2/13/2017 SAPERPIntroduction

SAPERPIntroduction
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SAP is a market leader in providing ERP (Enterprise Resource and Planning) solutions and services. In this chapter, we will try to
understandmoreonERPandwhereitshouldbeused.Inaddition,wewilllearntheimplementationtechniquesofERPalongwiththeERP
packagesavailableinthemarket.

WhatisERP?
EnterpriseResourcePlanning(ERP)isasoftwarethatisbuilttoorganizationsbelongingtodifferentindustrialsectors,regardlessoftheir
sizeandstrength.

TheERPpackageisdesignedtosupportandintegratealmosteveryfunctionalareaofabusinessprocesssuchasprocurementofgoods
and services, sale and distribution, finance, accountings, human resource, manufacturing, production planning, logistics & warehouse
management.

BusinessProcessIntegration
Everybusiness,regardlessoftheindustrytheybelongto,requireconnectedsystemswithefficientinformationflowfromonebusiness
process to another. Business Process Integration (BPI) plays an important role in overcoming integrating challenges that allows
organizationstoconnectsystemsinternallyandexternally.

BusinessProcessIntegration(BPI)allows

automationofbusinessprocesses,

integrationofsystemsandservices,

securesharingofdataacrossnumerousapplications,and

automationofmanagement,operational,andsupportingprocess.

Thefollowingillustrationshowsanoverviewofvariousbusinessprocessesrunninginanenterpriseandhowtheyareintegrated.

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EvolutionofERP
Duringearlyphasesofdevelopment,integratedsolutionsweredesignedforparticularprocessareassuchas

MaterialManagementtheintegratedsystemwasknownasMaterialRequirementPlanning(MRP)

ManufacturingtheintegratedsystemwasknownasManufacturingResourcePlanning

Howevernoneoftheintegratedsystemscamewithacompletesolutionforanorganizationcoveringmajorbusinessprocessareas.In
early1990s,theGartnerGroupfirstusedtheacronymERP.Bymid1990s,ERPsystemsaddressedallthecoreenterprisefunctions.

In the early stages, most of the ERP solutions were focused on automating back office functions that were not directly affecting
customers or general public. Later, frontofficefunctions such as customer relationship management and ebusiness systems were
integrated.

FunctionsofERP
AnERPsystemtypicallyperformsthefollowingfunctions

Supportstheintegratedbusinessprocessinsidetheorganization.

Improvescapitalplanningandhelpsinexecutingorganizationalplansandstrategies.

Helpsspeedupthedecisionmakingprocessovertheanalysisofaccuratedata.

Helpsextendthebusinessnetworktowiderdomains,expandingtheproductsandservicestoreachmorecustomers,suppliers,
andpartners.

Identifiesoperationalriskstoimprovegovernance.

Providesprotectionagainstorganizationaldatabreachesandsecuritythreatstoleakageofinformation.

Makestheorganizationadaptabletotherapidchangesinthebusinessprocessaccordingtotheneeds.

Giveslongtermprofitbyprovidingmeanstoincreasethecustomerbase.

FunctionalAreas
ERPisabusinessmanagementsoftwareisusuallyasuiteofintegratedapplicationsthatacompanycanusetocollect,store,manage,
andinterpretdatafrommanyfunctionalareasincluding

FinancialAccountingDealswithfinancialtransactionsanddata.

HumanResourceDealswithinformationrelatedtoemployeeofanorganization.

Customer Relationship Management Deals with capturing and managing customers relationship, facilitating the use of
customerexperiencetoevaluatetheknowledgedatabase.

SalesandDistributionDealswithorderplacement,delivery,shipmentandinvoicing.

LogisticsandWarehouseManagementDealswithstorageofproductsandshipment.

ManufacturingandMaterialManagementDealswiththeproductionandproductionplanningactivities.

SupplyChangeManagementDealswiththemovementofproducts,storing,managing,andcontrollingsupplies.

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BusinessIntelligenceAnalyzesdataandconvertsthesametoinformation.

AdvantagesofERP
Byintegratingthebusinessprocesses,theERPoffersthefollowingadvantages

Savestimeandexpenses.

Allowsfasterdecisionmakingbythemanagement,utilizingthedataandreportingtoolsdesignedinthesystems.

Singledatasourceandsharingofdataamongalltheunitsofanorganization.

Helpsintrackingeverytransactionthattakesplaceinanorganization,fromstartingtillend.

Suppliesrealtimeinformationwheneverrequired.

Provides synchronized information transfer in between different functional areas such as sales, marketing, finance,
manufacturing,humanresource,logistics,etc.

DisadvantagesofERP
ItisnotalwayseasytoincorporateERPinanorganization.ERPsuffersfromthefollowingdrawbacks

SometimesbusinessprocessescriticaltoanorganizationaretobereengineeredtoalignthemwithanERPsolution.

Costofcomplexintegrationcanbeveryhigh.

SwitchingfromoneERPsolutiontoanotherincreasestheimplementationcostevenfurther.

Endusersaretobetrainedfortheirdailyoperations.

Customizationisnotpreferred.

ERPPackages
Many companies develop and implement various ERP packages according to their budget and requirements to help them meet their
businessneedsandruntheirbusinessefficiently.

ThefollowinglinktakesyoutoapagefromWikipediawhereyoucanfindalistofalmostalltheERPpackagesdesignedworldwide.

http://en.wikipedia.org/wiki/List_of_ERP_software_packages

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