand, you can use the mass
maintenance tool to determine the quantity of unrestricted stock currently in inventory
for each article and automatically insert this quantity in the markdown plan. If
required, you can then modify this amount.

Features:
You can use the mass maintenance tool to perform the following tasks:
 Define the scope of data in a selection area either by using the standard selection
criteria or by defining your own selection criteria.
 Use the navigation tree to search for entries or to drill down along the object’s
hierarchy, for example, by purchasing organization – vendor – site in info record mass
maintenance.
 Mass update and clear entries within the maintenance grid.
 Apply formulas to fields in the grid.
 Filter records from the maintenance grid.
 Use an integrated error recovery tool that lists errors and allows you to correct them
on the fly.
 View and manage data at the reference site level, for example, vendor/site, purchasing
info record, and logistics/replenishment.
 Check for common errors before saving the data.

Master Data: Site

A site is an organizational unit used to document goods stored in distribution centers and
stores for the purposes of inventory management and to model the associated business
processes, such as goods receipt, physical inventory, and goods issue. The site master
contains information about all sites in your company, that is, all distribution centers and
stores. This information is stored in master records for each individual site. The system uses
the data contained in a site’s master record to propose data values for a wide variety of
business processes.

Master Data: Business Partner

Business partners are legal or natural persons with whom you have a business relationship.
You enter data on business partners in master records. Master records contain all data, known
as master data, necessary for processing business transactions You can find general
information about business partners and business partner master data in the section. In this
Retail section, you can find additional information about business partners who are customers
and vendors, and information about the use of business partner master data in SAP Retail.