Benefits of SAP ERP:
Eliminates Information Silos: Standardizes data across the entire company or
multiple companies.
Automation: Automates core business processes, such as automatic ordering of parts
when inventory is low.
Better Decision Making: Provides real-time reports for in-depth data analysis, aiding
in collaboration and problem-solving.
Robust Security and Compliance: Ensures appropriate access to sensitive
information and compliance with company policies and government regulations.
AI Innovations: Incorporates new AI functionalities to improve efficiency and
decision-making.
Limitations of SAP ERP:
High Total Cost of Ownership (TCO): Expensive to implement and maintain.
Lengthy Implementation: Can take years to fully implement across an organization
due to high configurability.
Steep Learning Curve: Challenging for end users initially, requiring proper training
and proactive change management.
SAP implementations and customizations
Project Preparation: Define the cost and scope, ensure a skilled team, study current
systems, and map requirements.
Realization: Configure SAP to match business processes and perform customizations
if needed.
Testing: Conduct unit testing, integration testing, user acceptance testing, and
performance testing.
Final Preparation: Upload master data, set up security roles, and train end users.
Go-live: Switch from old systems to SAP, referred to as cutover activities.
Post Go-live Support: Address any issues and develop non-critical customizations.
SAP ERP modules
Types of Modules: SAP ERP is divided into technical and functional modules.
Technical modules handle the infrastructure and ensure the system runs correctly,
while functional modules support business processes and transactions.
Integration: Functional modules in SAP are highly integrated, allowing efficient
information exchange between them.
Common Functional Modules:
Accounting Modules:
SAP Financial Accounting (FI): Includes general ledger, accounts payable, and
accounts receivable.
SAP Controlling (CO): Manages profit center and cost center accounting.
SAP Project System (PS): Handles project planning, monitoring, and costing.
Logistics Modules:
SAP Sales and Distribution (SD): Manages sales order processing and shipping.
SAP Materials Management (MM): Covers purchasing, inventory management, and
valuation.
SAP Production Planning (PP): Includes production order processing and materials
requirement planning.
SAP Quality Management (QM): Manages incoming, in-process, and final
inspections.
SAP Plant Maintenance (PM): Handles breakdown, predictive, and preventive
maintenance.
Human Resources Module:
SAP Human Capital Management (HCM): Manages the entire employee lifecycle
from hiring to termination.
Industry-Specific Modules: SAP also offers industry-specific modules, such as IS-A for
the automotive industry and IS-U for utilities. Financial services modules like FS-CM
(claims management) and FS-ICM (incentive and commission management) are also
available.
Master data vs transactional data
Master Data:
Definition: Refers to information about people, places, or objects in the
system.
Characteristics:
Forms the foundation of SAP databases.
Relatively static and does not change frequently.
Essential for transactions to occur.
Examples:
Business partner records (suppliers and customers).
Employee master data (name, social security number).
Transactional Data:
Definition: Records the actions of a business.
Characteristics:
Represents the bulk of day-to-day transactions.
Constantly changing and dynamic.
Depends on accurate master data for effectiveness.
Examples:
Purchase orders.
Sales orders.
Changes in an employee's work schedule.
Key Point: Both types of data are crucial for an effective SAP system. Accurate
master data is necessary for precise transactional data, and without it, transactions
cannot be correctly recorded.
SAP client
Definition of Clients: In SAP, a client is a self-contained business unit within the
SAP system. Each client is assigned a unique three-digit number.
Types of Clients:
Production Client: The main system of record for a business where end users
typically log in.
Quality Assurance Client: Used by system developers to test customizations and
development changes to ensure compatibility with other parts of the system.
Sandbox Client: A space for experimenting with new changes or customizations
before they are moved into production.
Training Client: Used for end-user training, allowing users to experiment freely
without impacting the production client.
Non-Production Clients: The quality assurance, sandbox, and training clients are
collectively referred to as non-production clients.
Client Setup in Large Companies:
Large organizations may set up different clients based on business units or geographic
areas.
Example: A company named Widgets R Us has separate clients for its widget
manufacturing and widget consulting services business units.
o Widget Manufacturing: Client 100 (production), Client 101 (training),
Client 102 (quality), Client 104 (sandbox).
o Consulting Services: Client 110 (production), Client 111 (training).
The larger the organization, the more complex the client structure can become.
Understanding SAP security roles
Customizable Security Roles:
SAP allows for customizable security roles to control user access within the system.
User Profiles and Security Roles:
When a user profile is created, it is mapped to a specific security role.
The security role determines the transactions and organizational levels a user can
access.
Access Control:
Security roles either allow or deny access to different transactions and organizational
levels.
Organizational levels include elements like company code, plant, or sales
organization.
Segregation of Duties:
Security roles ensure segregation of duties across the business.
They ensure that only the right people perform the right transactions in the right areas
of the system.
Example Scenario:
A shop floor manager with the role "manufacturing manager California" can:
Approve time off for direct reports.
Create purchase orders for the California plant.
The same manager cannot:
Approve time off for a coworker in the accounting department.
Create purchase orders for a plant in Toronto.
This is because her security role does not grant access to those areas.
Purpose of Security Roles:
Ensure users have only the access they need to perform their job effectively.
Prevent unauthorized access to sensitive information or functions.
SAP Financial Accounting (FI)
SAP FI Module:
Tracks and reports financial data across an organization.
Contains nearly every financial business process.
Widely implemented by companies using SAP.
Universal Journal:
Integrates Financial Accounting and Managerial Accounting into a single data model.
Permanently reconciles all components of Financial and Managerial Accounting.
Ensures a single source of financial truth.
Includes General Ledger, Asset Accounting, Controlling, Material Ledger, and
Profitability Analysis.
General Ledger (GL):
Central to all transactions in SAP FI.
Includes all financial transaction data in a chart of accounts.
Transactions recorded in sub-modules are reconciled with the GL in real-time.
Sub-modules of SAP FI:
Accounts Payable (AP):
o Houses supplier-related data.
o Capabilities include invoice and credit memo posting, invoice payments, automatic
payment programs, and supplier reporting.
Accounts Receivable (AR):
o Manages customer data.
o Transactions include invoice creation, invoice posting, payments, and customer-
based reporting.
Asset Accounting:
Deals with a company's fixed assets (e.g., warehouses, land, vehicles, computer
hardware/software).
Functions include recording acquisition, depreciation, sales, and retirement of fixed
assets.
Bank Management:
Manages all company bank account transactions.
Reconciles transactions recorded on bank statements with those in the system to
ensure balance.
Integration and Real-time Updates:
All sub-modules are integrated.
Transactions are updated in real-time.
Allows for accurate financial statements to be pulled at any time.
SAP Controlling (CO)
SAP Controlling Module (CO): Part of the finance line of business, it deals with
planning and monitoring business operation costs and has powerful reporting
functions to show where money is being spent, increasing profitability.
Primary Sub-Modules:
Profit Center Accounting: Evaluates profit or loss of independent areas
within a company. Example: Profit Center 1011 (Widget Sales).
Cost Center Accounting: Manages costs associated with internal departments
like sales or HR, focusing only on expenses. Example: Cost Center 100105
(Accounting).
Internal Orders: Manages costs for small internal projects, allowing for in-
depth analysis of short-term projects or one-time expenses. Example: Internal
Order for a Las Vegas trade show.
Product Costing: Analyzes costs required to produce goods and services,
aiding in decisions on manufacturing vs. buying. Example: Material cost
estimate for blue widgets size 2.
Profitability Analysis: Measures profitability of products or services, helping
make pricing decisions based on geographic region, distribution channels, or
customer profitability.
SAP Sales and Distribution (SD)
SAP Sales and Distribution (SD) Module:
Backbone of selling and transportation of products and
services.
Manages customer- and product-related data for sales
ordering, shipping, billing, and invoicing.
Sales Cycle Breakdown:
1. Pre-Sales Actions:
Inquiries and quotations are created.
Example: Quotation for Seattle Retailers,
$2,500 for 50 small steel plates.
2. Sales:
Sales orders or contracts and scheduling
agreements are created.
Example: Sales order for Seattle Retailers,
$2,500 for 50 large steel plates.
3. Distribution:
Delivery documents are created, goods are
picked, packed, and shipped.
Example: Outbound delivery document with
loading and delivery dates.
4. Billing and Returns:
Billing documents and invoices are created,
return orders if necessary.
Example: Invoice for Georgia Distribution,
$360.
Integration with Other Modules:
Materials Management (MM): Product availability
check during sales order creation.
Finance (FI): Credit check for customer reliability.
EXPORTING REPORTS
Exporting Reports to Excel:
1. Enter the List Of Sales Orders report using transaction code va05.
2. Execute the report without entering any selection criteria.
3. Navigate to More > List > Export > Spreadsheet.
4. Choose the default format: Excel - Open Office XML Format.
5. Name the export (e.g., "Sales Order Report") and click Save.
6. Excel will open automatically with the exported report, allowing you to manipulate
the data using Excel's functionality.