INTORDUCTION TO ERP
E- Enterprise R- Resource P- Planning
Definition- An integrated system that serves all departments within an enterprises.
ERP is a way to integrate data and process of an organization into one single system.
Software solution the enterprises needs taking the process of an organization goals tightly
Integrating all functions of an enterprises.
WHAT IS SAP
S- System A- Application P- Products
SAP started in 1972 by five former IBM employees in Mannheim, Germany, states that it is the
world’s largest inter-enterprise software company and world’s fourth largest independent software
supplier, overall.
SAP have a very high level of integration among its individual applications which guarantee
consistency of data through out the system and company itself.
SAP HISTORY
History- Enterprises Resource Planning (ERP) is the evolution of Manufacturing Requirements
Planning (MRP II). From business prospective, ERP has expended from coordination of
manufacturing process to the integration of enterprises wide backend process. From technological
aspect, ERP has evolved from legacy implementation to more flexible tiered client server
architecture.
SAP EVOLUTION IN ERP
1970s MATERIAL REQUIRMENTS PLANNING (MRP)
1980s MANUFACTURING RESOURCE PLANNING (MRP II)
1990s ENTERPRISE RESOUCE PLANNING (ERP)
2000s EXTENDED ERP
1. The 1970s: A Real Time Vision
In 1972, five former IBM employees launch a company called Systems, Applications, and Products in
Data Processing in Mannheim, Germany. One Year later the first financial accounting software is
complete, forming the basis for the continuous development of other software components in what
later come to be known as the “R/1” system.
2. The 1980s: Rapid Growth
The SAP “R/2” system attains the high level of stability of the previous generation of programs.
3. The 1990s: A New Approach To Software & Solutions
SAP “R/3” system is unleashed on the market. By 1996, the company has earned 1,089 new SAP R/3
customers. At the end of the year, SAP R/3 has been installed in more than 9,000 systems
worldwide.
4. The 2000s: Innovation For The New Millennium
With the internet, the user becomes the focus of software applications. Currently, more than 12
million user work each day with SAP solutions. There are now 121,000 installation worldwide, more
than 1,500 SAP partners, over 25 industry specific business solutions and more than 41,200
customers in 120 countries. SAP is the world’s third largest independent software vendor.
ERP Vendors Market Share Area
ERP BASED COMPANY ERP NATURE MARKET SHARE AREA
SAP 100%
ORACLE DATABASE 70-80%
BANN CONSTRUCTION 60-70%
PEOPLE SOFT MAN POWER CONSULTING 60-70%
JD EDWORDS PRODUCTION 50-60%
ERP VENDORS
1. Functional Modules
SAP ORACLE PEOPLESOFT JD EDWARDS
SD MARKETING & SALES SUPPLY CHAIN ORDER MANAGEMENT
MM PROCUREMENT SUPPLIER RELATIONSHIP INVENTORY &
PROCUREMENT
PP MANUFACTURING MANUFACTURING
MANAGEMENT
QM ENTPRISE PERFORM TECHNICAL
FOUNDATION
PM SERVICE ENTERPRISE SERVICE
HR HUMAN RESOURCE HUMAN CAPITAL WORKFORCE
MANAGEMENT MANAGEMENT
FI FINANCIAL FINANCIAL MANAGEMENT FINANCIAL
SOLUTION MANAGEMENT
CO TIME & EXPENSE
MANAGEMENT
AM ASSET MANAGEMENT ENTERPRISE ASSET
MANAGEMENT
PS PROJECTS PROJECT MANAGEMENT
WF CONTRACTS SUBCONTRACT & REAL
ESTATE
2. Technical Modules
SAP STANDS FOR PURPOSE
ABAP/4 ADVANCE BUSINESS APPLICATION FORM DESIGN
PROGRAMMING
XI EXCHANGE INFRASTRUCTURE
NET VIEWER
BASIS BUSINESS APPLICATION SYSTEMS HARDWARE & NETWORKING
INTEGRATED SOLUTIONS
BI/BW BUSINESS INFORMATION/ BUSINESS DATABASED RECORD
WAREHOUSE
S/4 HANA QUICK REPORTING
ERP ADVANTAGES
ADVANTAGES HOW
1 Reliable Information Access Common DBMS consistent and accurate data,
improved reports.
2 Avoid data and operations redundancy Modules access same data from the central
database, avoid multiple data input, and
upgrade operations.
3 Delivery and cycle time reduction Minimizes retrieving and reporting delays.
4 Cost Reduction Time savings, improved control by enterprise
wide analysis of organizational decisions.
5 Easy Adaptability Changes in business process easy to adapt and
restructure.
6 Improved Scalability Structure and modular design with “add-ons.”
7 Improved Maintenance Vendor supported long term contract as part of
the system procurement.
8 Global Outreach Extended modules such as CRM and SCM.
9 E-Commerce, E-Business Internet commerce, collaborative culture.
ERP DISADVANTAGES
DISADVANTAGES HOW
1 Time Consuming Minimize sensitive issues, internal politics and
raise general consensus.
2 Expensive Cost may vary from thousands of dollars to
millions. Business process reengineering cost
may be extremely high.
3 Conformity of the modules The architecture and components of the
selected system should confirm to the business
process. Culture and strategic goals of the
organization.
4 Vendor dependence Single-Vendor v/s Multi-Vendor consideration,
operation for “best of breeds,” long term
committed support.
5 Features and complexity ERP system may have too many features and
modules so the user needs to consider carefully
and implement the needful only.
6 Scalability and global outreach Look for vendor investment in R & D, Long term
commitment to product and services, consider
internet enabled system.
7 Extended ERP capability Consider middle-ware “add-ons” facilities and
extended modules such as CRM and SCM.
WHAT IS ASAP METHODOLOGY
ASAP stands for Accelerated SAP. It is one of the important Software Development Life Cycle (SDLC)
used for SAP Implementation Projects. It is one of the best ERP system. SAP projects are long and
intense. They require lots of effort and many resources from developers and managers. It can be
really tricky if SAP projects are not planned in a proper form. SAP itself gives a proper methodology
to design the project so it will give reliable results.
ASAP METODOLOGY: SAP IMPLEMENTATION PHASES
The ASAP Methodology prescribes a correct pathway for SAP implementation projects. It consists of
six steps, the 6 major phases of SAP implementation: Pre Sales, Preparation, Business Blueprint,
Realization, Going Live and Post Production. Here are six phases of a SAP implementation project.
1. Pre-Sale of ERP
In this pre-sale phase, ERP (SAP) tries to get the project from the client. Most clients consider more
than one option for their business and then give all options are try to see which one provides the
best result. In most cases, clients get the ERP software license directly from the software companies.
This step may or may not include a test to check which ERP system is most suitable for the client.
2. Project Preparation
In which the project team is identified and mobilized, the project standards are defined and the
project work environment is set up. Once a client decided has decided on its ERP system, then they
prepare the landscape of the project. In this step server information, project cost, resources, Subject
Matter Experts (SME) and business team are decided by the Project Management Organization
(PMO). It consist of project managers, a steering committee, core business members, and sponsors.
A project team studies legacy system and gathers information regarding core systems, interfaces,
what interfaces the client wants, what is necessary, what is nice to have etc. The core team carries
out “as is” studying, a study of the current system and its process. The project management team
also hires resources and carries out project planning and outline.
3. Business Blueprint
In which the business process are defined and the business blueprint document is designed. In this
phase, the core team does “GAP analysis,” an analysis of the differences between the system as is
and the system to be studied. Allocated resources write down the rules and requirements for the
new system. Integration points, interfaces and process maps are finalized. Functional consultants
write the functional specification. If needed technical specifications are written down for developers
to do further configuration. A testing also started working on preparing testing steps and scenarios.
Financial specifications and technical specifications are created in this step for further development
and configurations.
4. Realization
In which the system is configured , knowledge transfer occurs, extensive testing unit is completed
and data mappings & data requirements are defined. In the realization step, functional consultants
carry out configuration. Development is done for the required customization. Testing is carried out
by the core team. Basis configuration is carried out by security team. A basis team moves all
configuration from one server to another for testing purposes. Testing is mostly done in the quality
control server. All the configurations upload master data across all modules (sample load of few
parts or entire data end as per client wants). Unit testing and integration testing has been done by
testing team. Unit testing, integration testing and day in the life testing happen at this stage.
5. Pre-Goes-Live-Phase
In which final integration testing, stress testing and conversion testing are conducted and all end-
users are trained. After that the data is migrated from the legacy system, the new system is
activated. In this step, all configurations from the golden client will be moved to other services.
Uploading master data into the new system is done mostly using LSMW, BAPI, BADI. Cut over
activities are done only when we stop the legacy system and start using the SAP system. End-user
training and user documentation are carried out in this pre-go-live stage. After all cut-over activities,
SAP implementation goes live in a production environment.
6. Post-Production Support
In this step, the team helps the client to solve if any production issue came regarding configuration,
master data change, or transaction issues. Also the team will provide training to end-users and
super-users. All the support documentation work has been completed in this step.
SAP LANDSCAPS
QUALITY
DEVELOPMENT PRODUCTION
CONTROL
CLIENTS CLIENTS CLIENTS
110- Configuration 210- Quality Test 310- Production
120- Sandbox 220- Training-1
130- Development Test 230- Training-2
ENTERPRISE STRUCTURE
1. COMPANY
Definition- The smallest organizational unit for which individual financial statement can be drawn up
according to the relevant commercial law. A company can consist one or more company codes. All
company codes with in a company must use the same transaction chart of accounts and same
financial year breakdown. The company code currencies can be different. A company has one local
currency in which its transaction figures are recorded.
Path- (Display IMG - Enterprise Structure - Definition - Financial Accounting - Define Company)
T-Code- (OX15)
Process- Click on Define Company - Click on New Entries
Company- TATA
Company Name- Tata Group
Street- Laxmi Nagar
PO Box- 100
Postal Code- 110048
City- New Delhi
Country- IN
Language- EN
Currency- INR
(Save or Ctrl+S)
2. COMPANY CODE
Definition- The smallest organizational unit of Financial Accounting for which a complete self-
contained set of accounts can be drawn up for purpose of external reporting
Path- (Display IMG - Enterprise Structure - Definition - Financial Accounting - Edit, Copy, Delete,
Check Company Code)
T-Code- (OX02)
Process- Click on Edit Company Code Data – Click on New Entries
Company Code- TATA
Company Name- Tata Steels Pvt. Ltd.
City- New Delhi
Country- IN
Language- EN
(Save or Ctrl+S)
Fill all requirement fields related to company additional information
(Save or Ctrl+S)
3. BUSINESS AREA
Definition- It is used to get financial reports in different die mentions. It can be graphical or product
line.
Path- (Display IMG - Enterprise Structure - Definition - Financial Accounting - Define Business Area)
T-Code- (OX03)
Process- Click on Define Business Area - Click on New Entries
Business Area Description
TAND Laxmi Nagar-New Delhi
TAUP Noida-Up
TAHR Gurgaon-Haryana
(Save or Ctrl+S)
4. CREDIT CONTROL AREA
Definition- It is a top hierarchy of customer credit management. Here we define limit of customer. It
is include one or more company codes. It is not possible to divide a company code into several credit
control areas.
Path- (Display IMG - Enterprise Structure - Definition - Financial Accounting - Define Credit Control
Area)
T-Code- (OB45)
Process- Click on Define Credit Control Area - Click on New Entries
Credit Control Area-TATA
Currency- INR
(Save or Ctrl+S)
Go back from menu
Credit Control Area Description
TATA Credit Control Area For TATA
(Save or Ctrl+S)
5. ASSIGN COMPANY CODE TO COMPANY
Definition- Here we assign company code to company.
Path- (Display IMG - Enterprise Structure - Assignment - Financial Accounting - Assign Company Code
To Company)
T-Code- (OX16)
Process- Click on Assign Company Code to Company - Click on Position
Company Code- TATA
Press Enter
Company Code City Company Name
TATA New Delhi TATA
(Save or Ctrl+S)
6. ASSIGN COMPANY CODE TO CREDIT CONTROL AREA
Definition- Here we assign company code to credit control area.
Path- (Display IMG - Enterprise Structure - Assignment - Financial Accounting - Assign Company Code
To Credit Control Area)
T-Code- (OB38)
Process- Click on Assign Company Code to Credit Control Area - Click on Position
Company Code- TATA
Press Enter
Company Code Company Name City Credit Control Area
TATA TATA New Delhi TATA
(Save or Ctrl+S)
FINANCIAL ACCOUNTING GLOBAL SETTING
1. MAINTAIN FISCAL YEAR VARIANT
Definition- Fiscal year variant is used to define Fiscal Year. Fiscal year financial year of a company.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) - Fiscal
Year Posting Period - Maintain Fiscal Year Variant)
T-Code- (OB29)
Process- Click on Maintain Fiscal Year Variant - Click on Position
There are standard fiscal year V3 available in our system for April’ 2019 to March’ 2020.
FI Year Variant- V3
Press Enter
FV Description Year Calendar No. of Posting No. of Special
Depended Year Periods
V3 Apr to Mar - - 12 4
Select the row of V3 in FV – Click on copy button – Change to T3 from V3
Press Enter
Click on copy all
Click to continue
(Save or Ctrl+S)
2. ASSIGN COMPANY CODE TO FISCAL YEAR VARIANT
Definition- Here we assign company code to fiscal year variant.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) - Ledger
- Fiscal Year Posting Period - Assign Company Code To Fiscal Year Variant)
T-Code- (OB37)
Process- Click on Assign Company Code to Fiscal Year Variant - Click on Position
Company Code- TATA
Press Enter
Company Code Company Name Fiscal Year Variant Description
TATA TATA T3 April To March
(Save or Ctrl+S)
3. DEFINE VARIANT FOR OPEN POSTING PERIODS
Definition- It is describe the specifications for a posting period. Each company code refers to exactly
one variant. Therefore, as many company codes require can use the same variant.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) - Ledger
- Fiscal Year Posting Period - Posting Periods - Define Variant for Open Posting Periods)
T-Code- (OBBO)
Process- Click on Define Variant for Open Posting Periods - Click on New Entries
Variant Variant Name
TATA Posting Period Variant for TATA
(Save or Ctrl+S)
4. ASSIGN COMPANY CODE TO VARIANT FOR OPEN
POSTING PERIOD
Definition- Here we assign company code to variant for open posting period.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) - Ledger
- Fiscal Year Posting Period - Assign Company Code To Fiscal Year Variant)
T-Code- (OBBP)
Process- Click on Assign Company Code to Variant for Open Posting Period - Click on Position
Company Code- TATA
Press Enter
Company Code Company Name New Delhi Variant
TATA TATA New Delhi TATA
(Save or Ctrl+S)
5. OPEN & CLOSE POSTING PERIODS
Definition- It is describe the specifications for a posting period. Each company code refers to exactly
one variant. Therefore, as many company codes require can use the same variant.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) - Ledger
- Fiscal Year Posting Period - Posting Periods - Open & Close Posting Periods)
T-Code- (OB52)
Process- Click on Open & Close Posting Periods - Click on New Entries
VAR. A FRO TO FRO YEA TO YEA FRO YEA TO YEA AV
M M R R M R R
ACCT ACCT PER-1 PERIO PER-2 PERIO GR
. . D D .
TATA + 1 2019 12 2019 13 2018 16 2018
TATA A ZZZZZ 1 2019 12 2019 13 2018 16 2018
TATA D ZZZZZ 1 2019 12 2019 13 2018 16 2018
TATA K ZZZZZ 1 2019 12 2019 13 2018 16 2018
TATA M ZZZZZ 1 2019 12 2019 13 2018 16 2018
TATA S ZZZZZ 1 2019 12 2019 13 2018 16 2018
TATA V 1 2019 12 2019 13 2018 16 2018
Press Enter
(Save or Ctrl+S)
6. DEFINE FIELD STATUS VARIANT
Definition- Field Status Group are used to control G/L Accounts at transaction level.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) - Ledger
- Fields - Define Field Status Variant)
T-Code- (OBC4)
Process- Click on Define Field Status Variant
FSTV Field Status Name
0001 Field Status for 0001
Select the row of 0001
Click on Copy button
Change To TATA from 0001
Press Enter
Click on copy all
Click to continue
(Save or Ctrl+S)
7. ASSIGN COMPANY CODE TO FIELD STATUS VARIANT
Definition- Here we assign company code to field status variant.
Path- (Display IMG – Financial Accounting (New) - Financial Accounting Global Setting (New) - Ledger
– Fields - Assign Company Code To Fields Status Variant)
T-Code- (OBC5)
Process- Click on Assign Company Code to Variant for Open Posting Period - Click on Position
Company Code- TATA
Press Enter
Company Code Company Name New Delhi Variant
TATA TATA New Delhi TATA
(Save or Ctrl+S)
8. DEFINE DOCUMENT TYPES FOR ENTRY VIEW
Definition- It is used to classify accounting document at transaction level. It is entered in the
document header and applies to the whole document.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) –
Document – Document Types – Define Document Types for Entry View)
T-Code- (OBA7)
Process- Click on Define Document Types for Entry View
DOCUMENT TYPES ALLOWED
Object Description Used For
SA G/L Account Document FI
SB G/L Account Posting FI
AB G/L Account Reverse Document FI
01 Number Range FI
RE Vendor Invoice MM
KR Vendor Invoice FI
KG Vendor Credit Memo FI
KA Vendor Document FI
KN Net Vendor FI
KP Vendor Account Maintenance FI
RV Customer Invoice SD
DR Customer Invoice FI
DG Customer Credit Memo FI
DA Customer Document FI
DN Net Customer FI
DP Customer Account Maintenance FI
KQ Transport Invoice FI
KS Contract Invoice FI
KV Raw Material Payment FI
KW Contractor Payment FI
KX Transporter Payment FI
KY Stores Payment FI
ML ML Settlement FI
RA Sub Credit Memo Settlement FI
RN Net Invoice FI
PR Price Change FI
AA Asset Accounting FI
AN Net Asset Accounting FI
AF Dep. Posting FI
KZ Vendor Payment FI
DZ Customer Payment FI
WA Goods Issue FI
WL Goods Issue/ Delivery FI
WE Goods Receipt FI
WN Net Goods Receipt FI
WI Inventory Document FI
SK Cash Document FI
SU Adjustment Document FI
EU Euro Rounding Diff. FI
EX External Number FI
ZP Payment Posting FI
ZR Bank Reconciliation FI
ZS Payment By Cheque FI
ZV Payment Clearing FI
UE Data Transfer FI
ACCOUNT TYPES ALLOWED
Object Description Used For
G/L Process G/L Accounting FI
A/P Process Vendor Accounting FI
A/R Process Customer Accounting FI
Asset Process Asset Accounting FI
Material Process Material Accounting FI
9. COPY TO DEFINE DOCUMENT NUMBER RANGES
Definition- It is uniquely identifies every transaction with in a fiscal year in a company code.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) –
Document – Document Types – Define Document Types for Entry View – Define Document Number
Range)
T-Code- (FBN1)
Process- Click on Define Document Types for Entry View
Click on define document number range
Company code- TATA
Click on Change Interval
Click on Insert Interval
No. Year From Number To Number Current Number Ext.
AB 2019 00001001 00001099 0
Press Enter
(Save or Ctrl+S)
10. COPY TO COMPANY CODE
Definition-
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) –
Document – Document Types – Define Document Types for Entry View – Copy To Company Code)
T-Code- (OBH1)
Process- Click on Copy To Company Code
General Selections
Number Ranges Number 00 To ZZ
Fiscal Year 9999 TO -
Source Company Code Details
Company Code 0001 To -
Target Company Code Details
Company Code TATA To -
Click on Execute
Yes
Back From Menu
11. COPY To FISCAL YEAR
Definition-
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) –
Document – Document Types – Define Document Types for Entry View – Copy To Fiscal Year)
T-Code- (OBH2)
Process- Click on Copy To Fiscal Year
General Selections
Company Code TATA To -
Number Ranges Number 00 To ZZ
Source Fiscal Year Details
To Fiscal Year 2018 To -
Target Fiscal Year Details
To Fiscal Year 2019 To -
Click on Execute
Yes
Back From Menu
12. DEFINE TOLERANCE GROUP FOR EMPLOYEES
Definition- It is used to determine maximum limits of posting document amount and discount
percentage for employee is authorised to post.
Path- (Display IMG - Financial Accounting (New) - Financial Accounting Global Setting (New) –
Document – Tolerance Group – Define Tolerance Group For Employees)
T-Code- (OBA4)
Process- Click on Define Tolerance Group For Employees
Click on New Entries
