sap erp

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2014

SAP ERP
RESOURCE MANAGEMENT SOFTWARE

Dhruv gupta MBEM 1ST YEAR 2/26/2014

RESOURCE MANAGEMENT- SAP ERP

HISTORY OF SAP
SAP (Systems Applications and Products in Data Processing) AG was founded by five former IBM engineers in Mannheim, Baden-Württemberg (Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther) as Systemanalyse und Programmentwicklung (in English, "System Analysis and Program Development") in June 1972. It uses the concept of modules (individual programs that can be purchased, installed, and run separately, but that all extract data from the common database). SAP AG, the company that provides the enterprise resource planning solution has upgraded the package and launched it as SAP ERP Central Component (ECC). The purpose of positioning it as ECC is to enable SAP to build and develop an environment of other products that can function upon the foundation of the central component. SAP's ERP solution includes several modules that support key functional areas, including: • SAP Enhancement Packages • Logistics Consulting • SAP Business One • SAP Business Suite - Foundation Topics • Home (End-User Experience Monitoring) • SAP Supplier Relationship Management (SRM) • SAP Enterprise Performance Management (EPM) • SAP Customer Relationship Management (CRM) • SAP Product Lifecycle Management (PLM) • SAP ERP 6.0 Upgrade (ERP Upgrade) • SAP Test Data Migration Server • SAP Human Capital Management (HCM) • SAP Supply Chain Management (SCM) • SAP Financials (ERP Financials) • SAP Cost controlling and Profitability Analysis (ERP COPA) • SAP Mobile (Mobile) • SAP Supply Chain Management (ERP SCM)

RESOURCE MANAGEMENT- SAP ERP SAP system comprises of a number of fully integrated modules, which covers virtually every aspect of the business.

DEVELOPMENT
SAP R/3 through version 4.6c consisted of various applications on top of SAP Basis, SAP's set of middleware programs and tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the SAP Web Application Server. Extension sets were used to deliver new features and keep the core as stable as possible. The Web Application Server contained all the capabilities of SAP Basis. As a result of marketing changes and changes in the industry, other versions of SAP have been released that address these changes. The first edition of mySAP ERP was launched in 2003 and bundled previously separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM) and extension sets. The SAP Web Application Server was wrapped into NetWeaver, which was also introduced in 2003. A complete architecture change took place with the introduction of mySAP ERP edition 2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC). The SAP Business Warehouse, SAP Strategic Enterprise Management and Internet Transaction Server were also merged into SAP ECC, allowing users to run them under one instance. Architectural changes were also made to support an enterprise services architecture to transition customers to a services-oriented architecture. SAP HANA which is a combination of In-memory software and hardware can improve data processing at extremely high speeds.

IMPLEMENTATION
SAP ERP consists of several modules including: utilities for marketing and sales, field service, product design and development, production and inventory control, human resources, finance and accounting. SAP ERP collects and combines data from the separate modules to provide the company or organization with enterprise resource planning.

RESOURCE MANAGEMENT- SAP ERP Although there can be major benefits for customers of SAP ERP, the implementation and training costs are expensive. Many companies experience problems when implementing SAP ERP software, such as: failing to specify their operation objectives, absence of a strong commitment or positive approach to change, failing to deal with organizational differences, failing to plan the change to SAP ERP properly, inadequate testing. All these factors can mean the difference between having a successful implementation of SAP ERP or an unsuccessful one. If SAP ERP is implemented correctly an enterprise can go from its old calculations system to a fully integrated software package. Potential benefits include: efficient business process, inventory reduction, and lead time reduction. IEEE scholar journal reports an industrial case in which the senior management successfully dealt with a troubled SAP R/3 implementation in an international fast moving consumer goods (FMCG) company during 2001 and 2002.

DEPLOYMENT AND MAINTENANCE COSTS
SAP ERP systems effectively implemented can have cost benefits. Integration is the key in this process. "Generally, a company's level of data integration is highest when the company uses one vendor to supply all of its modules." An out-of-box software package has some level of integration but it depends on the expertise of the company to install the system and how the package allows the users to integrate the different modules. It is estimated that "for a Fortune 500 company, software, hardware, and consulting costs can easily exceed $100 million (around $50 million to $500 million). Large companies can also spend $50 million to $100 million on upgrades. Full implementation of all modules can take years," which also adds to the end price. Midsized companies (fewer than 1,000 employees) are more likely to spend around $10 million to $20 million at most, and small companies are not likely to have the need for a fully integrated SAP ERP system unless they have the likelihood of becoming midsized and then the same data applies as would a midsized company. Independent studies have shown that deployment and maintenance costs of a SAP solution can greatly vary depending on the organization. For example, some point out that because of the rigid model imposed by SAP tools, a lot of customization code to adapt to the business process may have to be developed and maintained. Some others pointed out that a return on investment could only be obtained when there was both a sufficient number of users and sufficient frequency of use. Deploying SAP itself can also involve a lot of time and resources.

MAIN FUNCTIONALITY
CRM, Business Intelligence, Accounting, Human Resources, Inventory Management, Manufacturing, Project Management, Supply Chain Management, and Procurement Features Platforms The application can bee use on various platforms Windows

RESOURCE MANAGEMENT- SAP ERP     Mac os x Linux Web based mobile

Industries It is used in a variety of industries        accounting aerospace banking chemical construction defence education and engineering financial services

PRODUCT COMARISON

RESOURCE MANAGEMENT- SAP ERP

FEATURES
Create reports and keep them in a centralized dashboard, to help keep track of a variety of performance indicators. • Keep the finances in check with the accounting features included in SAP • Use the HR features to help with the employees. • Keep track of the ins and outs of the inventory. • Use the manufacturing features to help control the production process. • Take control of the projects and make sure they are finished on time and on budget. • Use the included procurement capabilities to make the whole process faster and more efficient. • Manage entire supply chain with the features included in SAP.

ADVANTAGES
Market share leadership—SAP is marquee brand that is arguably the ERP software market share leader.

DISADVANTAGES
Complex pricing—SAP pricing is unnecessarily complex and lacks transparency which facilitates sales gamesmanship. Further, new SAP software maintenance models have been very controversial with the customer base Lack of innovation—Many would argue that the last market winning innovation delivered by SAP was with the release of SAP R/3, the company’s first client/server technology solution, in 1992 Deployment risk—Continuing one of the prior points a step further, ERP buyers must recognize SAP ERP software is broad, deep and complex, thereby rendering the conditions for a perfect storm and a very challenging and costly deployment MDM—SAP’s Master Data Management (MDM) strategy still lacks clarity

Corporate viability—With over 65,00 employees, 232,000 customers, €16,22 billion in revenues and an impressive four decade history Software scope—The application breadth of SAP ERP, and even wider scope when considered within the SAP Business Suite, provides a central and enterprise-wide system

A global solution—SAP supports global functionality with 45 standard country versions

RESOURCE MANAGEMENT- SAP ERP and eight add-on country editions More analytics—HANA is a highly touted inmemory columnar database that uses low cost main memory (RAM), scalable multi-core processors and fast data access from solid-state drives (instead of to traditional hard drives) for accelerated data processing and improved business intelligence delivery Enterprise Tools—Enterprise grade tools such as SAP PLM (Product Lifecycle Management, an information center for developers with document and code management and collaborative engineering) with supporting technologies such as NetWeaver empower IT shops with the needed tools to aid manageability of complex business systems Community—Despite a lack of transparency with regard to ERP software pricing, the company has developed a very collaborative customer and partner portal called the SAP Community Network

User Experience—The application is intuitive and usability is straight-forward, but the User Experience (UX) lacks when compared to more modern user interfaces which take advantage of rich presentations, social paradigms and consumer technologies High exit barriers—There are very high barriers to switching ERP solutions. SaaS and cloud ERP solutions are dramatically reducing exit barriers for ERP software customers. Unfortunately, as SAP ERP software is not available in a SaaS delivery model, the prospect to change your ERP solution is extremely limited Very high TCO—It’s no secret that SAP comes with a very high Total Cost of Ownership (TCO), consisting of high acquisition costs, very high deployment costs, reasonably priced but recurring maintenance costs and very high internal support costs

SWOT ANALYSIS
STRENGTHS • • • • • • • Applicable for all types of business Any modification can be done to the extent of business requirement. Wide range of services from SAP-AG & their consultants Greater market share & greater acceptability Established world wide. Capable of operating in all most all business languages Connectivity to internet & intranet

WEAKNESS • • Lower market usage in some business areas like banking, retail, investment etc. High implementation cost

RESOURCE MANAGEMENT- SAP ERP • Long implementation time

OPPURTUNITIES • • SAP introduced ERP for SMEs which will open up new business in Small & Medium Scale Enterprises. ASAP (Accelerated SAP) reduces the implementation time, opens up more business

THREATS • • • • Economic crisis world wide High competition from rivals like Oracle… Some business develop it’s own ERP packages becomes a threat to SAP’s implementation there. Organizational resistance to change for SAP implementation in some organization.

CASE STUDY
HINDUSTAN CONSTRUCTION COMPANY Industry- engineering, construction and operations Revenue- Rs 31,000 million Employees- 3000 Headquarters- Mumbai, India Website- www.hccindia.com HCC is an 80 year old organization with a track record in executing complex infrastructure projects across various sectors. With a growing need for quantity- based budgeting, HCC developed an estimation and budgeting tool based on SAP ERP application to suit the requirements

RESOURCE MANAGEMENT- SAP ERP

MARKET COMPARISON
SAP • • • Largest share of the market Highest short-listing rate Lowest selection rate when short-listed

RESOURCE MANAGEMENT- SAP ERP • Oracle • • Longest implementation duration Largest delta between planned and actual implementation duration Lowest percent of users who realized between 81- and 100percent of benefits Longest payback period



Microsoft Dynamics • • • Smallest share of the market Lowest short-listing rate Shortest implementation duration

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