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As technology grows and changes, software has to upgrade accordingly.

However, SAP believes in an environment where you do not have to scrap your
existing software setup. Instead, it would provide upgrades and extend the
functionality of the existing software, thereby reducing costs.

In this image, you can see that to begin with SAP’s technology was based on
Mainframe architecture – based on ABAP and R2. Keeping pace with business
requirements and integrated business processes, technology changes were made
from R2 to three tier R/3 and moved from Mainframes to Client-Server
Architecture. SAP R/3 has always been an “integrated” system where business
processes were integrated within an enterprise’s operations. Capable of e-
commerce since 1996, SAP products incorporated business technology for the
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future, thus to edit
paving theMaster
way forsubtitle style future developments. This
incorporating
eliminated the need for customers to change existing systems and allowed for
“integration” of business processes “between” enterprises.

Finally, with Technology advances and the internet revolution, you now have
services catering to adaptive businesses like Web services. SAP’s Enterprise
service architecture platform features Netweaver, business suites and xApps
offerings, keeping pace with the business requirements of today and the future.
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After the SAP R/1 and SAP R/2 products, SAP introduced SAP R/3. Later, in March of
2003, SAP released SAP ERP, where many other SAP components were included
along with SAP R/3. Inside SAP ERP, SAP R/3 enterprise was just a component.

As you can see here, from this point on SAP ERP was more than just SAP R/3
Enterprise with SAP NetWeaver, since it offers many functional enhancements like
Self Services, self service procurement, internet sales, and SAP SEM. SAP Net Weaver
also contains the SAP Web Application Server. With SAP ERP, a new SAP solution
was born.

The SAP ERP Central Component or SAP ECC, is the evolutionary successor of the
previously offered SAP R/3 Enterprise, and is the central core of SAP ERP.

Compared toClick to edit

the SAP R/3Master subtitle
Enterprise, style ECC there are architectural changes with
in SAP
respect to Enterprise Services Architecture, enhanced usability and new developed
functionality, like the new general ledger.

SAP Business Warehouse, SAP Strategic Enterprise Management, and Internet

Transaction Server integrated into SAP ECC. Customers now have the option to run
these components on the same instance that runs SAP ECC to reduce the system
landscape and save costs. Running the components on separate instances is also
possible. SAP Web Application Server contains all capabilities of SAP basis as well as
additional web capabilities.
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SAP ERP is the result of an ERP offering to SAP R/3. SAP ERP includes all the
functionality of SAP R/3 Enterprise with the large number of additional business
processes like self service, strategic management, and others. SAP ERP is an integrated
and personalized functionality. SAP ERP is built on the NetWeaver technology. SAP
NetWeaver is used as a technology platform for integration and as an application
infrastructure with open connections to Microsoft .NET and IBM WebSphere .

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SAP Business Suite comprises SAP ERP, SAP PLM, SAP CRM, SAP SCM, and SAP SRM.

SAP Business Suite is built on SAP NetWeaver. As you can see from this image, the core
component of the Business Suite is ERP. SAP ERP consists of:
· Life Cycle Data Management
· Quality and Asset Management
· Sales Order Management
· Internet Sales
· Inventory Warehouse Management
· Manufacturing and Transportation
· ClickOrder
Purchase to editProcessing.
Master subtitle style
SAP ERP also supports mobile technologies featuring GPS and GSM-supported service
options for collaborative businesses.
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The slide here shows the solution map. As is the case with other SAP
solutions, a solution map shows you the processes enabled by a specific
solution. In the image shown here, you can see various highlighted areas in
different colors. These areas indicate additional capabilities offered by SAP
ERP as against those already available to SAP R/3. For example, you have
New General Ledger in Financial Accounting, E-Learning, and E-
Recruitment in Work Force Process Management, and Self-Service
Procurement in Procurement.
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An Organizational Unit is a unit used to map an Organizational Structure of an enterprise to
the SAP Application. Familiar terminology like Storage Location, Sales Office, Profit
Center, and Legal Entity are all represented by the team Organizational Unit inside the SAP
Application.

In the image here, the Organizational Unit “CLIENT” is the highest on the order and is used
to represent the complete Enterprise.

Next would be the company code followed by Plant, Sales Organization, Division and
Storage Location. The purpose of this hierarchy or Organizational Unit is to avoid re-
entering data more than is required. For example, specifications or data that is valid for all
organizational units in all R/3 applications can be entered at the CLIENT level, eliminating
the need to enter this information more than once. A client usually represents a company in
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an SAP system.

A company code is an independent legal accounting entity. An example would be a

company within a corporate group. Here company and subsidiary in SAP can be called as
company code. This is required for Financial Accounting.

Similarly, Plant is the central organizational unit for Production Planning and in the context
of Sales and Distribution, the Sales Organization is the central organizational element that
controls the terms of sales to the customer. Division is usually used to represent a product
line.
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In this image, you can see how Organizational Units are used to represent
the Enterprise Structure. At the highest level is the Client. This has two
derivative Company Codes, 1000 and 3000. Company Code 1000 has two
derivation Plants under it, and similarly Company Code 3000 has one plant
and one Controlling area under it.

When you define the organizational units for your enterprise, please bear in
mind how you would like the data to be entered, tracked, and extracted from
the system, as this is a representation of the existing business processes.
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Sales and distribution is organized according to the sales organization,
distribution channel and division. A combination of these three organizational
units forms the sales area. The sales organization is an organizational unit within
logistics that structures the company according to its sales requirements.

A sales organization is responsible for the sale and distribution of goods and
services. The distribution channel represents the channel through which saleable
materials or services reach customers. Typical distribution channels include
wholesale, retail and direct sales. In the SAP ECC System, you can define a
Click tosales
division-specific edit Master subtitle Product
organization. style groups, or divisions, can be defined
for a wide-ranging spectrum of products. In this image, you can see that in sales
organization 1000, products of divisions 02, 03 and 05 are only sold through
distribution channel 10.
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Let us now look at what a Plant is in the Organizational Structure. A Plant is
an organizational unit defined in Material Management which represents a
location where stock of material is kept or manufactured. The assignment of
plants to company code can be n to 1.

This means any number of Plants can be assigned to one Company Code. Here
you can see plants 1000, 1100, 1200, 1300, and 1400 are all assigned to the
company code 1000. Any relevant company-code transaction from one of
these fiveClick
plants is posted
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companystylecode 1000 in Accounting .
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Let us now look at a Purchasing Organization. A purchasing organization is an
organizational unit within logistics, subdividing an enterprise according to the
requirements of Purchasing. This Unit procures materials and services,
negotiates conditions of purchase with vendors, and bears responsibility for such
transactions. Each country in which plants operate has one purchasing
organization.

Hence, you will notice that Purchasing organization 1000 purchases for plants
1000, 1100, 1200, 1300, and 1400, which are located in one country and posts
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all the entries to edit
into Master subtitle
the country’s style code in 1000.
company
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Let us now understand what we mean by Master Data. Any data that has to be used
across several business processes and is consistent for longer periods of time can be
termed as Master Data in the SAP System. Master data is usually created centrally and
is then available across applications and users. For this slide, you will look at the
Customer Master as an example.

A customer master contains information that defines the business relationship between
a company and its customer. The master contains data that is required to execute key
business processes between the customer and the company. Example of such activities
would include customer requests, deliveries, invoices, and payments. The customer
master is organized into three views which are located at different organizational
levels.
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General Data: which does not depend on the company code. This data is entered at the
client level.

Financial Accounting Data: is relevant to Financial Accounting and applies to one

company code.

Sales Data: wherein data for one customer can differ for each sales area. As you have
seen earlier, the sales area is a combination of sales organization, distribution channel
and division. This data is only relevant to Sales and Distribution .
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While Master Data refers to data that remains unchanged for longer periods of time,
transactions are application programs which execute repeating business processes,
referencing the master data, such as creating a customer order, posting an incoming
payment, or approving a leave request.

Any transaction that has been executed in the system creates a document. When these
documents are created, they will automatically copy the referenced predefined data from the
master eliminating the need to enter it again .

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Let us understand the business process flow from purchasing goods to paying for the same. This is typically
termed as the “Purchase to Pay” process flow. We will be referring to two courses, the MM or Material
Management Course and FI or Finance Course.

Order Requirement: The first step in the purchase to pay process is the “Order Requirement”. Order
Requirement can be done manually by registering a requirement using Order Requirement. In the SAP ECC
system, the Order Requirement can also be automatically created. Note that at this stage no postings are created
in the FI course.

Order a Material: Next, in “Purchase order” process you order a material by using a basic form of the
“purchase order” document. While creating a purchase order, data such as supplier, material, plant and any
other data relevant to the purchasing of an organization must be provided. In the SAP ECC system, the
purchaser can control or supervise the processing status of the purchase order. You can post the goods receipt
or invoice receipt for the concerned purchase order. This purchase order creation is handled only in the MM
course. In the SAP ECC system, no document is created in the FI course during purchase order creation.

Good Receipt: Click to edit

Once goods areMaster
receivedsubtitle
after the style
purchase order is processed, the system compares the goods
receipt with purchase order quantity. A goods receipt entry is passed in the MM course. Two documents are
created in real time in the system, one for the material document and the other for the FI document. The
material document is created to update the inventory. In the FI course, values are posted by debiting the
Material stock account or the consumption account and crediting goods receipt or the invoice receipt account.

Invoice Verification: The vendor invoice receipt is then verified during invoice verification. All these
purchasing processes are settled in the SAP ECC system via Logistics. The vendor invoice is posted in MM
and, in real time, an FI document is created, by debiting the goods receipt or invoice receipt account, and
crediting the vendor account.

Payment: The final step is the payment process which is finally updated in Financial accounting, with details
like the payment methods and bank settlement.
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Next, you will understand the “Order to Cash” process flow. A sales order is the basis of the sales
process. Let us understand with the help of two examples: product sale ex-stock and sale of
service.

Product sale ex-stock: In this process, a sales order is created for material which is kept in
inventory. Costs and revenues are derived automatically from the material production costs or
from the SD Course.

From the incoming order, you create the transport order, where in required goods are removed
from the stock and prepared for delivery. Then outbound delivery document is created. The goods
to be delivered are posted as goods issue. At the time of goods issue two documents are created.
One in MM as a goods issue document and another in FI as an accounting document. Billing is
done only after the goods issue is posted. During billing an invoice document is created. Finally
you come toClick to edit
payment andMaster
dunning.subtitle style is received from the customer an entry of
When payment
receipt is posted in FI. If you have not received payments from your customers by the net due date,
the customers will be dunned.

Our second example is for Sale of service: - Here you sell a service. A direct service generation
process can also be displayed via a sales order item. The sales order item is a cost bearer; in this
case, you need to define Goods lnward accounts in order to post the entries in to FI. All the other
steps like incoming orders, billing, payment are almost identical to the steps in sales ex-stock.
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OLAP or Online Analytical Processing is an approach to quickly provide the answer to
analytical queries that are dimensional in nature. It is part of the broader category of
business intelligence. Typical applications of OLAP are in business reporting for sales,
marketing, management reporting, business process management or BPM, budgeting
and forecasting, financial reporting, and other similar areas.

OLTP or Online Transaction Processing is a class of programs that facilitate and

manage transaction-oriented applications, typically for data entry and retrieval
transaction processing. If you are using the transactions in the Logistics applications,
the Logistics Information System (LIS) updates relevant information. You can also
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update information fromMaster
othersubtitle
systemsstyle
in the LIS. The LIS aggregates and stores this
information in the data warehouse.
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This slide discusses some of the most important demands placed on a modern data warehouse.
Decision criteria for the efficiency of a data warehouse solution are highlighted here.

SAP BW enables the analysis of data from operative SAP applications, as well as, all other
business applications and external data sources such as databases, online services, and the
Internet. The transaction-oriented Online Transactional Processing, or OLTP and the analysis-
oriented Online Analytical Processing or OLAP environment must be seen as an integrated
entity.

Master data, and the business processes that result from it, produce a multitude of information
that cannot easily be used for target-oriented analysis. Therefore, data is cleansed first and,
because of the variety of its sources, it is prepared both technically and in terms of content.
KnowledgeClick to edit
can then Master subtitle
be generated from the style
analysis that follows. This knowledge helps the
organization to define its business strategy and supports the business processes derived from it.
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