Review of Enterprise Resource Planning (ERP) Systems PDF

**Review of Enterprise Resource Planning (ERP) Systems** **Enterprise resource planning(ERP)** - is a business software that collects information from different departments to enable leaders to monitor the company with detailed analytics and reporting. It unifies crucial functions such as finance,...

**Review of Enterprise Resource Planning (ERP) Systems** **Enterprise resource planning(ERP)** - is a business software that collects information from different departments to enable leaders to monitor the company with detailed analytics and reporting. It unifies crucial functions such as finance, manufacturing, inventory and order management, sales and marketing, project management, and human resources. It is In choosing an ERP, businesses must understand the capabilities, implementation models, integration requirements, and total cost of ownership of available software providers before utilizing one. **SAP (System Applications and Products) SE** - is the market leader for enterprise application software. It is a German multinational company that pioneered software. SAP lets companies streamline processes, use live data, predict customer trends, and connect entire businesses. **SAP -** was founded in **1972** for the development of real-time data application software. They introduced various versions since then, such as SAP R/2, SAP R/3, SAP ERP, SAP Business Suite 7, SAP HANA, and SAP S/4HANA. **SAP ERP -** is the standard ERP solution for companies worldwide. It enables a company to support and optimize its business processes and allows the collection of logically related transactions within identifiable business functions. **SAP S/4HANA** - SAP's strategic goal has been to develop a next-generation ERP package, such as an integrated management system based on proven business practices and meet the requirements of the digital transformation era consisting of all-encompassing digitization of the economy. This results in **SAP S/4HANA.** It is the next-generation Business Suite and the biggest innovation since SAP R/3. It is the digital core of the company that enables digital transformation. **SAP ERP** - is designed to strengthen companies of every size in various industries, while SAP S/4HANA caters more to large, enterprise-level organizations. **SAP Fiori -** It is a design system and a user experience (UX) layer that allows business app creation with a consumer-grade user experience. It makes casual users into SAP experts with simple screens that run on any device. SAP Fiori provides a user interface for SAP S/4HANA. It has three (3) application types: - - - Data Types These are data types that can be used and found in SAP S/4HANA. - - - The business transaction record is a **'document**,' which includes predefined information from the master data and organization entities. Examples of documents are sales documents, purchasing documents, material documents, and account documents. As Global Bike is a process-centric organization, the two prefer to think of the processes they are responsible for rather than the company\'s functional areas that report to them. Given this, Peter is responsible for **Idea-toMarket** and **Build-to-Stock**, and John is responsible for **Order-to-Cash** and **Service & Support**, as well as the supporting services for all four (4) key processes The following are the observed strategies found in the Global Bike case study: 1. 2. 3. 4. SAP Modules (SAP SE, 2022) Review SAP S/4HANA modules and their organizational units, master data, and processes. **Sales and Distribution (SD) -** It allows organizations to store and manage customer- and product-related data. The functionalities include sales support, sales, shipping and transportation, billing, credit management, and foreign trade. Organizational Units: - - - - - Master Data: - - - Processes (Sales Order): 1. 2. 3. 4. 5. 6. 7. 8. **Materials Management(MM) -** It is concerned with helping organizations with material and inventory management and warehouse management in the supply chain process. It also deals with all tasks in the supply chain, such as consumption based planning, vendor evaluation, and invoice verification. Organizational units: - - Master Data: - - Processes (**Procure-to-Pay**) 1. 2. 3. 4. 5. 6. 7. 8. **Production Planning and Execution (PP)** **Production Planning** - aligns demand with manufacturing capacity in creating production and procurement schedules for the finished products and component materials. As a module, SAP PP tracks and records the manufacturing process flow such as the planned and actual costs and good movement from the conversion of raw material to semi-finished goods. Organizational unit: - Master Data: - - - - Processes (**Production Planning**): 1. 2. 3. 4. 5. Processes(**Manufacturing Execution**): 1. 2. 3. 4. 5. 6. 7. 8. 9. **Financial Accounting(FI)** It is designed to collect transactional data for preparing the standard portfolio of reports. These reports are primarily, but not exclusively, directed at external parties. Organization Units: - - Master Data: - Processes: 1. 2. 3. **Controlling (CO)** It is designed to collect transactional data for preparing internal reports to support decision-making within the enterprise. It provides methods for slicing and dicing data to view costs from an internal management perspective and gives a view of profitability beyond basic financial reporting. Organization Unit: - Master Data: - - - Processes: 1. 2. **Human Capital Management (HCM) -** is a variety of practices and applications used for recruiting, managing, and developing an organization's human capital or workforce. SAP HCM software is the systems and solutions used to accomplish and optimize tasks and support organizational goals and is often referred to as human resources management systems (HRMS). This SAP module is needed as the demands placed on human resource (HR) teams are greater than ever, given how a workforce is now more diverse and geographically distributed. Employee expectations have also changed, with experience becoming a significant factor in employee recruitment and retention. The HCM module helps HR adapt and meet evolving needs and expectations. HCM Organizational Structure (SAP SE, 2022) An **organizational structure** represents the structural and personnel organization of a company, consisting of organization units. It illustrates hierarchies and an employee\'s responsibility. The HCM organizational structure consists of three (3) parts: Enterprise, Personnel, and Organizational Plan. **Enterprise Structure** It represents formal and financial structures in a company. Each employee must be assigned to an enterprise structure. Here are the organizational units in the HCM Enterprise Structure: - - - - **Personnel Structure** It describes an employee's position within the company. It is defined by employee group and employee subgroup. - - **Organizational Plan** It describes in which function an employee is acting. It is object-oriented, and each element is represented by an object which can be assigned to each other - - - - - **HCM Master Data (SAP SE, 2022)** Here are the following master data involved in SAP HCM. **Personnel Number** It is the central employee identifier in SAP assigned by the system or manually. It comprises up to eight (8) digits. All employee data in the system is identified based on their personnel number. **Reference Personnel Number** It helps map different contractual relationships. It recreates an existing employee in the system with a new personnel number. The old personnel number serves as a reference personnel number. Certain data can be copied and assigned to the new number In case of concurrent employment, the employee will be identified using a personal ID. **InfoTypes** These are collections of logically linked data fields wherein HR master data are structured. They process employee data in an effective structure based on business requirements. Each InfoType has an explicit four digit ID, such as InfoType Addresses 0006. Other characteristics of Info Types: - - - HCM Processes (SAP SE, 2022) Here are the processes included in SAP HCM 1. 2. 3. 4. 5. 6. 7. 8. **Organizational Management** It models the organizational structure of the enterprise. It also analyzes an organizational unit to define workforce requirements and personnel cost planning. Other functions include: - - - - **Personnel Administration** It is concerned with creating and maintaining personnel master data. It sets the data basis for other processes in Human Resource Management and reporting. It has **plausibility checks** to detect errors and prevent incorrect data transfer. It also has an automatic history created when changing master data for reporting and verification of data integrity. IT2406 02 Handout 1 \*Property of STI Page 4 of 6 **Recruitment** The recruitment process objective is to employ personnel with all the required qualifications. In general, there are two (2) types of recruitment: external and internal. In external recruitment, people search for an external market for skilled personnel. In internal recruitment, HR looks for personnel within the company for a certain position. The recruitment process starts from Vacancy, Job Advertisement, Applicant Data, and Profile Match, to Hiring an Employee. A database for applicants is developed in this process, including the administration of vacant positions. Maintaining **applicant data** is done in InfoTypes using the Initial Data Entry or Application Actions in SAP Fiori. Applicants are assigned to the elements of the application structure: - - In SAP HCM, two (2) types of selection procedure are distinguished: Global Selection Procedure and Selection Procedure for each Vacancy. The **Global Selection Procedure** lets every registered applicant partake in the selection procedure. A decision is made if the applicant is to be hired. If the applicant is not selected, they can join the selection procedure for vacancies. An overall status determines the level of the applicant in the global selection procedure. With the **Selection Procedure for Every Vacancy**, the applicant is assigned only to special vacancies. The status of vacancy assignment describes the level of the applicant in the selection procedure for a vacancy. **Personnel Development** Its goal is to qualify employees for current and future needs and provide long-term employee benefits. The personnel development system supports the HR department in planning and administrating teaching and development actions. Furthermore, it records the qualifications of employees and can show deficits in their skills. **Qualification -** can be connected to persons or positions and needs to be attached to attributes. It can have a half-life period or a validity period. Qualifications are defined in the qualifications catalog maintained in Customizing. The catalog structure may consist of qualification groups that classify similar qualifications. **Requirements -** are qualifications, knowledge, and experiences that can be attached to positions. It is created with a characteristic. A comparison is made between employee qualifications and the position requirements in this process. It is called **profile matchup**, which helps identify further training needed. With profile matchups, positions and jobs can be compared to each other. The difference between the requirement characteristic and qualification characteristic is also determined, which leads to three (3) possible results: - - - **Talent Management** -This process involves career planning arrangements and succession planning accomplishments. It generates general and individual development plans. **Career Planning** - identifies career goals such as by defining and developing special stations of a career (job, position, and course of instruction). It includes comparing qualifications with requirements of one station of a career to personnel decisions and courses of instruction. **Succession Planning** - assures continuity in personnel allocation for key positions. It includes proactive search for candidates to reallocate key positions. It gives a well-directed preparation for the adoption of the next job. **Development Plans -** summarize teaching and other educational actions to achieve special qualifications. It describes further training and general training events that an employee may need during their career. A differentiation exists between general and individual development plans. General development plans are guidelines for several employees, whereas individual development plans are developed for a special employee. **Performance Management -** It defines the objective setting between the enterprise and employees. It evaluates the benefits of employees to form feedback used to answer whether the goals are achieved. With goals, higher motivations and better benefits such as adjusting bonuses must be applied, although it must also be supervised. In SAP, performance management controls and constructs performance appraisals and/or objective settings between a company and its employees. The appraisal results are the foundation for eventually compensating employees for good work. The appraisal process starts with feedback, then, compensation adjustment, and lastly, planning, where goals are agreed upon. Within the planning of appraisals, enterprise, and individual goals are set between the employee and management. Then, feedback is given in the form of an appraisal, which evaluates the benefit of the employees with the expected goals. Individual and group appraisals and 360° feedback mechanisms can be used. Development events and compensation adjustments are determined after this feedback. To display a performance feedback process, appraisals and objective settings may have different statuses: - - - - - **Personnel Controlling** It enables the creation of reports from a flood of data within Human Resource Management (HRM). Data needed for a report can arise from a single or several HR processes. SAP HCM allows reports and analysis for evaluating certain data, making simple employee lists and complex business calculations available. Personnel Controlling within SAP HCM facilitates the creation of cyclic reports and spontaneous report requests that can be compared to create a forecast. This process includes the following tools: - - - - - **Employee Self-Service (ESS) -** It is a web-based user interface for employees that enables the time and location-independent maintenance of personal data. It also provides access to administrative functions that other departments usually access. Employees can do the following activities using ESS: - - - - - - - - **Manager Self-Service (MSS)** - It is a central web-based access point for managers. It uses the backend systems of the human resources and finance departments and supports the management with enterprise-wide relevant information. Managers can do the following activities using MSS: - - - - - -