Chapter 2 - Introduction to Enterprise Systems

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1. Architecture The architecture of an enterprise system refers to the

technical structure of the software, the ways that users
interact with the software, and the ways the software is
physically managed on computer hardware.

2. Presentation lay- How you interact with the application (using menus, typing,
er and selecting)

3. Application layer What the application allows you to do (create formulas or

charts, compose an essay)

4. Data layer Where the application stores your work (on your hard drive
or flash drive)

5. Three-tier The three-tier client-server architecture separates these

client-server layers (presentation layer, application layer, and data lay-
architecture er) into three separate systems

6. Service-oriented The technical capabilities that allow systems to connect

architecture, or with one another through standardized interfaces called
SOA Web services.

7. *Enterprise re- Enterprise resource planning (ERP) systems are the

source planning world's largest and most complex ES. ERP systems focus
(ERP)* primarily on intra-company processes— that is, the op-
erations that are performed within an organization—and
they integrate functional and cross-functional business
processes. Typical ERP systems support Operations (Pro-
duction), Human Resources, Finance & Accounting, Sales
& Distribution, and Procurement.

8. *Supply chain SCM is inter-company systems. SCM connects a compa-

management ny to other companies that supply the materials it needs
(SCM)* to make its products. Typical SCM systems help compa-
nies plan for their production requirements and optimize
complex transportation and logistics for materials.

9. *Supplier rela- SRM is inter-company systems. SRM systems typically

tionship manage- manage the overall relationships with the materials sup-
ment (SRM)*
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pliers. SRM systems contain functionality to manage the
quotation and contracts processes.

10. *Customer rela- Customer relationship management (CRM) systems con-

tionship manage- nect a company's ERP system to those of its customers.
ment (CRM)* CRM systems provide companies with capabilities to man-
age marketing, sales, and customer service. These sys-
tems are an extension of the fulfillment process of ERP
systems.

11. *Product lifecy- Product lifecycle management (PLM) systems help com-
cle management panies administer the processes of research, design, and
(PLM)* product management. In effect, PLM systems help com-
panies take new product ideas from the virtual drawing
board all the way to the manufacturing facility.

12. *Application The collection of these inter-company systems and the

suite* underlying intra-company ERP system is called an appli-
cation suite.

13. Application plat- Another critical component of ES is application platforms.

forms Much like the role of the operating system for your person-
al computer, application platforms serve as a type of "en-
terprise operating system" for a company's ES landscape
by allowing all of the various systems to communicate
seamlessly with one another as well as with systems
outside the company

14. *Organizational Organizational data are used to represent the structure of

data* an enterprise

15. *Client* A client is the highest organizational level in SAP ERP. It

represents an enterprise consisting of many companies or
subsidiaries.

16. *Company code* Each company within the enterprise is represented by a

company code. Each company code represents a sepa-
rate legal entity, and it is the central organizational ele-
ment in financial accounting. That is, financial statements
required for legal reporting purposes are maintained at the
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company code level. A client can have multiple company
codes, but a company code must belong to only one client.

17. *Plant* A plant is an organizational element that performs mul-

tiple functions and is relevant to several processes. It is
essentially a facility in which the following functions are
performed:
• Products and services are created.
• Materials are stored and used for distribution.
• Production planning is carried out.
• Service or maintenance is performed.

18. *Master data* Master data represent entities associated with various
processes.

19. Material types Materials are categorized into different material types
based on the way they are used in the firm's operations.
Each material type has different characteristics and is
used for different purposes and in different ways. The
material type determines which business processes are
permitted to use the material.

20. *Raw materials Raw materials (ROH) are purchased from an external
(ROH)* source—a vendor—and used in the production process.
Typically, raw materials are not sold to end-customers.
Consequently, the material master will contain data relat-
ed to procurement and production but not fulfillment.

21. *Semi-finished Semifinished goods (HALB) are typically produced

goods (HALB)* in-house from other materials (e.g., raw materials) and are
used in the production of a fi nished good. Consequently,
data related to production must be maintained for semifi
nished goods.

22. *Finished goods Finished goods (FERT) are created by the production
(FERT)* process from other materials, such as raw materials and
semifinished goods. They are generally not purchased.
As a result, the material master for finished goods will
include data related to production and fulfillment, but not
procurement.
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23. *Trading goods Trading goods (HAWA), like raw materials, are purchased
(HAWA)* from a vendor. Unlike raw materials, however, trading
goods are resold to customers. Significantly, the company
does not perform any additional processing of the mate-
rial prior to reselling it. Therefore, the material master for
trading goods will include data related to purchasing and
selling but not production.

24. Material group Related to material type is the concept of a material group,
which includes materials with similar characteristics.

25. *Transaction Transaction data reflect the consequences of executing

data* process steps, or transactions.

26. *Transaction SAP ERP uses several different types of documents to

documents* record transaction data. Some of these documents are
created or utilized as the process is being executed; others
record data after the process steps are completed. We
refer to the first category as transaction documents.

27. Financial ac- Documents that record data generated after the process
counting [FI] steps have been completed.These three documents are
documents; "virtual" documents in that they reside in the enterprise
Management ac- system and are printed only occasionally as needed.
counting or con- FI and CO documents record the financial impact of
trolling [CO] doc- process steps.
uments; Material documents record materials movements, such as
Material docu- when materials are received from a vendor or shipped to
ments a customer

28. Reporting Reporting is a general term used to describe the ways

that users can view and analyze both transaction and
historical data to help them make decisions and complete
their tasks.

29. *Online transac- The transactional environment of SAP ERP is an on-

tion processing line transaction processing (OLTP) system, which, as the
(OLTP)* name suggests, is designed to capture and store detailed
transaction data. The primary function of OLTP is to exe-
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cute process steps quickly and efficiently; it is optimized
for this purpose. OLTP is not used to generate sophis-
ticated reports because it lacks the computing power to
parse through and analyze the vast stores of data that
most companies accumulate. Consequently, businesses
employ OLTP to generate only simple lists and reports.

30. *Online analyt- For detailed data analysis, SAP ERP includes an online
ic processing analytic processing (OLAP) environment in the form of
(OLAP)* information systems. Instead of using detailed transaction
data, these systems use information structures to provide
analytic capabilities.

31. Information Information structures capture and store specified trans-

structures action data in an aggregated and summarized form that
enables users to analyze the data as needed. Each infor-
mation structure in the OLAP environment is defined in
terms of three features: characteristics, key figures, and
period definition

32. Characteristics Characteristics are the objects for which data are collect-
ed. These objects are typically organizational data such
as plant and sales organization and master data such as
materials, vendors, and customers. An information struc-
ture can include up to nine characteristics.

33. Key figures Key figures are performance measures, such as quantities
and counts that are associated with the characteristics.

34. Period definition Data are collected or aggregated for specified time peri-
ods, such as daily, weekly, and monthly, which are speci-
fied in the period definition

35. Work lists Work lists identify tasks that are scheduled to be complet-
ed in a process.

36. Online lists Online lists display lists of master data—such as mate-
rials, vendors, and purchasing info records—and docu-
ments—such as transaction documents, FI, CO, and ma-
terial documents—that are generated during the execution
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of a
process.

37. Standard infor- Standard information structures are predefined in the SAP
mation struc- ERP system, and they collect the data needed to generate
tures the most commonly used reports.

38. User-defined in- SAP ERP also enables users to define their own struc-
formation struc- tures, known as user-defined information structures, to
tures meet specific reporting requirements

39. *Standard analy- Standard analysis provides predefined analytics for data
sis* in standard information structures. This type of analysis is
sufficient for most analytic requirements. When standard
analysis is insufficient, users can conduct flexible analysis
to customize the reporting.

40. *Flexible analy- Flexible analysis allows users to define the content and
sis* format of the analysis. Specifically, it enables users to
combine available characteristics and key figures as need-
ed and to create new key figures using user-specified
formulas. It also provides users with several layout options

41. Business intelli- Business intelligence is a general term that refers to the
gence overall capabilities a company uses to collect and analyze
data from a variety of sources to better understand its
operations and make better managerial decisions.

42. *Material Docu- Records data related to a goods movement, such as the
ment* receipt of goods from a vendor

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