Introduction to SAP for ERP
(Accounting and Finance)
Mr. Ijaz Yusuf
Director
Center for Supply Chain Research
School of Business and Economics
University of Management and Technology, Lahore
03054440603
What is ERP?
Software tools
Manages business systems
◦ Manufacturing, Supply chain, receiving,
inventory, customer orders, production
planning, shipping, accounting, HR, CRM,
SRM,DSS, Financials
Allows automation and integration of
business processes
Enables data and information sharing
Enterprise-wide system
Introduces “best practices”
Email:
[email protected] Cell:
03054440603
ERP Definitions
ERP Systems attempts to integrate all
data and processes of an organizations into
a unified system.
ERP is integrated software that supports the
information flows among the processes
in the Supply Chain.
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ERP SOFTWARES
SAP People Soft
BANN Oracle
JD Edwards Client Serve Three
Karen ezijobz
Sage MRP(II)
Microsoft Great Plains Lease Soft
(GP) eX.e.ge.Sys
Engineer Link
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BUSINESS PROCESS MODULE
Sales and Distribution
Production Planning
Financial Accounting
Human Resources
Material Management
Plant Maintenance
Quality Management
Project Management
SRM, CRM
Email:
[email protected] Cell:
03054440603
Evolution of ERP
1960s: software packages with inventory
control
1970s: MRP systems
◦ Production schedule with materials
management
1980s: MRPII systems
◦ Adds financial accounting system
1990s: MRPII
◦ Integrated systems for manufacturing execution
Late 1990s: ERP
◦ Integrated manufacturing with supply chain
Email:
[email protected] Cell:
03054440603
Why ERP
Benefits to our customers
◦ Cost
◦ Quality
◦ Delivery
◦ Flexibility
◦ Integration
◦ Service
◦ Inventory
◦ Productivity
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ERP Helps in….
Decision support system (DSS)
Smooth flow of routine process
Automatic record keeping
Common inter-department resource pool
Better planning at all levels
Data warehousing & various self-
service interface for customers,
suppliers & employees
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Overall Business Benefits
Information
◦ Maximizes information throughput
◦ Provides timely information
◦ Integrates information throughout supply chain
Minimizes response time
Pushes decision making down to lowest levels
Reduces costs
Cuts inventory
Improves operating performance
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Department Benefits
Sales
◦ Increased efficiency
Lower quotes, reduced lead time, improved responsiveness
Manufacturing
◦ Concurrent engineering
◦ Faster design and production
Data Service
◦ Accurate customer service history and warranty
information
Accounts Payable
◦ Suppliers paid accurately
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Department Benefits
Supply Chain Management
◦ Supply Chain Planning, Claim Processing, Commission
calculations, Supplier scheduling, Inspection of goods, order
entry, Inventory
Project Manufacturing
◦ Costing, billing, time & expense, activity management
Financials
◦ Cash Management, Fixed assets, General ledger, Accounts
Payables, Accounts Receivables
Data Warehouse
◦ Self-service interface among Suppliers, Customers, Employees
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Systems Benefits
Eliminating legacy systems
◦ Reduces incompatible data
◦ Can cause fragmentation
Allows sharing and monitoring of information across
organization
Foundation of e-Business
◦ Back-office functions
Standardization
Helps obtain and maintain competitive advantage
Improved interactions with customers and suppliers
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Disadvantages
Limited training budget
Lack of Skills and Experience
Cost estimate is $ 30,000 to 500,000,000
Limited technical staff
Systems difficult to use
Too rigid system
Compatibly problem with legacy systems
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SAP
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About SAP “The Company”
SAP AG, the pioneer in ERP systems is on 1972 by five
former IBM employees in Mannheim, Germany.
Rank in top 2 companies (with Oracle) with 25.4%
Market share in the world.
Revenues more than € 9 billion or 2.57 billion dollars.
Initial breakthrough was R/2 for mainframes in 1979
R/3 was in 1992 with user of more than one million
worldwide
First two customers of SAP are CompUSA Inc. & Home
Depot in retail market (source data 2007)
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About SAP
More than 102,500 customers in more
than 120 countries run SAP applications
SAP currently employs more than 47,578
people in more than 50 countries
Providing 28 Industry Solutions
More than 21,600 companies run SAP
More than 70,000 installations.
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Overview of SAP ERP Software Package
SAP R/2 & SAP R/3
Advantage of SAP R/3
Highly customized
Scalable
Suited to all types & sizes of organizations
Allow data sharing
Employee use concurrently
System built on a three-tiered
◦ Client/server architecture
◦ Proprietary programming language ABAB/4
◦ Compatible with all major DBMS vendors
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SAP R/3
SAP R/3 connotation signifies a three –tier
system consisting of
◦ Data Base at the backend
◦ Application
◦ GUI (Graphical user interface)
◦ An Open Distributed System is made up of
components that may be obtained from a
number of different sources, which
together work as a single distributed
system.
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SAP Industry Solution
Why Industry solution
◦ Aerospace Industry
◦ Defense Industry
◦ Utilities Industry
◦ Automotive
◦ Banking
◦ Health Care
◦ Pharmaceuticals and Others
Improved speed, Accuracy, Efficiency, Productivity, Revenue
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SAP Projects in Pakistan
Siemens Pakistan Auditor General of
Pakistan Refinery Ltd Pakistan (PIFRA)
Packages Ltd Pakistan Petroleum
Limited
Jahangir Siddiqui &
Company Pakistan State Oil (PSO)
ICI Pakistan (Pvt) Ltd Atlas Honda Ltd.
Indus Motors National Refinery
Engro Chemical Pakistan Limited
Limited Thal Jute Mills
Lakson Tobacco
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IMPLEMENTATION PROBLEM
Costly if not managed properly: variables that affect
Cost of implementation are scope, resources,
methodology and management.
Business terminology do not match with functionality in
ERP
Does not define and refine the scope as project
progress
High turnover of employees
Lack of upper management support
ERP Team must be empowered to make decisions
without being second-guessed by management.
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ERP SOFTWARE LICENSING FEE
Simple Customized ERP to SAP fee varies
from Rs. € 35,000 (Basic) to
€ 180,000 (Comprehensive)
Minimum $695 per seat for initial
purchase and $95 for renewal
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ERP SOFTWARE HOUSES
www.sap.com
www.ezijobz.com
www.eXegesys.com
www.sage.com
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