Overview and Implementing SAP Software in Organizations ...

Different Views upon SAP = Course RoadmapEnterprise Software Software in in a a Nutshell NutshellOverview and ImplementingSAP Software in in OrganizationsTechnische Universität MünchenChair for Information Systems© Prof. Dr. H. KrcmarDr. WittgesDr. WittgesCIO„Why deal with SAP ?“Application Consultant„How toimplement SAP ?“H. JehleTechnical Support„What infrastructuredoes SAP need ?“A. MorsM. MohrEnd User„How will SAPsupport my tasks ?“V. NicolescuService Provider„How to operateand provide SAPSolutions ?“Technical Consultant„How does SAP work ?“© Prof. Dr. H. KrcmarLecturerAgendaDr. Holger Wittges,Dipl.-Wirtsch.InfTechnische Universität MünchenLehrstuhl für Wirtschaftsinformatik - I17HCC - SAP HochschulkompetenzzentrumBoltzmannstr. 3D-85748 GarchingTel. +49 (0)89 289-19540Fax +49 (0)89 289-19533E-Mail: holger.wittges@in.tum.deHomepage: www.hcc.in.tum.de1. Overview Enterprise Software & ERP Systems2. Important SAP Solutions3. SAP NetWeaver4. Using Business Process Models to implement ERPWorkflow within SAP Software5. SAP Solution Map6. Case Study – Implementing SAP Software inOrganizations© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarDefinitions ERP1. 1. Overview Enterprise Software &ERP Systems• „ERP (enterprise resource planning systems) comprises of a commercial softwarepackage that promises the seamless integration of all the information flowingthrough the company-financial, accounting, human resources, supply chainand customer information)“ (Davenport, 1998)• „ERP systems are configurable information systems packages that integrateinformation and information-based processes within and across functional areasin an organization“ (Kumar & Van Hillsgersberg, 2000)• “One database, one application and a unified interface across the entireenterprise” (Tadjer, 1998)• “ERP systems are computer-based systems designed to process anorganization’s transactions and facilitate integrated and real-time planning,production, and customer response” (O’Leary, 2001)(Source: Rashid et al., 2000)© Prof. Dr. H. Krcmar

© Prof. Dr. H. KrcmarERP developmentCharacteristics of Enterprise SoftwareCriticality20042000sSOAExtended ERP or ERP IIhighInfrastructureSoftwareBusinessSoftware1990sEnterprise Resource Planning (ERP)1980sManufacturing Resources Planning (MRPII)1970s1960sMaterial Requirements Planning (MRP)Inventory Control PackageslowOfficeSoftwareSource: Extend version of Rashid et al. 2000© SAP AGlowhighAdaptability© Prof. Dr. H. KrcmarA Variety of Enterprise ApplicationsAnatomy of an Enterprise System (ERP I)• Customer RelationshipManagement• Enterprise Resource Planning• Supply Chain Management• E-Procurement & E-Markets• Data Warehousing and Analytics• Portals and KnowledgeManagementCallCenterERPTradingTechnicalsystemsDocument MgmtMarketAnalysisPLMSCMe-SalesE-Procurement© SAP AGSales forceCustomers and customerservice repsSource: Davenport, 1998Sales anddeliveryapplicationsServiceapplicationsManagers andStakeholdersReportingapplicationsCentraldatabaseHumanresourcemanagementApplicationsEmployeesFinancialapplicationsManufacturing Back-officeapplications Administratorsand workersInvetoryand supplyapplicationsSuppliers© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarExtended ERPERP – Business View• Service oriented architecture• Integration of Middleware functionality• Support of more then one central DB• ERP II-System looks more like a open toolset rather than aclosed solution• The integration of all computing within anorganization such that:• all major business processes areencompassed and standardized and• all data is usable by all functionalareas of the business• Enterprise Resource Planning = ERP• Integrate many business functionsinto one seamless application• Usually are applications systemsthat run on top of a RDBMS• Replace 100s of legacy systems inorganizations who use an ERPSource: CSU Chico© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar

© Prof. Dr. H. KrcmarERP – Technical ViewERP Suites• What are Enterprise Resource Planning (ERP) Systems?• Incredibly large, extensive software packages used to manage afirm’s business processes.• Standard software packages that must be configured to meet theneeds of a company• Database programs with the following functions:- Input- Storage/Retrieval28,610+ Tables in SAP- Manipulation- Output• Core Applications• Financials• Human Resources (HR)• Manufacturing• Project Management• Extended ERP• Business Intelligence• Customer Relationship Management (CRM)• Sales Force Automation (SFA)• Supply Chain Management (SCM)• E-Logistics• E-Procurement• Product Life-cycle Management (PLM)• Internet Transformation for ERP• Portals• Exchanges – B2B• Mobile Access© Prof. Dr. H. KrcmarERP functions: examplesWhat is Enterprise Resource Planning ?FinancialsAccounts payableAsset managementAccounts receivablebudgetingManufacturingProduction scheduling Quality controlShop floor executiongeneral ledgerDemand forecastingBill of materialsShop flow management Job cost accountingProject ManagementPlanning schedulesHRTracking project costEmployee informationContracts, resourcesDecision SupportExecutive ISSales &MarketingManufacturingSource: based on Mertens 2001, Abb. 1.1/3 S.5HRAccounting &FinanceStrategic InformationProcurementOne Integrated Information SystemManagerial InformationTransactionInformation© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarAdvantages of ERP systemsDisadvantages of ERP systemsWhat benefitReliable information accessAvoid data and operationsredundancyDelivery and cycle timereductionCost reductionEasy adaptabilityImproved scalabilityImproved maintenanceGlobal outreachE-Commerce, e-businessSource: Rashid et al. 2000HowCommon DBMS, consistent and accurate data, improved reports.Modules access same data from the central database, avoid multipledata input and update operations.Minimizes retrieving and reporting delaysTime savings, improved control by enterprise-wide analysis oforganizational decisions.Changes in business processes easy to adapt and restructureStructured and modular design with “add-ons”Vendor-supported long-term contract as part of the system procurementExtended modules such as CRM and SCMInternet commerce, collaborative cultureDisadvantagesTime-consumingExpensiveConformity of the modulesVendor dependenceFeatures and complexityScalability and global outreachExtended ERP capabilitySource: Rashid et al. 2000How to overcomeMinimize sensitive issues, internal politics and raise generalconsensusCost may vary from thousands of dollars to millions. Businessprocess reengineering cost may be extremely high.The architecture and components of the selected system shouldconform to the business processes, culture and strategic goals ofthe organization.Single vendor vs. multi-vendor consideration, options for “best ofbreeds”, long-term committed support.ERP systems may have to many features and modules so the userneeds to consider carefully and implement the needful only.Look for vendor investment in R&D, long-term commitment toproduct and services, consider Internet enabled systems.Consider middle-ware “add-on” facilities and extend modules suchas CRM and SCM.© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar

What is SAP R/3 ?2. 2. Important SAP Solutions• SAP is an example of an ERP System• SAP R/3• SAP’s Client Server version (Distributes process and presentation)• Based on R/2 (Mainframe version - centralization of data andprocess)• R/3 4.0: release (May 1998) distributes data, process, andpresentation• R/3 4.7: first release, based on NetWeaver components• mySAP ERP 2003• mySAP ERP 2004© Prof. Dr. H. KrcmarmySAP ERP within mySAP Business SuiteArchitekture of mySAP ERP© SAP AG© Prof. Dr. H. Krcmar© SAP AG© Prof. Dr. H. KrcmarSAP Solutions• Online demo:• http://www.sap.com3. 3. NetWeaver© Prof. Dr. H. Krcmar

© Prof. Dr. H. KrcmarSAP NetWeaver – A Logical EvolutionSAP NetWeaver Platform© SAP AG© SAP AG, Annual Report 2004© Prof. Dr. H. KrcmarSAP NetWeaver - Product Roadmap4. 4. Using Business Process Models to to implementERP Workflow within SAP Software© SAP AG© Prof. Dr. H. KrcmarUsing Business Process Models to implement ERPWorkflow within SAP SoftwareToday Change is to costly and slow• Business Process Models describe the business• Workflows describe the technical implementation of theBPM using high level Application components© SAP AG© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar

© Prof. Dr. H. KrcmarSAP Enterprise Services ArchitektureSolution Map• „SAP's Solution Maps are well-defined tools that outline thescope of an organization's business. The Solution Mapsalso show how various processes are covered, includingthe processes that SAP and its partners support“ SAP© SAP AG© Prof. Dr. H. KrcmarSolution Map NetWeaver Level 15) 5) SAP Solution Map© Prof. Dr. H. KrcmarSolution Map mySAP CRM Level 1Solution Map mySAP CRM Level 2http://www.sap.com/solutions/businessmaps/DEE27EBB1D564D8C800231FE6D54325D/index.aspx (18.1.2004)© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar

© Prof. Dr. H. KrcmarQuestions…?6. 6. Case Study – Implementing SAP Software in inOrganizationsImplementing SAP Software in OrganisationsNIBCOS‘S „BIG BANG“ Project• NIBCO‘S „BIG BANG“Teaching Case from: C. Brown & I. Vessey,2000, Indiana University.• Project Goals• Project Organization• Project Timeline• Project Tasks• Discussion: Possible problems and how to avoid them© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarProject GoalsProject Organisation• Enable IT-support for the new supply chain and customerfacingstrategies• Substitute a „patchwork of legacy systems and reportingtools“ with a new, integrated system for• ten plants and• four distribution centers• go live without consultants on 30 th of dec. 1997• big bang approach• „TIGER Triad“ -> Project Lead• „TIGER Den“ -> Workplace• Team size approx. 70 Members© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar

© Prof. Dr. H. Krcmar01.08.1995 Start14 months planning30.09.1996 Kickoff15 months to implement30.12.1997 Go LiveProject TimelineProject Tasks• Project Management• Define Business Responsibilities• Finance and Controlling• Material Management/Production Planning• Sales/Distribution• Change Management© Prof. Dr. H. KrcmarChange Management CategoriesDiscussion: Possible problems and how to avoid them• New• Automate• Eliminate• Transfer• Risk• Difficulty• Relationships• Other© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarLiteratur• Carol, Vessey: „NIBCO‘S BIG BANG“, 2000, IndianaUniversity.• Davenport: „Putting the Enterprise into the EnterpriseSystem“, Harvard Business Review, 1998, p.121.• Rashid, Hossain, Patrick: „The Evolution of ERP Systems:A Historical Perspective“, Idea Group Publishing, 2000.• SAP: help.sap.com online documentation.© Prof. Dr. H. Krcmar