Chapter 2

Introduction to Enterprise Systems

1 Magal and Word | Integrated Business Processes with ERP Systems | © 2011
 Learning Objectives
1. Discuss the evolution and key business benefits
of enterprise systems
2. Explain the role of enterprise systems in
supporting business processes
3. Differentiate the different categories of data
within SAP ERP
4. Understand the major options for reporting

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 Enterprise Systems (ES)
Complex and powerful information systems
SAP Enterprise Resource Planning (ERP) system is the
world’s most popular

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Introduction to SAP ERP

http://www.youtube.com/watch?v=I1fAcjEIEEM

SAP Online Training : What is SAP ?

http://www.youtube.com/watch?v=lYCEQqSM08I
 Architecture of Enterprise Systems
The way that the users interact with the software, and
the way the software is physically managed
Client-Server
Service-Oriented

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 Enterprise Resource Planning Systems
ERP are the world’s largest and most complex ES
Focus primary on internal operations of an
organization
Integrate functional and cross-functional business
processes
SAP is a fully integrated, global ERP system
Supports multiple languages and currencies

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 The SAP ERP Solution Map

The primary focus of an ERP Similar to the

system is the internal operations of business
a company; for example, human processes in
resources and sales and marketing
figure 1-3
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 The Functional Structure

Most companies maintain vertical (functional) silos

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 SAP ERP Modules

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SAP MM Overview
Creating Material Master
X

http://www.youtube.com/watch?v=7QqWtAfUWQM
 Enterprise Systems Application Suite
Enterprise Resource Planning (ERP)
Focuses on the operations that are performed within an organization
Supply Chain Management (SCM)
Connects a company to another companies that supplies the materials
it needs to make its production
Supplier Relationship Management (SRM)
Manage the overall relationships with the materials suppliers
Product Lifecycle Management (PLM)
Help companies administer the processes of research, design, and
product management

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What is Supply Chain Management?

http://www.youtube.com/watch?v=Mi1QBxVjZAw
 The ES Architecture Suite

Suite of Software: The data and processes are

integrated among the system in the suite

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 What is CRM?
http://www.youtube.com/watch?v=BMtv6sbmdLc

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 Data in an Enterprise System
The central component of any SAP system is the
database that stores data related to all processes

There are three types of data in an ERP system:

Organizational data (levels, elements)
Master data
Transaction data
Associated with process steps

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 Organizational Data
Used to represent the structure of an enterprise.
Examples are companies, subsidiaries, factories,
warehouse, storage areas, and sales regions.
Used to structure of the enterprise in terms of legal or
business purposes.
Data rarely changes

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 Organizational Data

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 Organizational Level - Client
Client:
Highest organizational level
Represents the enterprise; comprised of many companies

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Organizational Level – Company Code
Central organizational element in financial accounting
Books are maintained at this level for legal reporting
Identifies legal entities in an enterprise (Client)
Legally independent from other companies in the
enterprise
Client can have multiple company codes
Company code must belong to only one client

e.g. GBI has two companies one in US and one in Germany (US00,
DE00)

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 Organizational Level - Plant
Performs multiple functions
Used by many processes
Represents factory, warehouse, office, distribution
center, etc.
A company code can contain multiple plants.
However, a plant can belong to only one company
code.
• GBI operates five plants for the
manufacture and storage of bicycles
and accessories.

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 GBI Organizational Data

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 Master Data
Long-term data that typically represents entities
associated with various processes.
Customer
Vendor
Material
Typically include
General data (across company codes)
Financial data
Area-specific data (Sales, Purchasing, Plant)

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 Material Master
Material master data is used in numerous processes
Procurement
Fulfillment
Production
Material planning
Asset management
Project systems
Lifecycle data management

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 Material Master
Data are grouped based on
Process
Material type
Organization element

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 Material Master Data
Basic data such
as material
number,
description, and
weight are
relevant to almost
all processes. The
other views are
relevant only to
certain processes:
Purchase data for
Procurement process

Sales data for fulfillment

process, etc.

EX2: Student material

Master

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 Material Types
Here are the most common types:

Raw materials (ROH)

Purchased, not sold, used in production
Purchasing- and production-related views
No sales-related view
(e.g. from GBI wheels, tires, …)
Semi-finished goods (HALB)
Produced using other materials (ROH, HALB)
Used in the production of other materials (HALB, FERT)
Not purchased or sold
(e.g. from GBI front wheel assemblies,…)

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 Material Types (Continued)
Finished goods (FERT)
Produced using other materials (ROH, HALB)
Sold to customers
(e.g. from GBI deluxe touring bicycle which is produced from
raw materials (such as frames) and semi finished goods such
as wheel assemblies)
Trading goods (HAWA)
Purchased and resold without additional processing
(e.g. from GBI helmet, …)

Numerous other types

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 Organizational Level
Same material can be used differently by different
organizational levels
Different company codes
 HALB in one, FERT in another
Different plants
 Only exports or imports in specified plants, not all
(e.g. from GBI: GBI may choose not to ship bikes to customers
from Dallas plant. Rather it sends the bikes to its two other
distribution center (Miami, and San Diago), in this case sales related
data for the bikes are included in the material master’s definition for
Maiami and San Diago, but not for Dallas)
Different sales-related organizational elements
 Wholesale vs. retail
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 GBI Product Structure

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 Transaction Data
Data generated during execution of process steps
e.g. quantities, prices, or transactions
Transaction Data are a combination of
Organizational data
Master data
Situational data
Example: Sales order creation
Organizational elements: Client, Company Code, Sales
Area
Master Data: Customer, Material
Situational data: Date, Time, Person
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 Transaction Data

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 Documents
SAP ERP uses several different types of documents to record
transaction data
Transaction documents
 Requisition, purchase order, invoice, delivery document, etc.
FI documents
 Record the impact on financial accounting
CO documents
 Record the impact on management accounting
Material documents
 Record the impact on material status (value, location)

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 Purchase Order Document

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 Reporting
ES produce and consume massive amount of data in th day-
to-day execution of business processes (terabytes of live
data!)

How can a company extract the meaningful

information it needs to make better decisions
and operate more efficiently?
Reporting capabilities varies from a simple list of
information for basic users to analytical tools
that can perform analytical analysis.
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 SAP ERP provides two reporting options:

Transactional system - Online Transaction Processing

(OLTP)
designed to capture and store detailed transaction
data
Informational system - Online Analytical Processing
(OLAP)
designed to do detailed data analysis
How it is done?
Work lists in SAP ERP
Online lists in SAP ERP
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 Briefly explain the three types of data in an enterprise
system and how they are related.

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