Introduction to Business Processes and Enterprise Resource Planning

Introduction to Business Processes and Enterprise Resource Planning (ERP) Book: Integrated business processes with ERP systems Author: Simha, Jeffrey

Business Processes Business processes such as procurement and fulfillment processes are cross-functional, meaning no single functional department is responsible for their execution. The Silo Effect (Chapter 1, Page 2) § “Silo Effect” means employees complete tasks in functional silos without knowing the consequences for the other components in the process. § Example: Company X wants to place an order of 100 sedan cars with the fulfillment department of company Y. But, the department “IMMEDIATELY” does not know if the company has enough stock to deliver or the days it will take to deliver the order. Thus, the fulfillment processes loses efficiency in completing an order.

Business Processes in ERP Enterprise Resource Planning (ERP) systems allow functional areas to integrate. This results in immediate process execution without waiting for manual requests. A procurement process using SAP ERP (Chapter 1, Page 7)

Business Processes in ERP Enterprise Resource Planning (ERP) systems allow functional areas to integrate. This results in immediate process execution without waiting for manual requests. A production process using SAP ERP (Chapter 1, Page 8)

Business Processes in ERP Enterprise Resource Planning (ERP) systems allow functional areas to integrate. This results in immediate process execution without waiting for manual requests. A fulfillment process using SAP ERP (Chapter 1, Page 9)

ERP Systems (Chapter 2, Page 25) • ERP systems primarily focus on intra-company processes. • SAP ERP systems have following modules-

Architecture of ERP (Chapter 2, Page 24) • The architecture of an enterprise systems refers to the technical structure of the software (the capabilities) – the ways the users interact with the software (user interface) – the ways the software is physically managed on computer hardware – • Most modern ERP follows a three tier client-server architecture

SAP ERP Client/Server Architecture (Chapter 2, Page 24)

SAP ERP Client/Server Architecture • Presentation Layer Ø The SAP GUI is installed on Individual machines which act as presentation layer.

SAP ERP Client/Server Architecture • Application Layer Ø In this layer business logic is executed. Ø The application layer can be installed on one machine, or it can be distributed among more than one system. • Database Layer Ø The database layer holds the data. SAP supports any relational database. The database layer must be installed on one machine or system. Ø Major databases which are being used in SAP implementations are Oracle, DB 2.

Support for Inter-Company Processes (Chapter 2, Page 27) • ERP systems support processes that take place between and among companies. • SAP ERP comes with application suite to support inter-company processes. • Besides, SAP Net. Weaver supports integration with non-SAP systems.

Data in SAP ERP Systems (Chapter 2, Page 29) • Database is a central component of any ERP systems. The DB stores all information related to all business processes. • There are three types of data in any ERP systems as follows: – – – Organizational data Master data Transaction data

Organization Data (Chapter 2, Page 29, 30, 31) CLIENT COMPANY CODE PLANT Before master data can be created, organizational structure data must be configured following the organization’s structure. Examples: companies, subsidiaries, factories, warehouses, and sales areas.

Master Data: Material master (Chapter 2, Page 31, 32) Master data is the core data that is essential for operations in a specific business or business unit. Example: Buying materials from vendors and selling materials to customers need master data on materials, vendors, and customers.

Transaction Data (Chapter 2, Page 36, 37) Processes are executed at the plant level involving master data, and resulting in transaction data. Transaction data: Dates, quantities, price, payments etc. Transaction documents: Purchase orders, invoices, financial accounting documents etc. sales orders,