Introduction to SAP

1
Introduction to SAP

• Adapted from SAP University Alliance curriculum
  support material prepared by Professor E.
  Summers, UT-Austin

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What is SAP America, Inc.?

• The predecessor company was started in
  Mannheim, Germany, in 1972. SAP now operates all
  over the world, and in America as SAP America,
  Inc. Their Web page (www.sap.com) contains
  detailed information on the company and its
  products.

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What is SAP America, Inc.?

• SAP has supplied business application software
  to over 7,000 companies in 40 countries. Its
  1996 sales in the U.S. were 2.39 billion.
• SAP supports its software products with extensive
  training and implementation assistance programs.
• SAP employs over 9,000 persons worldwide.

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What is SAP R/3?

• SAP R/3 is an enterprise-wide, integrated,
  relational-data-base, client-server information
  system.
• SAP R/3 is said to be the largest-selling
  software of its type in its target large-firm
  market.
• SAPs wide acceptance makes it an ideal product
  with which to illustrate accounting system
  features.

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Warning

• SAP R/3 is an outstanding software package.
  Its broad range of capabilities mandate
  extensive, in-depth training for serious users.
  In this respect, R/3 differs from software that
  can be learned intuitively mastering it requires
  a sustained, supervised effort. This
  introduction and the modules which follow will
  help you understand R/3, but cannot substitute
  for in-depth training.

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1. Logging on to SAP R/3 The SAP R/3 Menu
Structure
Title Bar
Help
Menu Bar
Status bar
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2. Design Philosophy

• Highly integrated, platform-independent
• Technical Features
• Four Main Accounting-related Processes (sales and
  distribution, materials management, production
  planning, and accounting

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2. Design Philosophy Overall

• SAP R/3 Modules exchange data with each other and
  with non-SAP R/3 applications
• Modules cover all enterprise information needs
  comprehensively
• SAP R/3 can be customized using built-in options,
  and can be user-modified to include new
  capabilities
• Customization allows SAP R/3 to reflect virtually
  any organizations structure.

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2. Design Philosophy Technical

• Client/Server- the desktop computer is the client
  which requests a service and, through the network
  linking the two, the server computer provides the
  requested service.
• The TCP/IP network protocol manages communication
  between the computers.

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2. Design Philosophy Technical

• In SAP R/3, integrated software functionality is
  portable across different hardware platforms.
• Processing of tasks can be distributed across the
  SAP R/3 client/server environment.

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2. Design Philosophy Technical

• SAP R/3 application modules remain the same in
  all installations.
• SAP R/3 Basis system allows the applications to
  run on different platforms and provides the
  stable runtime architectural framework.
• The Basis system also provides the interfaces
  between SAP and non-SAP products.

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2. Design Philosophy Four Accounting-Related
Processes

• Sales and Distribution (SD)
• (Under Logistics option on main menu)
• Materials Management (MM)
• (Under Logistics option on main menu)
• Production Planning (PP)
• (Under Logistics option on main menu)
• Accounting (AC)
• (Under Accounting option on main menu)

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2. Design Philosophy Four Main Processes

• These four processes operate in real time to
  capture process and transaction data and reflect
  it instantly in the general ledger account
  balances.
• The processes support customizable forms to
  record and edit data, and reports to summarize
  information for managers, clients, and suppliers.

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2. Design Philosophy Sales and Distribution
(SD)

• Pre-Sales Support
• Inquiry Processing
• Quotation Processing
• Sales Order Processing
• Delivery Processing
• Billing

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2. Design Philosophy Materials Management
(MM)

• Material Procurement (Purchasing)
• Inventory Management
• Reorder Point Processing
• Invoice Verification
• Material Valuation
• Vendor Evaluation
• External Services Management

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2. Design Philosophy Production Planning (PP)

• Bill of Material
• Routings
• Work Centers
• Sales and Operations Planning
• Master Production Scheduling
• Material Requirements Planning
• Shop Floor Control
• ltcontinued on next slide)

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2. Design Philosophy Production Planning (PP)

• Production Orders
• Product Costing, Activity-based Costing
• Repetitive Manufacturing
• Kanban
• Production Planning for Process Industries

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2. Design Philosophy Accounting (AC)

• Financial Accounting- accounting management and
  external reporting
• Controlling- flow-of-cost-and-revenue tool for
  organization decisions
• Fixed Asset Management
• Project System- plan control long-term,
  highly-complex projects with defined goals

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3. Accounting Capabilities of SAP R/3

• We will consider SAP R/3 capabilities in the
  following areas
• Financial Accounting
• Controlling
• Accounting-Related Reports

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3. Accounting Capabilities of SAP R/3 Financial
Accounting

• General Ledger
• Accounts Payable
• Accounts Receivable
• Treasury
• Special Purpose Ledger
• Legal Consolidation
• Reporting

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3. Accounting Capabilities of SAP R/3 Controlling

• Cost Center Accounting
• Job Order Accounting
• Project Accounting
• Product Cost Analysis
• Profitability Analysis
• Profit Center Accounting
• Activity Based Costing
• Enterprise Controlling

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4. Executive Implications

• Information Management Becomes the Deciding
  Competitive Factor
• Enterprise-Wide Information-Based Span of Control
• Rapid Adaptation of Information System through
  Component Software

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4. Executive Implications

• Information Management Becomes the Deciding
  Competitive Factor
• All other things being equal, managers able
  to organize and analyze the information they have
  will plan, act, and control better than those
  without these capabilities.

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4. Executive Implications

• Information Management Becomes the Deciding
  Competitive Factor
• SAP R/3 (and perhaps other similar products)
  does provide superior information management
  capabilities. It is the responsibility of
  management, however, to use them.

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4. Executive Implications

• Information Management Becomes the Deciding
  Competitive Factor
• Accountants - information specialists who work
  constantly with line managers - should help them
  attain the competitive advantages of modern
  information management.

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4. Executive Implications

• Enterprise-Wide Information-Based Span of Control
• SAP R/3 (and perhaps similar products) allows a
  broad span of control based on access to the
  information required to exercise control.

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4. Executive Implications

• Enterprise-Wide Information-Based Span of Control
• SAP R/3 provides a structure for
  performance-based reporting that conforms to the
  distribution of decision rights in any
  organization.

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4. Executive Implications

• Enterprise-Wide Information-Based Span of Control
• Of course, to benefit from performance
  reporting, management must configure SAP R/3 and
  make diligent use of its planning, budgeting,
  recording, and reporting features.

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4. Executive Implications

• Enterprise-Wide Information-Based Span of Control
• Accountants, who understand the benefits of
  proper management controls, should encourage line
  managers to use the enterprise-wide control
  capabilities of SAP R/3.

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4. Executive Implications

• Rapid Adaptation of Information System through
  Component Software
• SAP R/3s modular structure allows components
  to be replaced, reconfigured, or modified to
  reflect the current needs of line managers.

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4. Executive Implications

• Rapid Adaptation of Information System through
  Component Software
• This stands in sharp contrast to legacy
  systems in which even small changes require
  extensive reprogramming and acceptance testing.

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4. Executive Implications

• Rapid Adaptation of Information System through
  Component Software
• Accountants should work with line management
  to identify changes that should be made, and with
  the MIS managers to ensure that change meet
  management requirements.