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SAP Course: What Is Enterprise Resource Planning (ERP)

This document provides an overview of enterprise resource planning (ERP) systems and SAP ERP. It defines ERP as a centralized system for planning and managing business resources across departments. Key points made include: - ERP systems integrate business processes and standardize systems to provide consolidated reporting and better resource utilization. - SAP is one of the leading ERP software providers, collecting data from all business functions into a central database for analysis and planning. - SAP ERP modules correspond to core business functions like finance, human resources, manufacturing, and sales. - ERP allows for improved control, real-time information sharing, and more efficient use of resources across an organization.

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99 views

SAP Course: What Is Enterprise Resource Planning (ERP)

This document provides an overview of enterprise resource planning (ERP) systems and SAP ERP. It defines ERP as a centralized system for planning and managing business resources across departments. Key points made include: - ERP systems integrate business processes and standardize systems to provide consolidated reporting and better resource utilization. - SAP is one of the leading ERP software providers, collecting data from all business functions into a central database for analysis and planning. - SAP ERP modules correspond to core business functions like finance, human resources, manufacturing, and sales. - ERP allows for improved control, real-time information sharing, and more efficient use of resources across an organization.

Uploaded by

Ashar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SAP Course

What is Enterprise Resource Planning (ERP)


Chapter 1
Typical Business Process
Key observations
• A typical enterprise has many departments / Business units
(BU)

• These departments/BU continuously communicate and


exchange data with each other

• The success of any organization lie’s in effective


communication and data exchange within the departments/BU
as well as associated third party such as vendors, outsourcers
and customers.
Types of enterprise systems
Enterprise Software systems can be classified into two types:

• Decentralized systems
• Centralized systems also called ERP
Decentralized System
In a company with Decentralized System of Data Management,
there are two major problems:

• Data is maintained locally at the individual departments


• Departments do not have access to information or data of
other departments
Problems with Decentralized system

• Numerous disparate information systems are generated


individually over time which are difficult to maintain
• Integrating the data is time and money consuming
• Inconsistencies and duplication of data
• Lack of timely information leads to customer dissatisfaction ,
loss of revenue and reputation
• High Inventory, material, and human resource cost.
Solution
?????
Centralized System
ERP
Centralized System
In a company with centralized System of Data Management:

• Data is maintained at a central location and is shared with


various Departments
• Departments have access to information or data of other
Departments
Increased Revenue, no data duplication & happy customers
Benefits of Centralized System

• It Eliminates the duplication, discontinuity and redundancy in


data
• Provides information across departments in real time
• Provides control over various business processes
• Increases productivity, better inventory management ,
promotes quality , reduced material cost, effective human
resources management, reduced overheads boosts profits
• Better customer interaction and increased throughput. It also
improves customer service.
ERP
Hence, a centralized enterprise management system is
required.

SAP is a centralized enterprise management system also known


as Enterprise Resource Planning.
Why Enterprise Resource Planning?
• Why do we need ERP?
Integration of Business Processes: ERP allows all business processes to
be integrated
Standardization of Systems across locations: No matter how many
locations there are, ERP will standardize all processes for all locations
Overall control of Organization: ERP gives better control
Better Reporting System: ERP gives consolidated reports and makes
reporting easier
Best utilization of resources: ERP makes the utilization of resources
efficient e.g. resource such as man, material and machines
ERP Products in the Market
• There a few ERP products in the market:
• SAP – Most widely used with 60% market share
• Oracle
• BAAN
• People Soft
• JD Edwards
• Marshall
• Etc…
Corporations Using ERP (SAP)
What is ERP?
• ERP stands for Enterprise Resource Planning
• On a basic level, it means planning resources for a business
• You as an individual also plan your personal resources, just like businesses do
• You have resources such as:
• Cash in hand
• Cash in bank
• Fixed assets
• For all of these resources, you know how much you have and how much you
need, so you plan and manage them
• In the same way, businesses also plan and manage their resources such as
stocks, debtors, sales etc
• They do this with enterprise resource planning software
Example
• You work at a small company and have sales, you use Excel to
record and manage sales

• You start to accumulate debtors and creditors in your business, so


you start to use QuickBooks to record and manage these accounts

• Your business grows and now you have many customers calling, so
you use a customer management program, such as Maximizer

• You hire more staff and you use a payroll software, such as
PayMate
Example
• But businesses cannot just maintain individual records for different
departments

• It is not efficient for businesses to just maintain separate software for each
department

• For example, you may use Excel to record sales and QuickBooks to maintain
debtors but how would you compare this information with each other?

• A business must compare all its departmental information in order to remain


efficient

• As the manager, at the end of the month, you want to view a consolidated
report that has all the information from these programs, how do you do it?
What is ERP?
• This is where ERP comes in
• ERP is a central software system which collects information from every
core business process in an enterprise and consolidates it

• This is because maintaining individual software for every business unit


will be:
• Inefficient
• Difficult to manage
• Inflexible

• Large enterprises need ERP to control, plan and manage their resources
across all their departments, divisions and regions to be more efficient
What is SAP?
• Systems, Applications and Products (SAP)

• SAP is an enterprise resource planning and data management software

• Other ERP software includes Oracle financial and Microsoft Office, but SAP
is the most popular globally

• SAP collects information from all business functions and then consolidates
them in a central location for analysis, planning, management and
controlling of resources

• The ultimate goal of SAP is to increase business efficiency through proper


planning and management of resources
What is ERP?
Manufacturing
Resource
Management Customer
Relationship
Management

Supply Chain
Management

Enterprise
Resource
Planning

Financial
Management

Human
Resource
Management
SAP ERP Application
Resources

Accounts, A/R, A/P, bank etc

Human Resources To manage


Warehouse these
Manufacturing resources we
Sales and Distribution need ERP
Production
application
SAP ERP Application
Resources SAP modules

Accounts, A/R, A/P, bank Financial and Cost Accounting (FI) (CO)

Human Resources Humane Capital Management (HCM)

Warehouse Warehouse Management (WM)


Manufacturing Material Management (MM)
Sales and Distribution Sales and Distribution (SD)
Production Production and Planning (PP)
How SAP works

Accounts (FICO)

Human Resources (HCM)

Warehouse Data Collection


Data Consolidation SAP Database
Manufacturing

Sales and Distribution

Production
Operating System
Operating System
Accounts (FICO)

Human Resources (HCM)


USERS get
ERP Applications Warehouse (WM) information from
Manufacturing (PP) ERP Applications

Sales and Distribution (SD)

Production (MM)

Applications runs Basis People run these


on a layer (Web Application Server) layers are called
basis Admin. We
Oracle, Microsoft login through basis
SQL, Informix,
DB2, SAP hana
Database layers and can see
what’s happening in
Unix, Linix ,Windows,
MAC-OS
Operating System DB, OS, applications
etc
Intel, mainframe, super
computer, mini, macros, Hardware
IBM, Spark by sun etc

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