Enterprise Resource Planning and SAP System Software – A Summary Table Of Contents 1. What is ERP 2. SAP R/3 Functionality 2.1 Logistics 2.2 Accounting 2.3 Human Resources (HR) 2.4 Cross-Application Functions 3. New Dimension Products 4. SAP R/3 Architecture 5. mySAP.com and the Internet 6. SAP R/3 Custom Configuration & Implementation 7. SAP Implementation Strategy 7.1 ASAP Methodology 7.2 The R/3 Procedural Model 1. What is ERP? Many key business applications are now implemented using comprehensive and complex Enterprise Resource Planning (ERP) software. ERP software facilitates the flow of information among all the processes of an organization’s supply chain, from purchases to sales, including accounting and human resources. Process thinking is a key element in this business restructuring, differing from previous approaches with traditional application "silos", where departments within a company operated with poor interaction with other departments. ERP software eliminates the comm

Enterprise Resource Planning and SAP System Software – A Summary Table Of Contents 1. What is ERP 2. SAP R/3 Functionality 2.1 Logistics 2.2 Accounting 2.3 Human Resources (HR) 2.4 Cross-Application Functions 3. New Dimension Products 4. SAP R/3 Architecture 5. mySAP.com and the Internet 6. SAP R/3 Custom Configuration & Implementation 7. SAP Implementation Strategy 7.1 ASAP Methodology 7.2 The R/3 Procedural Model 1. What is ERP? Many key business applications are now implemented using comprehensive and compl ex Enterprise Resource Planning (ERP) software. ERP software facilitates the flo w of information among all the processes of an organization’s supply chain, from p urchases to sales, including accounting and human resources. Process thinking is a key element in this business restructuring, differing from previous approache s with traditional application "silos", where departments within a company opera ted with poor interaction with other departments. ERP software eliminates the co mmon problem of multiple incompatible software systems and databases in use in t he departments or functional areas of many corporations. With one integrated com prehensive system (which could be distributed internationally) with one database , processes run more smoothly with up to date information availability throughou t the corporation. It is important for students to gain an understanding of the impact of ERP solut ions in business today. Every business area is affected; implementing ERP system s in a corporation is a complex undertaking and has been likened to the effort r equired in merging two companies together. ERP products are available from several vendors, including SAP AG, PeopleSoft, J .D. Edwards and Oracle. The ERP software market leader is SAP AG with the SAP R/ 3 System. There is great demand in industry for people that are knowledgeable about ERP an d specifically about SAP R/3 System. The following sections present an introduct ion to SAP R/3 and other SAP products that work together with R/3 or may be sepa rate products. 2. SAP R/3 Functionality R/3 software allows the integration of all of a company’s business operations in a n overall system for planning, controlling and monitoring. Over 1000 ready-made business processes are available, that include best business practices that refl ect the experiences, suggestions and requirements of leading companies in a host of industries. New features are continuously being added to releases of R/3. SAP R/3 System provides an integrated suite of business applications that covers a full range of processes used in almost any business. The main application gro upings are: • Logistics • Financial/Management Accounting and Reporting • Human Resources • Cross-Application Functions The following sub-sections list the main applications and some of their componen ts. 2.1 Logistics • Logistics General (LO) Logistics General integrates the manufacturing and distribution functions for Sa les and Distribution, Production Planning, Materials Management, Plant Maintenan ce and Quality Management. The following components are included: o Logistics Information System (LO-LIS)

o Master Data (LO-MD) o Forecast (LO-PR) o Variant Configuration (LO-VD) o Engineering Change Management (LO-ECH) • Materials Management (MM) A material can also be a person or a service. The MM application supports manufa cturing, distribution and service industries: o Material Requirements Planning (MM-MRP) o Purchasing (MM-PUR) o Inventory Management (MM-IM) o Warehouse Management (MM-WM) o Invoice Verification (MM-IV) o Information System (MM-IS) o Electronic Data Interchange (MM-EDI) • Sales & Distribution (SD) This includes sales, shipping, and billing. It actively supports sales and distr ibution activities with functions for pricing, prompt order processing, and on-t ime delivery, interactive multilevel variant configuration, and a direct interfa ce to Profitability Analysis and Production. o Master Data (SD-MD) o Basic Functions (SD-GF) o Sales (SD-SLS) o Shipping (SD-SHP) o Billing (SD-BIL) o Sales Support (SD-CAS) o Information System (SD-IS) o Electronic Data Interchange (SD-EDI) • Production Planning (PP) This involves the planning and control of manufacturing activities, including ma ke-to-order or repetitive manufacturing. o Basic Data (PP-BD) o Sales and Operations Planning (PP-SOP) o Master Planning (PP-MP) o Capacity Requirements Planning (PP-CRP) o Material Requirements Planning (PP-MRP) o Production Orders (PP-SFC) o Product Costing (PP-PC) (which is also CO-PC Product Costing) o Kanban/Just-in-Time Production (PP-KAB) o Repetitive Manufacturing (PP-REM) o Assembly Orders (PP-ATO) o Production Planning for Process Industries (PP-PI) o Plant Data Collection (PP-PDC) o Information System (PP-IS) • Quality Management (QM) This module provides quality planning, inspections, certificates, notification. It monitors, captures, and manages all processes relevant to quality assurance a long the entire supply chain, coordinates inspection processing, initiates corre ctive measures, and integrates laboratory information systems. o Planing Tools (QM-PT) o Inspection Processing (QM-IM) o Quality Control (QM-QC) o Quality Certificates (QM-CA o Quality Notifications (QM-QN) • Plant Maintenance (PM) The Plant Maintenance module provides planning, control, and processing of sched uled maintenance, inspection, damage-related maintenance, and service management to ensure availability of operational systems, including plants and equipment d elivered to customers. o Equipment and Technical Objects (PM-EQM) o Preventive Maintenance (PM-PRM)

o Maintenance Order Management (PM-WOC) o Maintenance Projects (PM-PRO) o Service Management (PM-SMA) o Plant Maintenance Information System (PM-IS) 2.2 Accounting • Financial Accounting (FI) This application enables the company to publish legally required financial docum ents, and includes the following modules: o General Ledger (FI-GL) o Accounts Receivable (FI-AR) o Accounts Payable (FI-AP) o Legal Consolidation (FI-LC) o Special Purpose Ledger (FI-SL) • Controlling (CO) The following modules are integrated with FI and are used to better control a bu siness: o Overhead Cost Control (CO-OM) o Product Costing (CO-PC) o Activity-Based Costing (CO-ABC) o Sales and Profitability Analysis (CO-PA) o Project Control (CO-PRO) • Enterprise Controlling (EC) o Executive Information System (EC-EIS) o Business Planning (EC-BP) o Management Consolidation (EC-MC) o Profit Center Accounting (EC-PCA) • Treasury (TR) The Financial Accounting module provides treasury functions, but the following a re more specialized: o Treasury Management (TR-TM) o Funds Management (TR-FM) o Cash Management (TR-CM) o Market Risk Analyzer (TR-MRM) • Capital Investment Management (IM) o Tangible Fixed Assets (IM-FA) o Financial Investments (IM-FI) • Project System (PS) This module accommodates all types of research and development projects. It coor dinates and controls all phases of a project, in direct cooperation with Purchas ing and Controlling, from quotation to design and approval, to resource manageme nt and cost settlement. o Basic Data (PS-BD) o Operational Structures (PS-OS) o Project Planing (PS-PLN) o Approval (PS-APP) o Project Execution/Integration (PS-EXE) o Information System (PS-IS) 2.3 Human Resources (HR) The Human Resources module includes administration, payroll accounting, shift ma nagement, employee attendance, trip costs, training, and recruitment. It provide s solutions for planning and managing the company’s human resources, using integra ted applications that cover all personnel management tasks and help simplify and speed the processes. • Personal Planning and Development (HR-PD) o Organizational Management (PD-OM) o Seminar and Convention Management (PD-SCM) o Personnel Development (PD-PD) o Workforce Planning (PD-WFP) o Room Reservations Planning (PD-RPL)

• Personnel Administration (HR-PA) o Employee Management (PA-EMP) o Benefits (PA-BEN) o Compensation Administration (PA-COM) o Applicant Management (PA-APP) o Time Management (PA-TIM) o Incentive Wages (PA-INW) o Travel Expenses (PA-TRV) o Payroll (PA-PAY) 2.4 Cross-Application Functions • Business Workflow (WF) The Business Workflow module contains functions that can be used in all applicat ion components, linking the integrated application modules with cross-applicatio n technologies, tools and services. A typical example of a business process that can be actively controlled using SAP Business Workflow is the complete processi ng of a customer order from its receipt through delivery of the goods and issuin g the invoice. You can automate all the steps in this business process and defin e all the roles of the appropriate employees. You can check a customer’s credit li ne and creditworthiness, query the stock on hand, and automatically place an ord er. Clerical staff can process the individual work items in a working environmen t familiar to them, request information on the current status of specific workfl ows at any time, and trace the history of the work process. All these functions can also be accessed through the Internet. • SAPoffice This provides electronic mail messaging for users and also by SAP applications. • Business Warehouse (BW) The Business Warehouse provides management reporting, including non-SAP data sou rces into reports. This independent data warehouse solution summarizes data from R/3 applications and external sources to provide executive information for supp orting decision making and planning. Reports cover a wide range of information r equirements, automated data staging, and standard R/3 business process models. • Industry Solutions (IS) Industry Solutions combine the R/3 application modules and additional Industry s pecific functionality. The following are some of the industries for which module s have been developed: o Aerospace & Defense o Automotive o Banking o Chemicals o Consumer Products o Engineering & Construction o Healthcare o High Tech & Electronics o Higher Education & Research o Insurance o Media o Mill Products o ining o Oil & Gas o Pharmaceuticals o Project Oriented Manufacturing o Public Sector o Retail o Service Provider o Telecommunications o Utilities • International Development (INT) Users in different countries have different needs regarding currency, legal requ irements, and commercial practice. The components for different regions are: o Asian and Pacific Area (IN-APA)

o Europe (IN-EUR) o North America (IN-NAM) o Africa/Middle East (IN-AFM) o South America (IN-SAM) 3. New Dimension Products New Dimension Products can stand alone or be integrated with R/3. Some component s are included in the above R/3 list; the following are components of New Dimens ion Products: . • Supply Chain Management (SCM) SAP Advanced Planner and Optimizer (APO) is a tool for planning, optimizing, and scheduling software applications that enable the integration and synchronizatio n of the supply chain on a global scale, from suppliers, agents, and production planners, to purchasers, customers and consumers. • Business Information Warehouse This has been mentioned above. • Business-to-Business Procurement This enables inter-enterprise procurement, including the creation and maintenanc e of requisitions, purchase orders and reservations with or without electronic c atalogs, approval and rejection, desktop receiving and service entry, status and tracking, invoicing, and performance reporting functions. All end users are abl e to purchase goods and services straight from their workplace. • Corporate Finance Management (CFM) This is a comprehensive package for managing financial resources, and analyzing and optimizing business processes in the finance area of a company. • Customer Relationship Management (CRM) CRM provides a solution that enables companies to effectively manage customer re lationships throughout the entire lifecycle, understanding as well as anticipati ng the needs of customers and prospects. • Knowledge Warehouse This is the cornerstone of SAP’s Knowledge Management solution for continuous know ledge transfer and life-long learning. It contains a repository for storing cont ent and includes the tools to create, modify, distribute, and administer that co ntent. The SAP HR components Personnel Development (PD) and Training and Event M anagement (TEM) provide functionality together with the Knowledge Warehouse. The Knowledge Warehouse provides unstructured information; the Business Information Warehouse provides structured data. • Strategic Enterprise Management ( SEM) SEM includes the following components: o Business Consolidation (BCS) provides functionality for financial consol idation and value-based accounting. o Business Planning and Simulation (BPS) provides functionality to support integrated strategic and operational business planning. These functions include the creation of dynamic and linear business models, simulation of various scena rios, evaluation of these scenarios taking account of the business risks, resour ce allocation as part of business planning, and rolling forecasting. o Corporate Performance Monitor (CPM) provides support for the definition, analysis, visualization, and interpretation of key performance indicators. o Business Information Collection (BIC) provides functionality for automat ed and semi-automated collection of structured and – especially – unstructured busin ess information from internal and external sources. This includes an automatic s earch for relevant business information in the Internet, and the structuring of any information found. o Stakeholder Relationship Management (SRM) provides functionality to supp ort the stakeholder communication process: the stakeholders are informed regular ly and systematically about the business strategy and its effects on their stake holder value. In addition, the component helps to collect feedback from stakehol ders in a structured manner, and then to pass this on to the other components (S EM-CPM and SEM-BPS). 4. SAP R/3 Architecture

The SAP Business Framework is a family of SAP and non-SAP products. It is an ope n, integrated, component-based enterprise business application solution for comp anies of any size in any industry. Business Framework provides flexibility in se tting up enterprise-critical distributed IT systems using independent components . The R/3 System is an evolving family of application components, that can be co mbined into an integrated, continuously maintainable network solution regardless of the release of the components. Business Framework is an open design, allowin g integration of components from third-party vendors. The SAP R/2 System was developed to run on mainframe computers; SAP R/3 System h as been developed to run with a distributed multi tier client/server architectur e. SAP R/3 can be configured to run on a single computer, or it can be distribut ed among many different machines at different locations. There is a clear distin ction between the presentation, application, database, and Internet-enabling lay ers. The presentation layer is the user interface, and a number of different graphica l user interfaces (GUIs) can be used. SAPGUI is SAP’s own user interface software (in over 20 different languages), but Microsoft Windows or Internet browser inte rfaces can be used in its place. Other examples of interfaces are kiosk systems, and telephone answering systems. Application servers contain the complete business process logic of R/3 applicati ons. These application servers can run on Windows NT systems, major UNIX operati ng systems, and AS/400 systems. A number of different application servers can be connected in a network, distributed geographically. The database layer manages both the R/3 System application components and the en terprise’s working data. This task is performed using relational database manageme nt systems. Supported are IBM DB2, Informix Online, Microsoft SQL Server, and Or acle. Database servers can be on different servers from the application servers, and can include mainframes, Windows NT, UNIX or AS/400. The industry standard S QL (Structured Query Language) is used for defining and manipulating all data. A pplications are fetched from the database as required, loaded into the applicati on layer, and then run from there. SAP also has an Internet layer (with access through a Web server) that works wit h System R/3 that enables a corporation to couple its systems with customers and vendors. Employees can access the system over the Internet or intranet, custome rs can place orders, and vendors can access their customers’ warehouse data to sch edule deliveries just in time. See mySAP.com below, which is central to SAP’s inte rnet strategy. SAP Application Link Enabling (ALE) is used to manage widely distributed, loosel y coupled systems, based on an exchange of messages controlled by business proce sses. Individual companies in a corporation can distribute their transaction wor kloads where data are distributed, while a common service is offered throughout the network. Individual tasks can be distributed across locations. The systems i nvolved can be different R/3 systems or non R/3 systems. With ALE, applications are integrated using asynchronous communications mechanisms. The R/3 System offers standard interfaces to enable integration of R/3 with the processes and data of business applications from other vendors. These object-ori ented interfaces are called business application programming interfaces (BAPIs). BAPIs are compatible with Microsoft’s Distributed Component Object Model (COM/DCO M) specifications and the Object Management Group’s Common Object Request Broker ( CORBA) specifications. R/3 applications are modules that can be used alone or combined with other solut ions. R/3 is scalable and can be used with from 30 to several thousand users. Popular desktop programs such as MS Word, MS Excel, and MS Project can be linked to R/3 applications. Electronic Data Interchange (EDI) between companies is als o part if R/3. The BASIS System is the fundamental software within R/3. Application modules lis ted above in SAP R/3 Functionality are added as needed. ABAP is the SAP programming language that is used in the application modules. Cu stom programming with ABAP is possible for add on modules (but the standard SAP modules should not be modified).

SAP R/3 Logical View The following illustration represents a logical view of the R/3 System. The difference between the logical view and a hardware- or software-based view i s that not all of the above components can be assigned to a particular hardware or software unit. The above diagram shows how the R/3 Basis system forms a centr al platform within the R/3 System. Below are listed the tasks of the three logic al components of the R/3 Basis system. Kernel and Basis Services The kernel and basis services component is a runtime environment for all R/3 app lications that is hardware-, operating system- and database-specific. The runtim e environment is written principally in C and C++. However, some parts are also written in ABAP. The tasks of the kernel and basis services component are as fol lows: Running applications All R/3 applications run on software processors (virtual machines) within this c omponent. User and process administration An R/3 System is a multi-user environment, and each user can run several indepen dent applications. In short, this component is responsible for the tasks that us ually belong to an operating system. Users log onto the R/3 System and run appli cations within it. In this way, they do not come into contact with the actual op erating system of the host. The R/3 System is the only user of the host operatin g system. Database access Each R/3 System is linked to a database system, consisting of a database managem ent system (DBMS) and the database itself. The applications do not communicate d irectly with the database. Instead, they use Basis services. Communication R/3 applications can communicate with other R/3 Systems and with non-SAP systems . It is also possible to access R/3 applications from external systems using a B API interface. The services required for communication are all part of the kerne l and basis services component. System Monitoring and Administration The component contains programs that allow you to monitor and control the R/3 Sy stem while it is running, and to change its runtime parameters. ABAP Workbench The ABAP Workbench component is a fully-fledged development environment for appl ications in the ABAP language. With it, you can create, edit, test, and organize application developments. It is fully integrated in the R/3 Basis system and, l ike other R/3 applications, is itself written in ABAP. Presentation Components The presentation components are responsible for the interaction between the R/3 System and the user, and for desktop component integration (such as word process ing and spreadsheets). Software-oriented View The following illustration represents a software-oriented view of the R/3 System . The software-oriented view describes the various software components that make up the R/3 System. In the software-oriented view, all of the SAPgui components and application servers in the R/3 System make up the R/3 Basis system. The R/3 Basis system is a multi-tier client/server system. The individual softwa re components are arranged in tiers and function, depending on their position, a s a client for the components below them or a server for the components above th em. The classic configuration of an R/3 System contains the following software l ayers:

Database Layer The database layer consists of a central database system containing all of the d ata in the R/3 System. The database system has two components - the database man agement system (DBMS), and the database itself. SAP does not manufacture its own database. Instead, the R/3 System supports the following database systems from other suppliers: ADABAS D, DB2/400 (on AS/400), DB2/Common Server, DB2/MVS, INFO RMIX, Microsoft SQL Server, ORACLE, and ORACLE Parallel Server. The database does not only contain the master data and transaction data from you r business applications, all data for the entire R/3 System is stored there. For example, the database contains the control and Customizing data that determine how your R/3 System runs. It also contains the program code for your application s. Applications consist of program code, screen definitions, menus, function mod ules, and various other components. These are stored in a special section of the database called the R/3 Repository, and are accordingly called Repository objec ts. You work with them in the ABAP Workbench. Application Layer The application layer consists of one or more application servers and a message server. Each application server contains a set of services used to run the R/3 S ystem. Theoretically, you only need one application server to run an R/3 System. In practice, the services are distributed across more than one application serv er. This means that not all application servers will provide the full range of s ervices. The message server is responsible for communication between the applica tion servers. It passes requests from one application server to another within t he system. It also contains information about application server groups and the current load balancing within them. It uses this information to choose an approp riate server when a user logs onto the system. Presentation Layer The presentation layer contains the software components that make up the SAPgui (graphical user interface). This layer is the interface between the R/3 System a nd its users. The R/3 System uses the SAPgui to provide an intuitive graphical u ser interface for entering and displaying data. The presentation layer sends the user’s input to the application server, and receives data for display from it. Wh ile a SAPgui component is running, it remains linked to a user’s terminal session in the R/3 System. This software-oriented view can be expanded to include further layers, such as a n Internet Transaction Server (ITS). Software-oriented and Hardware-oriented View The software-oriented view has nothing to do with the hardware configuration of the system. There are many different hardware configuration possibilities for bo th layers and components. When distributing the layers, for example, you can hav e all layers on a single host, or, at the other extreme, you could have at least one host for each layer. When dealing with components, the distribution of the database components depends on the database system you are using. The applicatio n layer and presentation layer components can be distributed across any number o f hosts. It is also possible to install more than one application server on a si ngle host. A common configuration is to run the database system and a single app lication server (containing special database services) on one host, and to run e ach further application server on its own host. The presentation layer component s usually run on the desktop computers of the users. Advantages of the Multi-tier Architecture The distribution of the R/3 software over three layers means that the system loa d is also distributed. This leads to better system performance. Since the database system contains all of the data for the entire R/3 System, it is subject to a very heavy load when the system is running. It is therefore a g ood idea not to run application programs on the same host. The architecture of t he R/3 System, in which the application layer and database layer are separate, a llows you to install them on separate hosts and let them communicate using the n etwork. It also makes sense to separate program execution from the tasks of processing u ser input and formatting data output. This is made possible by separating the pr

esentation layer and the application layer. SAPgui and the application servers a re designed so that the minimum amount of data has to be transported between the two layers. This means that the presentation layer components can even be used on hosts that have slow connections to application servers a long way away. The system is highly scalable, due to the fact that the software components of a n R/3 System can be distributed in almost any configuration across various hosts . This is particularly valuable in the application layer, where you can easily a dapt your R/3 System to meet increasing demand by installing further application servers. 5. mySAP.com and the Internet mySAP.com is SAP’s term for its Internet offering and strategy. The mySAP.com port als are ways of accessing all of the services and benefits afforded by this stra tegy. mySAP.com is an open collaborative business environment of personalized so lutions. According to SAP, it is a comprehensive basket of offerings that includ es Internet-enabled applications, such as the Web-enabled core components of SAP R/3. mySAP.com will be the interface to all SAP products: collaborative, front office , and back office. SAP’s vision is to continue to provide complete, integrated sol utions. Users of all the software solutions will access their applications via t he easy-to-use Workplace on their desktop. All of the applications will continue to work in an integrated fashion. mySAP.com integrates seamlessly with existing R/3 functions, users of mySAP.com need not have R/3 installed, and R/3 can be used without mySAP.com. If R/3 is in stalled, then mySAP.com would sit on top of the R/3 applications. mySAP.com is intended to incorporate all current SAP products in the form of com ponents. From Release 4.6 on, R/3 will be a mySAP.com component. mySAP.com can i nteroperate with R/3 from Release 3.1 on. Earlier R/3 releases can be connected on a project basis. R/3 Release 4.6 is also called the EnjoySAP Release with a new interface that ha s made SAP software easier to learn, tailor and use. The mySAP.com Workplace provides personal access to the business environment. It is a customizable, Web-enabled doorway into R/3, offering additional functions and services beyond the core R/3 functions. In addition, it provides integration with other ERP solutions and non-ERP information sources including financial ma rket data, news tickers, and industry-specific content. The mySAP.com Workplace is tailored to individuals, companies, and industries. I t makes the business solutions, knowledge, and services they need in their daily business activities readily available. The users, through their browsers, can a ccess functionality that is most relevant to their roles, and then configure the ir personal desktops to suit their individual work styles. The following are pro vided, or being developed: • Access to business solution applications • Access to internal corporate information, reports, press releases • Access to services available on the Internet • Access to any user applications • Access to the mySAP.com Marketplace The mySAP.com Marketplace is actually two things. It is the infrastructure that supports many SAP collaborative Business Scenarios, allowing many buyers and sel lers to come together to exchange goods, services, and information. The personal ized Workplace is the employee enterprise portal, the Marketplace is the global e-business hub. A Business Scenario offers the specific knowledge, functions, and services that one or more users may need to succeed in a business task. mySAP.com provides a h ost of e-business solutions, including purchasing, collaborative planning, emplo yee self service, direct customer servicing, and inter-business knowledge manage ment. Business Scenarios will provide access to all R/3 and SAP New Dimension fu nctionality. SAP has introduced the Internet Business Framework, which uncouples the integrat ion technology from the development language and runtime. This means that the so

ftware module that calls a certain service need not be written in the same langu age as the software module that provides the service. Rather, the software provi ding the service can be implemented in virtually any language. SAP also provides mySAP.com Application Hosting, where the IT services are outso urced to a hosting partner, with access to SAP products. 6. SAP R/3 Custom Configuration & Implementation Implementing R/3 requires a team of IT specialists and business users. For the e nterprise, this can result in business process re-engineering: less supervisory levels, better flow of information between business units, and a new business or ganizational structure. The process can be ongoing – change can be continuous. App lications from R/3 are usually implemented gradually in a progressive implementa tion, rather than everything implemented at once. The R/3 System is highly configurable to suit the operations of the enterprise. SAP has provided tools to model business processes, configure the system, and ma nage the process. The R/3 Procedure Model provides guidance through the different project phases s tep by step (from project generation to going live). A wide range of tried-and-t rue, graphically portrayed business scenarios and processes are stored in the R/ 3 Reference Model, from which the best possible processes can be chosen. The R/3 Procedure Model uses the following tools: • IMG (Implementation Management Guide) of R/3 – acts as a project management system , providing a plan of activities. It recommends a sequence for configuring and c ustomizing the system, and supports documenting the project. • SAPoffice – stores, edits text and graphical information. It also links to standar d PC office products such as word processing and spreadsheets. • Business Navigator - provides a graphical view of business processes and functio ns. The R/3 Analyzer is a set of tools for selecting from the R/3 system the standar d business programs that are needed for a particular enterprise. The results can be displayed in a graphical or list form. R/3 Analyzer prompts users to perform steps in the proper order. The R/3 Reference Model is a tool that is provided to support configuration acti vities. It contains over 1,000 business processes that describe the functions of the R/3 System, and provides over 100 basic business scenarios. Five views are provided by the Reference Model: • Process view – a network of event-driven process chains • Function view – a summary display of the business functions required of R/3 • Information flow-view – for information flow between event-driven process chains • Data view – clusters of data structures required for the business processes • Organization view – the relationships between the organizational units of the ente rprise The configuration that is chosen by the users is represented by parameters in ta bles; the R/3 tools create the tables as the users specify their requirements, w ithout the need to modify any software. Requirements that are not available in t he standard R/3 Reference Model are documented by the tools, but must be program med with the ABAP/4 language (with the ABAP/4 Development Workbench). Thus the e nterprise can extend, and have their own version, of the R/3 Reference Model. With Release 4.0, a business component can be implemented independently of the r elease of R/3. Thus the entire system does not need to be implemented or upgrade d simultaneously. SAP has also provided AcceleratedSAP (ASAP) as a methodology and tools for more rapid implementation of R/3. With Release 4.0, the Business Engineer draws upon the Reference Model to provide guidance through the implementation, in analyzing , designing and configuring the business processes. The Business Engineer can be used in a graphical or tabular form and is the recommended method of implementi ng or maintaining R/3. 7.1 ASAP Methodology Used for Project Management Optimization The ASAP solution was developed to ensure the successful, on-time delivery of a project. SAP delivers the AcceleratedSAP (ASAP) methodology for project manageme

nt and system implementation. Developed by SAP to optimize the success of implementing the SAP Business Suite, ASAP streamlines the implementation by providing templates, methods, tools, and accelerators that have been built on the success of thousands of previous SAP i mplementations. The ASAP methodology adheres to a specific road map that addresses the following five general phases: Project Preparation, in which the project team is identified and mobilized, the project standards are defined, and the project work environment is set up; Blueprint, in which the business processes are defined and the business blueprin t document is designed; Realization, in which the system is configured, knowledge transfer occurs, exten sive unit testing is completed, and data mappings and data requirements for migr ation are defined; Final Preparation, in which final integration testing, stress testing, and conve rsion testing are conducted, and all end users are trained; and Go-Live and Support, in which the data is migrated from the legacy systems, the new system is activated, and post-implementation support is provided. The AcceleratedSAP (ASAP) methodology modified for Packaged Solution projects. A SAP incorporates a set of documentation containing information across all areas of the project from the charter providing the required implementation objectives and benefits, through the system design, configuration, project decisions, issu e resolution, configuration changes, go live planning, etc. This encompasses pr oject management as well as quality and documentation standards. Where appropri ate the recommended ASAP standard forms and “How To” guides will be used. All team m embers should have access to the ASAP environment to help them understand what w ork is required to be done within any element of the project plan.

7.1.1 Phase 1 - Project Preparation The purpose of this phase is to provide initial planning and preparation for you r SAP project. Although each SAP project has its own unique objectives, scope, a nd priorities, the steps in Phase 1 help you to identify and plan the primary fo cus areas that need to be considered. As you prepare for your SAP implementation, you must address several important i ssues at the beginning of the project. These include: • Defining your project goals and objectives; • Clarifying the scope of your implementation; • Defining your implementation strategy; • Defining the overall project schedule and implementation sequence; • Establishing the project organization and committees; • Assigning resources. By addressing these issues early in your implementation, you help ensure that th e project will proceed efficiently, and establish a solid foundation for a succe ssful SAP implementation. 7.1.2 Phase 2 - Business Blueprint – significantly different to traditional approa ch The purpose of this phase is to create the Business Blueprint, which is a detail ed documentation of the results gathered during requirements workshops. Furtherm ore, the Business Blueprint documents the business process requirements of the c ompany. On this basis, you achieve a common understanding of how the company int ends to run its business within the SAP System. During this phase, you also: • Refine the original project goals and objectives; • Define the to-be design of the affected business processes; • Refine the overall project schedule and implementation sequence. The SAP business blueprint is modeled by using the Event-Driven Process Chain Me thodology (EPC). This methodology is very simple to understand and is based on four basic elements: the Events, the Tasks, the Organization, and the Informatio n. The Events are use to indicate when something should be done. The Task is use d to explain what should be done. The Organization indicates who should do the t ask. The last element is the Information, which includes what data necessary per forms in each task, and the date created while performing each task. The figure 1 illustrates the symbols used in these diagrams. The figure below illustrates a sample chain of events. In this example the task goods receipt processing is triggered by the event goods arrived. Purchase order and delivery note are information used by this task. Inspection result is infor mation generated by the task.

The task Goods receipt processing takes place at the goods receiving point and i t can generate one of the three events: goods released, goods blocked or goods r ejected. Production and Inspection are two different processes that are specifie d in two other separated diagrams. This is an example of how different business process are linked together. In the case of the ERP Packaged Solution approach the blueprint phase is quite d ifferent. We run workshops prior to contract which explain the relevant templat es and processes for each functional area as well as the standard functionality

that is offered. Gaps are identified and the strategy for dealing with them agr eed. The templates (best practices), standard functionality and gap plan are si gned off before proceeding to the next stage. Having undertaken these workshops over this sign-off and gap plan has already been defined and incorporated into t his proposal. The requirement for this phase is negated avoiding extra costs and risk. Our proposition is underpinned by the assumption that the best practice template processes cover at least 95% of [Client name] first day 1 requirements. 7.1.3 Phase 3 - Realisation The purpose of this phase is to implement the business and process requirements based on the Business Blueprint. The main activities undertaken during the reali sation phase are: • Build of the system; • Development of interfaces, conversions and reports; • Implementation of authorisations to meet the Meteor security requirements; • Formal unit testing of all deliverables; • Develop end-user training courses and materials; • Formal integration testing of the entire system. In the case of our ERP Packaged Solution approach the system is installed, best practice templates are applied and gap configuration carried out. 7.1.4 Phase 4 – Final Preparation The purpose of this phase is to complete the final preparation (including system testing, end user training, system management and cut-over activities), to conf irm your readiness to go live. The Final Preparation phase also serves to resolv e all crucial open issues. On successful completion of this phase, you are ready to run your business in your live SAP system. The main activities of this are: • Deliver End-User Training; • Conduct System Tests; • Carry out Trial Conversions; • Perform Cutover to Production System; • Reconcile Converted System. 7.1.5 Phase 5 - Go Live and Support The purpose of this phase is to move from a pre-production environment to live p roduction operation. The approach to long term application support is discussed elsewhere in this document. 7.1.6. Example of Project Duration Phase Percentage Project Preparation 12% Business Blueprint 15% Realisation Baseline Final Configuration Integration Test 46% 12% 13% 21% Final Preparation 19% Go Live and Support 8% 7.1.7 Key deliverables from each phase Phase Deliverable Project Preparation Project Plan Project Scope Business Blueprint Authorisations that will be required Reports to be written

Conversions to be made Req. Interfaces identified Bus. Processes identified Org. Structure defined Baseline Scope A Working System Business Process Master List Realisation Business Process Procedures Test Cases End User Training Materials Reports written Interfaces established Conversions made Final Preparation Test plan Test materials Go-live plan Go Live and Support System Performance Evaluation ASAP incorporates standard design templates and accelerators covering every func tional area within the system, as well as supporting all implementation processe s. Complementing the ASAP accelerators, the project manager can create a compreh ensive project plan, covering the overall project, project staffing plan, and ea ch sub-process such as system testing, communication and data migration. Milesto nes are set for every work path, and progress is carefully tracked by the projec t management team. 7.2 The R/3 Procedural Model The SAP core tool that describes the activities needed when implementing SAP. It’s like a detailed project plan of all the steps and tasks involved during the i mplementation process. Tools ® Business Engineering ® Customizing Basic Functions ® Procedural Module It’s useful for large, complex organizations wishing to implement R/3 in stages.