Introduction to ERP

History of ERP
The focus of manufacturing systems in the 1960's was on Inventory control. Most of the software
packages then (usually customized) were designed to handle inventory based on traditional
inventory concepts. In the 1970's the focus shifted to MRP (Material Requirement Planning) systems
that translated the Master Schedule built for the end items into time-phased net requirements for
the sub-assemblies, components and raw materials planning and procurement.
In the 1980's the concept of MRP-II (Manufacturing Resources Planning) evolved which was an
extension of MRP to shop floor and Distribution management activities. In the early 1990's, MRP-II
was further extended to cover areas like Engineering, Finance, Human Resources, Projects
Management etc i.e. the complete gamut of activities within any business enterprise. Hence, the
term ERP (Enterprise Resource Planning) was coined.

What is ERP?
Enterprise Resource Planning or ERP is an industry term for integrated, multi-module application
software packages that are designed to serve and support multiple business functions. An ERP
system can include software for manufacturing, order entry, accounts receivable and payable,
general ledger, purchasing, warehousing, transportation and human resources. Evolving out of the
manufacturing industry, ERP implies the use of packaged software rather than proprietary software
written by or for one customer. ERP modules may be able to interface with an organization's own
software with varying degrees of effort, and, depending on the software, ERP modules may be
alterable via the vendor's proprietary tools as well as proprietary or standard programming
languages.

ERP Definition
Using medical analogy an ERP system has brains (process logic), muscle (business transactions), and
heart (business policy).ERP system communicates (as a nervous system) across business functions.
It is a company-wide computer software system used to manage and coordinate all the resources,
information, and functions of a business from shared data stores.
ERP relates to the integrated software infrastructure that supports the entire company business
process.
ERP refers to a view of a company and all its parts as connected whole, rather than small silos of
activity.
The term of ERP is originally derived from Manufacturing Resource Planning (MRP II) and Material
Requirements Planning (MRP). MRP evolves into ERP when capacity planning activity
and routing become a part of the standard software activity.

Why is ERP Necessary?

The implementation of ERP systems has helped small and midsized companies, significantly improve
their business metrics by process optimization, improving the entire supply chain process, better
inventory control, better reporting to take decisions, integration across functionalities and
increasing transparency across the company. Purchase department can see the sales department
data, Sales department can see inventory data, and top management can see any data on a click of
single button.
The introduction of ERP in any company has also helped it move up the value chain in term of
market credibility and building the confidence of its customer, stakeholders and vendors. Most of
the small and midsized companies were living with in-house developed applications which are non-
integrated and on disparate technology architectures. This has resulted in running with redundant
technology, loss of support, non availability or less availability of critical information at the right
time resulting in overall business loss.
The key drivers of introducing an ERP system in a small and midsized company are introduction of
industry standard processes which are already embedded in the application, adopting integration
across business functions leading to better transparency, access to real time information, analytical
reporting for business decisions and adopting state of the art technology.
By becoming the integrated information solution across the entire organization, ERP systems allow
companies to better understand their business. With ERP software, companies can standardize
business processes and more easily enact best practices. By creating more efficient processes,
companies can concentrate their efforts on serving their customers and maximizing profit.

Integration is Key to ERP Systems

Integration is an exceptionally significant ingredient to ERP systems. The integration between
business processes helps develop communication and information distribution, leading to
remarkable increase in productivity, speed and performance.
The key objective of an ERP system is to integrate information and processes from all functional
divisions of an organization and merge it for effortless access and structured workflow. The
integration is typically accomplished by constructing a single database repository that
communicates with multiple software applications providing different divisions of an organization
with various business statistics and information. Although the perfect configuration would be a
single ERP system for an entire organization, but many larger organizations usually deploy a single
functional system and slowly interface it with other functional divisions. This type of deployment
can really be time-consuming and expensive.

ERP Features
Most ERP suits contain a broad range of modules to enhance a variety of back-office functions,
including:

 Manufacturing – includes features for project and process management, engineering,

scheduling, capacity management, material requirement planning, and quality
management.
 Supply Chain Management – includes capabilities to support order entry, purchasing
and procurement, inventory control, planning, goods inspection, and claims processing.
 Financial Management – includes functionality such as general ledger, cash
management, accounts payable and receivable, and fixed asset management.
 Project Management – includes features for costing, billing/invoicing, time and
expense management, and activity monitoring.
 Human Capital Management – includes capabilities to support hiring and staffing,
payroll, training, time and attendance tracking, and benefits administration.
 Customer Relationship Management - Sales and marketing, service, commissions,
customer contact and after sales support.
 Data Warehouse - Generally, this is an information storehouse that can be accessed by
organizations, customers, suppliers and employees for their learning and orientation.

Disadvantages of ERP Systems

 The scope of customization is limited in several circumstances them synchronize with the
ERP.
 ERP systems can be extremely expensive to implement.
 There could be lack of continuous technical support.
 ERP systems may be too rigid for specific organizations that are either new or want to move
in a new direction in the near future.
 Inadequate user involvement.
 Lack of controls in ERP system.
 Poor data conversion.

Advantages of ERP
 Only customization required.
 Integration of all functions already established.
 Easy enterprise wide information sharing.
 Suppliers and Customers can be online communication.
 Knowledge transfer between industries guarantees innovation.
 A perfectly integrated system chaining all the functional areas together.
 The capability to streamline different organizational processes and workflows.
 The ability to effortlessly communicate information across various departments.
 Improved efficiency, performance and productivity levels.
 Enhanced tracking and forecasting.
 Improved customer service and satisfaction.

Efficient use of 5 – M’s

 Men
 Material
 Money
 Machines
 Methods

Why My Company Require ERP?

Companies of all types and sizes can benefit from an ERP implementation. Even if business
processes and related workflows are relatively smooth across the business, ERP can deliver even
greater productivity and cost-efficiency benefits. However, the companies who need ERP the most
are those whose most critical business procedures are so fragmented and broken that they hinder
growth and profitability. For these firms, ERP can help create a business process management
mindset, allowing them to define best practices, formalize activities, and streamline cross-
department functions.

Complex ERP vs. Out of the Box

Different ERP systems offer varying amounts of customization possibilities. Others have several
modules that work in an “out of the box” environment. Every company must look at their needs
and determine how much customization is required. Highly customized systems have some
disadvantages for the small business owner; they require full time systems administration personnel
to manage the system, adding to staff costs.
Systems that require a high amount of customization will also bring significantly higher upfront
implementation and training costs. This adds complexity instead of simplifying the job management
process. ERP systems with high complexity also carry high maintenance costs for upgrades and
operating system changes.

ERP systems and large corporations with project-based activity

Many large corporations have already found they cannot operate efficiently without an ERP
type system. Sometimes they develop one internally, utilizing a large amount of resources to make
and manage this system. Alternatively, they purchase a third party system and implement it into
their infrastructures.

In many cases they may have deployed an ERP solution that has not been specifically developed for
project-based activity and which therefore lacks many of the features needed to handle this type
of operation efficiently. Implementing an ERP system within a large corporation involves significant
time and resources, especially when the system is internally developed or requires an important
degree of customization. This is why, when evaluating new systems, a company should also
consider training costs, implementation costs, customization costs as well as maintenance costs.

Working with Legacy Data

Many companies utilize simple office products such as Microsoft Word® and Microsoft Excel®
when starting out. Often, a lot of useful data is contained within those spreadsheets. This data
may include costs for processes, profit margins, rates for machine operations, etc. It does not make
sense to force a small business to re-enter all of that data into a new job management software
package. Proficient and easy to use job management software will allow users to utilize the data
from existing spreadsheets. This data can be used to get a user productive with their new
management software faster. Similarly, companies may already have print templates in Microsoft
Word®, prior to installing an ERP. If the ERP is capable using those pre-existing templates to print,
this will save a lot of time during the configuration phase.

Communicating with other Systems in Legacy Data

Sharing the status of a job in progress with the customer is often part of the service process. It may
be necessary to output job status into a file format usable by the customer, without giving away
proprietary and special customer data. The file format to share information may be a simple
Microsoft Office® product like Microsoft Excel or something a little more detailed like Microsoft
Project®. In either case, the small business should be able to share job status with their customer,
without giving away company confidential information.

Disadvantages of a Legacy Information System

 Slow
 Expensive to maintain
 Skills hard to find
 Can hinder progress
 No documentation

Working with ERP

ERP is designed to help companies who have trouble achieving “one version of the truth”. For
example, in many firms, revenue data maintained by the finance department doesn‟t always match
the numbers generated by the sales organization. These disparities can make it difficult to assess
financial status and profitability, and in the case of public companies, report results to
investors. ERP systems consolidate and centralize all back-office information. Every transaction
conducted by every department will be handled, recorded, and managed by a single system. So,
the most frequent causes of conflicting information, such as a lack of integration across
departmental applications, are eliminated.
ERP Leaders will develop an integrated application suite that is business-centric yet flexible to
clients‟ needs, ERP moves from the role of software provider to business partner. It will be able to
offer service bureau and outsourcing operations (themselves or in partnership) which will stimulate
demand for new solutions and also develop packages easier to implement and maintain.

ERP General Outlook

1997 worldwide enterprise applications market grew at 20.2% to $14.4 billion (licenses and
maintenance).
 Top 10 ERP vendors growth rate was 32.9% collectively and they have a > 40% share of the
total market.
 ERP industry remains healthy and growth rate projections are 30-33% annually for the next
3-5 years.
 This represents a decline from the 60-100% growth rates some vendors have experienced in
the past few years.
ERP is much more than just computer software. An ERP System including ERP Software, Business
Processes, Users and Hardware that run the ERP software. An ERP system is more than the sum of
its parts or components. Those components interact together to achieve a common goal –
streamline and improve organizations business processes.
ERP Software would consist hundreds of input information for any particular business activity. Thus
good knowledge of each entity of system to the users is the most important factor in ERP Software.
No one from IT industry will be unknown from the word SAP. SAP is the most successful ERP
Software.

Top 10 ERP Vendors

 SAP AG
 PeopleSoft
 Oracle
 Computer Associates
 Baan
 J. D. Edwards
 System Software
 Associates
 Geac Computer
 IBM

ERP Packages & Market Place

Company Packages for ERP
 Oracle Corporation Oracle E-Business Suite
 Oracle Corporation PeopleSoft
 Microsoft Corporation Microsoft Dynamics
 SAP AG my SAP

Oracle Corporation :
Oracle Corporation offers various products under Oracle E-Business Suite:
The Product available is Financials, Projects, Materials Management, Supply Chain, Human
Resources, and Manufacturing.
Features: Oracle standard delivered automated application enablers, configurable enablers,
“Alert” configurable enablers, Application Security.
Reports
 standard delivered
 newly developed

Microsoft Dynamics:
Microsoft Dynamics is a line of business software owned and developed by Microsoft, created by
other companies and known by various other names. Dynamics was previously known by the
codename “Project Green”. It replaced Microsoft Business Solutions, the company‟s previous
business software family.
 Backed by the strength of Microsoft.
 One of the largest IT companies in the world.
 Uses familiar Microsoft interface.
 Complete Business Management software: ERP, E-commerce, Supply Chain, Manufacturing,
CRM, HR, Project accounting.
 Uses familiar Microsoft interface.

PeopleSoft:
PeopleSoft was a company that provided Human Resource Management Systems (HRMS),
Financials (FMS), Supply Chain (SCM) and Customer Relationship Management (CRM) software, as
well as software solutions for manufacturing, enterprise performance management, and student
administration to large corporations, governments, and organizations.
Features:
 PeopleSoft delivered automated enablers - Document balancing, edits and validations.
 PeopleSoft configurable enablers - Required fields, audit trails, trial mode vs. final mode,
workflow approvals, control data, correction access, statistical auditing, and positive pay
banking.
 Application Security - Menu/panel security, row level security, workflow security, field
security, preferences.
 Reports - Query, PS/nVision, SQR

SAP AG:
SAP AG was founded in 1972 by five German engineers with IBM in Mannheim, Germany;
interestingly four of the founders - Hasso Plattner, Dietmar Hopp, Klaus Tschira, and Hans Werner
Hector--were still with SAP in early 1996. When an IBM client asked IBM to provide enterprise-wide
software to run on its mainframe, the five began writing the program only to be told the
assignment was being transferred to another unit. Rather than abandon the project altogether,
they left IBM and founded SAP in Walldorf, near Heidelberg. While the company originally took its
name from the abbreviation for Systemanalyse und Programmenentwicklung (systems analysis and
program development), SAP eventually came to stand for Systeme, Anwendungen, und Produkte in
Datenverarbeitung (systems, applications, and products in data processing). SAP's story is one of a
steady rise from a small, five-man operation headquartered in southwest Germany's Rhine-Neckar
region to one of the world's largest independent software providers and an employer of more than
47,598 people in over 50 countries.

SAP's exciting evolution and key milestones:

 1972 – 1981: The First 10 Years – "The First 10 Years" chronicles the highlights of the
company's beginnings and subsequent development – from SAP's foundation, its first
software modules, and the SAP R/2 system to the company's first-year revenues, first
customers outside of Germany, and first trade-show appearance.
 1982 – 1991: The SAP R/3 Era – Four servers with 64MB of memory. Employing 100
employees and signing its 1,000th customer. Reaching the DM100 million in revenues, and
expanding abroad. The development of the SAP R/3 product generation. These and other
landmark events are the subject of "The SAP R/3 Era."
 1992 – 2001: The Age of E-Business – Reaching €6 billion, and employing more than 24,000
employees. Trade shows and conferences. Going public, and developing new technologies
and platforms. Learn more about SAP's meteoric rise in "The Age of E-Business."
 2002 to Today: SAP Today – SAP's story continues with the SAP NetWeaver platform, whose
technologies intertwines system landscapes and information flows, integrate companies and
their employee teams, and establish connections among markets across virtually any
perceived barrier. "SAP Today" describes the most recent technological and entrepreneurial
milestones in SAP's continuing development.

SAP’s Focus Through

 Expansion outside of non-manufacturing industries
 Retail
 Financial Services
 Public Sector and Higher Education

 Manufacturing industry segment specific functionality

 Aerospace & Defense
 Engineering & Construction Chemical
 Pharmaceuticals
 Focus on post-implementation support and tools
 Oil & Gas

Communities
SAP Developer Network (SDN) is a community of developers, consultants, integrators, and business
analysts gaining and sharing knowledge about ABAP, Java, .NET, SOA, and other technologies via
expert blogs, discussion forums, exclusive downloads and code samples, training materials, and a
technical library.

Organization
Functional units of SAP are split across different organizational units for R&D needs, field activities
and customer support. SAP Labs are mainly responsible for product development where as the field
organizations spread across each country are responsible for field activities such Sales, Marketing,
Consulting etc.
Head office located in SAP AG is responsible for overall management as well as core engineering
activities related to Product Development. SAP customer support, also called Active Global Support
(AGS) is a global organization to provide support to SAP customers worldwide.

Different Versions of SAP offering –

 SAP R/1, R/2
 SAP R/3, 3.1 – 4.6c
 SAP R/3 Enterprise 4.7
 my SAP ERP 2004
 my SAP ERP 2005
 SAP ECC 6.0

SAP - The Product

SAP ECC is one of five enterprise applications in Sap’s Business Suite . The other four
applications are:
 Customer Relationship Management (CRM) - Helps companies acquire and retain
customers, gain marketing and customer insight.
 Product Lifecycle Management (PLM) - Helps manufacturers with product-related
information.
 Supply Chain Management (SCM) - Helps companies with the process of resourcing its
manufacturing and service processes.
 Supplier Relationship Management (SRM) - Enables companies to procure from suppliers.

R/3 Architecture - R for Real Time Architecture

Starting from the 70„s there have been major technology waves – from mainframe computing to
client server architectures, and now from client server technology to service oriented
architectures.
Three types of architecture: R/1, R/2, R/3. We are mainly focusing
R/3:
 This architecture comprises of three logical units.
 Launched on 6 July, 1992.
 Different server will take care of the various set of jobs which improves the performance of
the entire architecture.

Types of Server
 Presentation server - This is the server where the end user will interact. Here the user
will be able to log on to the SAP system and can work with various set of transactions.
 Application server - The set of commands that the end user gives at the presentation
server will be received by the application server. This is the server that will process the set
of the request made by the presentation server.
 Database server - This is the servers that stores the data and maintain them in various
set of tables. The server use RDBMS concept to do so.

SAP R/3 Enterprise Architecture

SAP R/3 Enterprise is built along the principle of optimizing the stable and mature core processes
and infrastructure and making new enhancements optional and deployable as needed.
SAP R/3 Release Strategy
New developments in SAP R/3 Enterprise are encapsulated in Extensions and can be optionally and
flexibly deployed
The SAP R/3 Enterprise Extensions will also be available to all SAP R/3 Customers as part of SAP R/3
maintenance
SAP R/3 Enterprise Extensions have a separate release cycle to the SAP R/3 Enterprise core

Application & Technology View

Technology
Since SAP R/3 Enterprise is compatible with my SAP ERP, a customer, once he is on SAP R/3
Enterprise, is well prepared for further transition. The separation of Application Core, Extension
Sets is used in the same way. Additional capabilities of my SAP ERP can be implemented step by
step.

SAP Net weaver

This is the technical foundation used by my SAP Business Suite (and SAP xApps) to deliver a
complete and flexible infrastructure that allows companies to easily integrate SAP and non-SAO
applications. It is divided into four main areas:
People Integration
This ensures that employees have access to all of the relevant information and data necessary for
them to perform their work quickly and efficiently, SAP Enterprise Portal plays a major role in
doing this.

Information Integration
This section manages all of the company‟s relevant data and that of any co-operating 3rd parties.

Process Integration
This is ensures that all business processes can run across system boundaries in different system
landscapes. SAP Exchange Infrastructure (SAPXI) is key to achieving this and it does so through using
XML data packages.

Application Platform
The Application Platform is able to support both ABAP and Java 2 Enterprise Edition (J2EE) within
the same environment to ensure independence of operating systems and database, the support of
independent webs services and any bespoke company applications that may be run. The central
component within the Application Platform is the Web Application Server (WAS).

mySAP:
As part of the vision to bring SAP to all types and sizes of businesses; SAP AG introduced it‟s my SAP
platform which is fully scalable and can be adjusted to the size and ever changing processes of the
companies which implement it. My SAP was introduced to connect company e-commerce solutions
with existing ERP application using up-to-date Web Technologies.
In total the new my SAP platform comprises of four different layers which can be implemented
accordingly and they are:
 my SAP ERP

 my SAP Business Suite

 my SAP All-in-One

 SAP Business One

mySAP ERP:
This solution incorporates accounting, logistics and human resources – the fundamental business
processes at the heart of every enterprise. It is able to provide these functions for both corporate
headquarters and smaller subsidiaries.
Essential my SAP ERP allows companies to gain greater control over their administrative and
operations environment in order to increase efficiency and profitability. It is designed in such a way
that companies only need to implement the functions that they require as and when necessary thus
reducing the implementation time, the cost of ownership and making any future upgrades more
manageable.

My SAP Business Suite

This is the complete package of solutions that aims to improve the efficiency and effectiveness of a
company‟s business relationships.
It consists of a number of different products that enable cross-company processes and is typically
used by large companies with a large number of users and processes that are constantly evolving.
My SAP All-in-One
Based on the technology used in my SAP Business Suite and developed with several SAP partners,
my SAP All-in-One provides pre-configured SAP systems for smaller companies with relatively fewer
employers and more stable processes. The off the shelf software is an industry specific or country
specific version of the SAP Business Suite complete with built-in tools and methodologies for a cost-
effective implementation. It is able to provide businesses the following advantages:
 Quicker implantation and transparent costs.

 Increased productivity and cost control.

 Reliable partners.

 Fully Scalable.

SAP Business One

A comprehensive, integrated solution that is similar to Microsoft Windows by way of its simple
navigation look and feel; it is also integrated with MS Word and Excel. This solution is simple yet
powerful and is suitable for organization with as few as 10 employees as it allows companies to gain
an immediate and complete view of their business operations and their customer‟s activity. It
boasts the following advantages:
 Quick Implementation.

 Reduced Costs.

 Increased productivity and cost control.

 Help you make sound business decisions.

 Fully scalable.

SAP ECC
SAP ECC stands for ERP Central Component. Back in 2005, SAP AG, the company that provides the
enterprise resource planning solution upgraded SAP package and launched it as SAP ECC 6.0. ECC6.0
is the latest version and it is the next generation of the SAP R/3. It supports Net weaver component
and also modules like BI, XI, and EP.

Different Modules of SAP

Technical Modules:
 SAP BASIS - Hardware configuration, network setup. It‟s a TECHNICAL module of
SAP.
 SAP ABAP - Advance business application programming (ABAP).
 SAP BI – Business Intelligence.

Functional Modules:
Accounting
 SAP FI - Financial Accounting (FI)
 SAP CO - Controlling (CO)
 SAP AM - Asset Management (AM)
Logistics
 SAP SD -Sales and Distribution (SD)
 SAP MM-Material Management (MM)
 SAP PP-Production Planning (PP)
 SAP QM-Quality Management (QM)
 SAP PM-Plant Management (PM)

Others
 Human Resources (HR)
 SAP PS-Project System (PS)
 SAP WF Workflow (WF)
 SAP IS –Industry Specific

New Dimensions:

 CRM (Customer Relationship Management)

 SCM (Supply Chain Management)
 SEM (Strategic Enhanced Management)
 APO (Advanced Planner Optimizer)
 EP (Enterprise Portal)
 SRM (Supplier Relationship Management)
 XI (Exchange Infrastructure)

Case Study
ERP in manufacturing industry
TATA Steel
Tata Iron and Steel Company Limited (TISCO) made a steely resolution
to remodel itself from a product-driven to a customer-driven
enterprise of the Internet economy. It deployed an ERP, SAP R/3 to
help its resolution bear fruit, and now enjoys exciting operational and
cost benefits by Bhavish Sood.
"Post the introduction of the ERP solution, the results have been terrific. TISCO has spent close to
Rs 40 crores on its implementation and has saved Rs 33 crores within a few months," said Ramesh C.
Nadrajog, Vice President, and Finance. "The manpower cost has reduced from over $200 per ton
two years ago, to about $140 per ton in 2000.
The overdue outstanding has been brought down from Rs 5,170 million in 1999 to Rs 4,033 million
by June 2000. The inventory carrying cost has drastically deflated from Rs 190 per ton to Rs 155 per
ton. To add to this, there have been significant costs savings through management of resources
with the implementation of SAP."
Sounds almost Utopian doesn't it? But that's exactly the result of TISCO's ERP implementation
completed within eight months. TISCO is Asia's first and India's largest integrated private sector
steel company. It has a state-of-the-art 3.5 million tone steel plant and is capable of meeting the
most rigorous demands of its customers worldwide.
The company adopted ERP technology to take a lead in the competitive steel industry and through
constant learning, innovation and refinement of its business operations, has transited seamlessly
from a production-driven company to a customer-driven one. The existing technology was a simple
replication of the manual system. Not only did it operate as individual islands of information but
the technology had outlived its lifetime and was completely obsolete. The employees and
management at TISCO faced a cumbersome task exchanging and retrieving information from the
system.
Further, the reliability of information obtained was questionable because of inconsistency and
duplication of data from different departments. Also there was no built-in integrity check for
various data sources. Besides, several times the information against certain items was found
missing.
An early response is to changing customer needs started as early as 1991, with a study on cost
competitiveness and a formal business plan, followed by ISO 9002 certification and benchmarking
initiatives. Realizing the need to further support the re-engineered core processes and quickly align
the business processes to radical changes in the market place, TISCO decided to go for a new robust
solution.

Design
In 1998-99 a small cross-functional in-house team along with
consultants from Arthur D. Little (Strategy Consultants) and
IBM Global Services (BPR Consultants) redesigned the two
core business processes: Order Generation & Fulfillment and
the Marketing Development processes. This was done to
improve customer focus, facilitating better credit control,
and reduction of stocks.

Choosing the platform and technology

The management at TISCO wanted the software to seamlessly integrate with its existing
information system and further provide compatibility with its future implementations. After an in-
depth study of functionality, cost, time, compatibility, esteem, operability, support, and future
organizational requirements SAP fared on the top of the list of contenders.
The implementation of SAP was associated with certain strategic goals in mind. With this
implementation, TISCO wanted to bring forth a culture of continuous learning and change. This
would enable TISCO to achieve a world-class status for its products and services and strengthen its
leadership position in the industry. Besides this, TISCO also wanted the software to result in quick
decision-making, transparency, credibility of data, and improve responsiveness to customers across
all areas.

The real challenge

B. Muthuraman, MD (Designate), said, "Implementing any ERP
system is a challenge for an organization because of the
declining success rate of ERP implementations world-wide.
At Tata Steel however the real challenge for us did not lie in
successfully implementing SAP or in rolling it out to our 46-odd
geographic locations across the country under a big bang
approach in just eight months. The real challenge lay ahead in
building a conductive environment where SAP will be embedded
in the hearts and minds of the people and the customers of
TISCO."

Mapping technology to business processes

A road map was created to achieve the desired levels of success with ERP. All branches which had
huge numbers of transactions and complexity were identified as 'hubs.' And the smaller branches
along with the consignment agents were defined as 'spokes,' which were attached to these
branches. In January 1999 TISCO created a team called 'TEAM ASSET', an acronym for Achieve
Success through SAP Enabled Transformation.

The TEAM ASSET had two simple axioms:

 Go-Live date - 1st November 1999
 There are only 24 hours a day

Preparatory task forces activities were conducted and core business processes were mapped to SAP
modules.
A parallel activity called 'Change Management' was initiated within the company. The prime
objective of 'Change Management' was to reach out to people involved non-directly in the project
to apprise them of the developments taking place.
Tata Steel planned a 'big-bang' approach of going live with all the modules at the same time. Within
eight months, on November 01, 1999, Tata Steel pulled off a big bang implementation of all SAP
modules at one go across 46 countrywide locations. The deadline was successfully met.

The Result
The introduction of SAP solutions within Tata Steel has led to efficient business processes,
enhanced customer service, reduced costs, improved productivity, accelerated transaction time,
workflow management and reduction in the number of credit management errors. There have also
been significant savings in manpower, inventory levels, and resource management.
TISCO can now update its customers daily and provide seamless services across the country,
improving customer management. The availability of online information has facilitated quicker and
reliable trend analysis for efficient decision-making. Besides, the streamlined business process
reduces the levels of legacy system and also provides consistent business practices across locations
and excellent audit trail of all transactions.
"Now I shudder to think how we were functioning so many years without a world-renowned ERP
system. Along with the hard times we had, came the rewards of the success of implementation,"
remarked Mr. K. V. Srinivasan, Member, and Team ASSET at TISCO.

ERP in Retail
Pantaloons
Needing an organization-wide IT solution to
help it perform better, Pantaloon decided to
implement an ERP system from SAP.
More than eight years after it forayed into the
retail business, Pantaloon Retail decided to
implement SAP to keep itself competitive in
the rapidly growing Indian retail market.
Store operations have never been as important to retailers as they are now. Successful retailers are
those who know that the battle for customers is only won at the frontline, which in the case of a
retail chain is at its stores.
Pantaloon was regularly opening stores in the metros and there was an urgent need for a reliable
enterprise wide application to help run its business effectively. “The basic need was to have a
robust transaction management system and an enterprise wide platform to run the operations,”
says Rakesh Biyani, Director, Pantaloon. The company was looking for a solution that would bring
all of its businesses and processes together. After a comprehensive evaluation of different options
and software companies, the management at Pantaloon decided to go in for SAP.

The Solution
Some of the qualities of SAP retail solutions are
that it supports product development, which
includes ideation, trend analysis, and
collaboration with partners in the supply chain;
sourcing and procurement, which involves
working with manufacturers to fulfill orders
according to strategic merchandising plans and
optimize cost, quality, and speed–variables that must be weighted differently as business needs,

buying plans, and market demand patterns change; managing the supply chain, which involves
handling the logistics of moving finished goods from the source into stores and overseeing global
trade and procurement requirements; selling goods across a variety of channels to customers,
which requires marketing and brand management; managing mark-downs and capturing customer
reactions, analyzing data, and using it to optimize the next phase of the design process.

The Implementation
“The implementation was outsourced to a third
party. The implementation was done by the SAP
team with help of Nova soft which is based out
of Singapore,” says Biyani. Some people from
Pantaloon also assisted in the project. About 24
qualified people worked on this SAP
implementation. SAP was chosen as the
outsourcing party on a turnkey basis. This
project was headed by Pantaloon‟s Chief
Information Technology Officer, Chinar
Deshpande.

Three Phases
SAP implementation is not a single phase process. The project was divided into three phases.
The first phase involved blueprinting existing processes and mapping them to the desired state. In
this phase, the entire project team worked on current processes within the structure of the
organization, analyzed and drafted them. This blueprint was later used in the formation of new
states of the solution. Since the SAP would combine all the processes, each and every one of these
had to be evaluated.
In the second phase, the SAP platform was developed with the help of Nova soft‟s template which
was predefined by SAP after evaluation of Pantaloon‟s needs and expertise in retail solutions.
The last phase in this project was for stores to switch over to the new system and for current data
to be ported. Before the SAP implementation, all the data was unorganized. This data had to be
migrated to the new SAP application.
The project was flagged off on 15th June 2005 and took about six months to finish. It went live at
the head office on 1st January 2006. The stores went live on SAP from 1st January 2006 to 30th
June 2006.

Benefits and Challenges

The key challenges in this project were not in
the implementation. Rather, the difficulties
were faced during the data migration and in
managing the interim period when the project
was underway for about six months. Migrating
unorganized data to an organized format is a
challenging task.
Pantaloon has not been able to see immediate
benefits from this implementation. This application certainly has long term benefits which will be
seen when the performance of various aspects will be analyzed. “It is too early to calculate RoIe.
We have already started working on MAP (Merchandise Assortment Planning), Auto-Replenishment
and Purchase Orders. We hope to use these systems to optimize our inventory and cut it by about
two to four weeks (depending on the line of business),” says Biyani.
Maintenance & Hardware
This application is currently being used by around
1,200 employees across the organization. For
maintaining this implementation and its related
applications, Pantaloon has an in-house team.
And pantaloon has outsourced ABAP resources. They
are also in the process of setting up a SAP
Competency Centre. The system runs on a HP
Superdome server on HP UNIX 11i and the database
is from Oracle. The cost of this project was about
$10 million.

Future Projects
After the successful implementation of SAP for its retail chain, Pantaloon plans to go ahead with IT
projects such as implementation of WMS with RFID, Customer Intelligence and CRM. Inventory and
Promotions Optimizations will be pursued later this year.

ERP in Services
State Bank of India
The State Bank of India (SBI), India‟s largest commercial bank,
selected my SAP™ ERP to automate and seamlessly integrate its
human capital management (HCM) processes across State Bank
Group, part of the bank‟s efforts to transform its operations
and prepare for future growth.
The enterprise resource planning (ERP) application from SAP would serve State Bank Group‟s global
strength of more than 370,000 employees and retirees, making it one of the largest HCM
implementations in the banking industry globally.
Founded in 1806, State Bank of India is India‟s largest commercial bank and a trend setter in the
Indian banking sector. SBI is the largest bank in India in terms of market capitalization, deposits,
advances and profits. With more than10,000 branches and more than 205,000 employees in over 29
countries, SBI is among the top hundred banks globally and is the only Indian Bank in the Top 100.
The State Bank Group together consists of more than 14,500 branches and 370,000 employees and
retirees.
SAP was selected to align the State Bank Group’s current human
resource management system (HRMS) with the groups‟ growing business
needs and to empower its large workforce to manage processes in a
collaborative environment. Using SAP® software, State Bank Group aims
to respond faster to market demands, enable real-time information access
and assign the right people to the right positions at the right time.

Implementation
Implementation of my SAP ERP will help State Bank Group drive
advancement and innovation in areas of human capital
management and enterprise resource planning such as e- learning,
virtual classrooms, career development and succession planning,
competency assessment, performance management and property
management.
“The decision to select SAP was based on the bank‟s requirement for an internationally renowned
solution and implementer with deep technology and industry experience, ability to manage
operational and external risks, commitment to long-term partnerships and an excellent track
record for product delivery.” said a senior officer of SBI.
“We will leverage the opportunities created by this transition to unleash the potential of the
employees and help bank in integrating, streamlining and transforming the employee processes and
to consolidate our leadership position in the marketplace and remain competitive on a global
scale.”
“As the market leader in the Indian banking sector, SBI demonstrates real leadership by leveraging
technology tools for transformation and innovation to maintain rapid business growth and market
leadership,” said Alan Sedghi, president and CEO, SAP South Asia. “With our comprehensive
portfolio of solutions, applications, technology and services for the banking and financial services
industry, SAP continues to deliver solid business transformation results to global banks for both
traditional and innovative enterprise-wide business process enablement. Going forward, we look
forward to working with SBI to expand the scope of our partnership and help the company to
achieve its business goals.”
SAP is the leading provider of mission-critical solutions to the leading banks and financial
institutions globally.

State Bank of India and Its Group

State Bank of India is the largest Bank in the country in terms of
Balance Sheet size, Profit, Number of branches and number of
employees. It is also the largest in the world in terms of number
of branches and is the only Bank from India figuring in the list of
top 100 banks in the world. The Bank offers almost every product
in the financial super market to its customers. The Bank is in
200th Year of business and has made profit for all the years.
State Bank of India and its seven Associate Banks has already developed group synergy in areas like
Real Time On-line Banking, ATM, Treasury and their IT areas. The proposed HRMS Solution would
further integrate the Human Resources operations across the group uniformly.

SAP Navigation:
SAP Log on: SAP Log on is an additional program that runs in the background which provides you to
logon on to the SAP system. This is the log on screen from where you actually log on into the SAP
system. There are various elements of this screen like-
 New Password
 Client
 User
 Password
 Language
New Password: This option gives you to change the password of user log on.SAP provide you to
change the password once a day. If you are logging on for the first time then the system ask you to
change the password.
SAP Password Setup rules:
 May be Alphanumeric.
 May be 6 to 8 characters in length.
 May not begin with SAP or PASS.
 May not begin with three identical characters.
 May not contain the sequence of characters for the respective User‟s ID.
 May only change once a day.
 May not use the previous 5 passwords for a certain User.

Client: Client is a Central organizational element, which is a Top-level structural element of a

company which will have a Separate unit with its own separate master records and complete group
of tables.
Client of this Organizational unit in an SAP system is mandatory / required. Client is a
commercially, organizationally, and technically self-contained unit within a SAP system. It has own
master records and set of tables.
Client corresponds to the number that the user types in the client field on the logon screen. A
Client is a group of users who is assigned the similar privileges.
SAP R/3 comes inbuilt with three standard client‟s viz. 000, 001 and 066.
Client: 800,810 is used for training program
The number 800 corresponds to the number of the rows within each client dependent tables within
database. i.e. 800 - Rows of client dependent tables
There are two types of the tables. They are
 Client Dependent: These tables are restricted to a particular client.
 Client Independent: These tables are portable from one client to the other.
User: Users are the persons or employee who actually assigned to the client. The end users are
people who is responsible for posting of day to day activities like posting of invoices, creation of
master records(Customer master) and generating of Reports in companies(in which SAP-ERP is
implemented) are called SAP end users.
In the user field we put our user name. It may be alphanumeric.
Password: In the password field we put our password as per SAP standard rule. It can also be
alphanumeric of 6 to 8 character in length.
Language: Here you put the language code .So that you can use the SAP system in your
respective language.
Once you log on to the SAP system the First screen you will get is “Sap Easy Access” Screen. In this
screen there are various elements that we need to be familiar about all of those various elements.
Different Nomenclatures of SAP Screen

Command Field: Command field provides you to use the transaction code to get the relevant
screen directly rather than navigating the SAP screen. In the command field we put the relevant
Transaction Code for particular SAP screen and click on tick mark from standard tool bar or
press enter then we will get the relevant screen.
Log Off: You can log off the system in various ways.There are six ways to log off the SAP
System.From the menu bar you can click the back button,ot directly you can close the screen from
the right hand corner of the screen by clicking the „X‟ sign.
Following are the few important transaction code you can use for various purposses during
navigation.

 /n to cancel the current transaction.

 /nVA01 to call transaction VA01 directly from another transaction. Without the prefix
you can only call XXXX from the SAP Easy Access Screen.
 /O to display an overview of sessions.
 /OVA01 to call transaction VA01 in a new session directly from another transaction.
 /nend to end the logon session with a confirmation dialog box.
 /nex to end the logon session without a confirmation dialog box.
 /i to delete the session, which you are currently using.
Multiple Sessions
 It is possible to create up to six sessions each time you logon to SAP System.
 Each session is completely independent of the other and allows you to run different
transactions or reports at the same time.

 To create a new session click on the “create new session” icon or use the menu path:
System / Create Session.

 Multiple sessions can then be minimized so that all are visible and can be easily restored.

 To end a session click on the exit icons or use the menu path: System / End Session.