Module -3

Overview of ERP Packages

MBA 3rd Semester ERP Lecturer Notes
Module - 1 Overview of ERP packages

Table of Contents

1. SAP R/3 - SAP ECC (Enterprise Central Component) .............................................................................2

3. BAAN ERP ..............................................................................................................................................8
4. Oracle ................................................................................................................................................. 10
5. PeopleSoft .......................................................................................................................................... 11
6. MFG/PRO - QAD ................................................................................................................................. 12
7. IFS/AVALON........................................................................................................................................ 13
8. ERP Market......................................................................................................................................... 14
9. Expected Questions ........................................................................................................................... 15

ERP Lecturer Notes | Table of Contents 1

Module - 1 Overview of ERP packages

1. SAP R/3 - SAP ECC (Enterprise Central Component)

 ERP is an abbreviation of Enterprise Resource Planning. ERP helps an enterprise or an

organization or a company to run its business effectively by planning its resources
efficiently.
 These resources may be material, manpower or services. SAP ERP integrates various
business functions of a company to eliminate the need of redundant or duplicate data
entry.
 SAP ERP stores all the activities and business functions that the users perform in its
database.
 Eventually all this data helps in making better business decisions in the form of large
number of standard reports available.
 SAP stands for Systems Applications and Products in Data Processing
 SAP is both the name of the Company as well as their ERP Product
 SAP Software was founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and
Tschira.
 SAP system consists of a number of fully integrated modules, which covers virtually
every aspect of the business management.
 SAP is #1 in the ERP market. As of 2010, SAP has more than 140,000 installations
worldwide, over 25 industry-specific business solutions and more than 75,000
customers in 120 countries
 SAP’s ERP package comes in 2 versions i.e. (SAP R/2) & (SAP R/3).(Here R is denoted for
Real time and number 3 means 3 tier application architecture i.e Database, Application
server and Client.)
 R/3 is a three-layer client/server architecture product by SAP. Database, Application and
Presentation are the three different layers.

ERP Lecturer Notes | SAP R/3 - SAP ECC (Enterprise Central Component) 2
Module - 1 Overview of ERP packages

Major Functional Modules

• FINANCIAL ACCOUNTING (FI)
• MATERIAL MANAGEMENT (MM)
• PRODUCTION PLANNING (PP)
• SALES & DISTRIBUTION (SD)
• QUALITY MANAGEMENT (QM)
• PROJECT SYSTEMS (PS)
• HUMAN CAPITAL MANAGEMENT (HCM)

FINANCIAL ACCOUNTING (FI)

• SAP FI Financials module is one of the most important modules behind SAP. It is
designed for meeting all the accounting and financial needs of an organization. Within
this module Financial Managers as well as other Managers within your business can
review the financial position of the company in real time.

ERP Lecturer Notes | SAP R/3 - SAP ECC (Enterprise Central Component) 3
Module - 1 Overview of ERP packages

• The real-time functionality of the SAP modules allows for better decision making and
strategic planning. The FI (Financial Accounting) Module integrates with other SAP
modules such as MM (Materials Management), PP (Production Planning), SD (Sales and
Distribution), PM (Plant Maintenance) and PS (Project Systems).
• FI module is formed by several sub-components, but not limited to, also known as sub-
modules. Few of them are mentioned below:
• Accounts Receivables
• Accounts Payable
• Asset Accounting
• Bank Accounting
• General Ledger/New General Ledger

MATERIAL MANAGEMENT (MM)

• It covers business functions such as procurement or purchasing and inventory
management.
• The procurement can be for materials or services. It can be either local or imports
(procuring from abroad) or both.
• Materials management (MM) is integrated with other modules such as SD (Sales &
Distribution), PP (Product Planning), FI (Financials), CO (Controlling), PM (Plant
Maintenance) and QM (Quality Management).
• Materials Management is used for channelizing procurement process and managing
inventory at store/warehouse level.
• MM (Materials Management) Module has following, but not limited to, sub modules
which are as follows:
• Maintaining Minimum Stock Level – Re Order point
• Purchasing / Procurement management
• Request for Quotation Management
• Handling Purchase requisitions generated from different modules such as PP,
PM.
• Vendor Evaluation
• Goods Receipt
• Invoice Verification
• Inventory Management
ERP Lecturer Notes | SAP R/3 - SAP ECC (Enterprise Central Component) 4
Module - 1 Overview of ERP packages

PRODUCTION PLANNING (PP)

• The purpose of PP (Production Planning) is to ensure that the manufacturing runs
effectively and efficiently to produce the goods as required by customers.
• The Production Planning module of SAP takes care of master data needed like bill of
materials, routings and work centers.
• Production planning modules caters all avenues for producing a finalized or finished
good.
• It includes the time required to set up machine, the time required to produce a single
finished good as well as catering the costs incurred in the process of manufacturing that
can be both direct and indirect costs involved in the production of a single unit of
finished goods such as: labor hours, machine hours, factory overheads that can be both
fixed or variable in nature. Also, production waste, scrap and by-products.
• The PP (Production Planning) Module has following, but not limited to, sub modules
which are as follows:
• SOP (Sales and Operations Planning) – provides tools for forecasting sales and
production planning based on historical, current and future data
• MRP (Material Requirements Planning) – relies on demand and supply elements
with the calculation parameters to calculate the net requirements from the
planning run
• Shop Floor Control – includes the processing of production orders, goods
movements, confirmations and reporting tools for production
• Capacity Planning – evaluates the capacity utilized based on the work centers
available capacity to show capacity constraints
• Product Cost Planning – is the process of evaluating all the time values and value
of component materials to determine the product cost

SALES & DISTRIBUTION (SD)

 The SAP sales and distribution is part of the logistics module that supports sales to
customers starting from quotations, sales order and all the way towards billing the
customer. It is tightly integrated with the MM (Material Management), FI (Finance), CO
(Controlling), QM (Quality Management), PS (Project Systems) and PP (Product
Planning) functional modules.

ERP Lecturer Notes | SAP R/3 - SAP ECC (Enterprise Central Component) 5
Module - 1 Overview of ERP packages

 Sales and Distribution covers both sales of goods and services. It covers business
functions starting from pre-sales such as inquiries, quotations, contracts (either quantity
or value), scheduling agreements. Sales order management, pricing, discounts, credit
management, executing sales order, creating outbound deliveries, creating invoice,
recording accounts receivables, managing credit and debit memos, complaints
management, i.e. return sales.
 The SD (Sales & Distribution) Module has following, but not limited to, sub modules
which are as follows:
o Pre-sales activities, including inquiry and quotation creation
o Managing and committing long term services and / or supply of goods
using contracts
o Sales Order processing, including Sales Order (SO) creation
o Shipping, including outbound delivery document creation
o Billing, including billing document and invoice creation
o Complaints processing, e.g. sales returns, credit and debit memos

QUALITY MANAGEMENT (QM)

 Quality Management involves business processes involving quality control and quality
checks in all aspects of supply chain management.
 Quality management is a method for ensuring that all the activities necessary to design,
develop and implement a product or service are effective and efficient with respect to
the system and its performance.
 Quality management is the comprehensive solution that supports the company
throughout the product life cycle and along the supply chain.
 SAP Quality Management (QM) module supports tasks associated with quality planning,
quality inspection and quality control through the enterprise. It sets the specifications
for quality and standard testing procedures, controls the creation of quality certificates
and manages notifications related to quality. It also stores the quality data for raw
materials, goods-in-process and finished goods.
 The QM (Quality Management) module has following, but not limited to, sub modules
which are as follows:
o Quality Planning

ERP Lecturer Notes | SAP R/3 - SAP ECC (Enterprise Central Component) 6
Module - 1 Overview of ERP packages

o Quality Inspection
o Quality Control
o Quality Certificates
o Quality Notifications

PROJECT SYSTEMS (PS)

 Project Systems module covers business processes of a Project to effectively manage
project of any size. It includes Work Breakdown Structure (WBS) elements, network,
milestones and confirmation on the progress of each phase of the project whether it is
completed or in progress and when it is scheduled to be completed, cost which is
budgeted at each phase of the project, the cost already incurred whether it is within the
budget or there is cost overrun at any stage of the project.
 PS is designed to support the planning, controlling and monitoring of long-term, highly
complex projects with defined goals. To be able to control all tasks / activities involved
in project execution an organized form is required specifically to monitor the status of
the project and which is shared with all departments involved.

HUMAN CAPITAL MANAGEMENT (HCM)

1. Human Capital Management module includes business processes involving all aspects of
company’s human resources, i.e. the employees
2. HCM module deals with the various activities carried out in the human resource
department of an organization. Such as personal administration, personnel
development, training and event management, payroll, etc. This module enables
companies to effectively manage information about the people employed and for
working for their organization

Technical Modules
1. ADVANCED BUSINESS APPLICATION PROGRAMMING (ABAP)
1.1. ABAP is the programming language of SAP ERP and is used to create customized
reports, layouts, screens, designing and developing company specific customized
printouts such as quotation, sales order confirmation, delivery note, invoice,
purchase order, etc.
2. NETWEAVER – BUSINESS APPLICATION SOFTWARE INTEGRATED SOLUTIONS (BASIS)

ERP Lecturer Notes | SAP R/3 - SAP ECC (Enterprise Central Component) 7
Module - 1 Overview of ERP packages

2.1. SAP BASIS involves SAP ERP software installation, taking timely backups, disaster
recovery, security of the SAP servers, user creation, managing roles and
authorizations of the users which includes authorization management to control
which process owner is authorized which specific set of business transactions.

Industry Specific Solutions

• SAP also offers some industry specific (IS) solutions which are unique in nature due to
complexity of their business processes. SAP IS Solutions cover industries’ best practices
and provide eminent functionality to carry out industries’ specific complex transactions
which are unique due their nature of business.
• SAP IS – Oil and Gas
• SAP IS – Utilities
• SAP IS – Retail
• SAP IS – Automotive
• SAP IS – Banking
• SAP IS – Chemicals
• SAP IS – Telecommunications
• SAP IS – Healthcare
• SAP IS – Insurance
• SAP IS – Consumer Products
• SAP IS – High Tech
• SAP IS – Higher Education and Research
• SAP IS – Life Sciences
• SAP IS – Mining
• SAP IS – Media

3. BAAN ERP
 Baan company was founded in Netherlands in 1978 by brothers Jan and Paul Baan..
 The BAAN Company is the leading global provider of enterprise business software.
 The BAAN company products reduce complexity and cost, improve core business
processes, are faster to implement and use, are more flexible in adapting to business
changes.

ERP Lecturer Notes | BAAN ERP 8

Module - 1 Overview of ERP packages

 In May 2006, BAAN was acquired by Infor Global Solutions and renamed it as Infor
ERP LN 6.1.
 Baan Company offers a collection of best-in-class, component-based applications for
front office, corporate office, and back office automation.
 The BaanSeries-based product family includes:
o Baan ERP
o BaanFrountOffice
o BannCorporateOffice Solutions
o Some of the modules of BaanERP are:
o Manufacturing Module
o Finance Module
o Project Module
o Distribution Module
Baan's product line features multi-layer architecture for maximum scalability and flexible
configuration. Applications are isolated from the systems environment. This enables the
support of new hardware, operating systems, databases, networks and user interfaces without
any modification to the application code. Baan Company supports popular UNIX platforms as
well as Microsoft NT.
Three advantages distinguish each component element within the BaanSeries-based family of
products including.
They are:
 Best-in-class components
 Evergreen delivery;
 Version independent integration.
The modules of BaanERP are:
• Manufacturing Module: It includes Bills of Material, Cost Price Calculation,
Engineering Change Control, Engineering Data Management, Hours Accounting,
Product Classification, Product Configuration, Production Control, Production
Planning, Project Budgeting, Project Control, Repetitive Manufacturing,
Routings, Shop Floor Control, Tool Requirements, Planning and Control, Capacity
Requirements Planning, Master Production Scheduling, and Material
Requirements Planning.

ERP Lecturer Notes | BAAN ERP 9

Module - 1 Overview of ERP packages

• Finance Module: It includes Accounts Payable, Accounts Receivable, Financial

Budgets System, Cash Management, Financial Reporting System, Fixed Assets,
General Ledger, Cost Accounting, and Sales Invoicing.
• Project Module: It includes Project Budget, Project Definition, Project
Estimating, Project Invoicing, Project Monitoring, Project Planning, Project
Progress, and Project Requirements Planning)
• Distribution Module: It includes Sales Management, Purchase Management,
and Warehouse Management.

4. Oracle

 Oracle Corporation was founded in 1977, is the world's second largest software
company.
 It is also the leading supplier of software for Enterprise Information Management (EIM).
 Oracle's Warehouse Technology Initiative (WTI) is the fastest growing alliance software
in the data warehousing industry.
 Oracle's integrated Business Intelligence Solutions deliver powerful capabilities to users
anywhere in the enterprise, at any time.
 Oracle’s application categories are:
 Oracle Financials
 Oracle Human Resources
 Oracle Projects

Oracle Applications is the only collection of enterprise business applications from a major
Enterprise Resource Planning (ERP) vendor that follows the Internet Computing (IC) model.
Each of the over 45 modules for human resources, financials, manufacturing, supply chain, and
front office automation is web-enabled. It also allows the modules to be deployed on corporate
intranets with no software, other than a browser, required on users’ desktops. This
architecture allows organizations to shift the complexity of application management,
maintenance, and upgrading from users' desktops onto centralized, professionally managed
servers

ERP Lecturer Notes | Oracle 10

Module - 1 Overview of ERP packages

Oracle Applications is a collection of enterprise business applications from a major Enterprise

Resource Planning (ERP) vendor that follows the Internet Computing (IC) model.
Some of the other Oracle application categories are’
o Oracle Manufacturing
o Oracle Supply Chain
o Oracle Front Office

5. PeopleSoft

1. PeopleSoft Inc. was established in the year 1987.

2. It provides innovative software solutions that meet the changing business demands of
enterprises worldwide.
3. PeopleSoft develops software that supports enterprise wide solutions to handle core
business functions.
4. People Tools is an integrated set of client/server business application development and
customization tools from PeopleSoft.
5. Some of its applications are,
1. Self-Service Applications
2. Web Client
3. Multi-layer Transaction Processing
4. OnLine Analytical Processing (OLAP)
5. Workflow
Some of its solutions are,
• Business Management Solutions
• Commercial Solutions
• Industry Solutions
Business Management Solutions:
• Human Resources Management
• Accounting and Control
• Treasury Management
• Performance Measurement
Commercial Solutions:

ERP Lecturer Notes | PeopleSoft 11

Module - 1 Overview of ERP packages

o Supply Chain Management

o Service Industry Solutions:
Industry Solutions:
• Communications
• Federal Government
• Financial Services
• Healthcare
PeopleSoft continually adds and refines technology to optimise their customer’s information
systems. They help customers take advantage of new and emerging technologies, giving them
more choices and freedom to develop their own innovative business processes. Some of them
are given below:
• Self-Service Applications
• Web Client
• Multi-layer Transaction Processing:
• OnLine Analytical Processing (OLAP)
• Workflow

6. MFG/PRO - QAD

• QAD was founded in 1979 and now has a presence in 21 countries and employs more
than 1100 people.
• The company's products include MFG/PRO, On/Q, Service/Support
• Management, Decision Support, and Qwizard.
• The company's flagship product is its ERP solution MFG/PRO.
• Some of the modules of MFG/PRO are,
• Distribution
• Manufacturing
• Financials
• Service/Support
• Supply Chain
• Master Files

ERP Lecturer Notes | MFG/PRO - QAD 12

Module - 1 Overview of ERP packages

Modules
MFG/PRO of QAD is a fully integrated software package available on a module by module basis.
MFG/PRO addresses the entire manufacturing band from repetitive to configure-to-order. It is
appropriate for batch process like make-to-stock, configure-to-order, and repetitive
manufacturing environments. With world class supply chain management tools, it is
particularly useful for multinational companies. The various modules of MFG/PRO are:
• Distribution: The Distribution Modules (DM) of MFG/PRO are used to monitor inventory
balances and manage purchasing and sales order entry activities.
• Manufacturing: The Manufacturing Modules (MM) are used to regulate all
manufacturing activity within the various types of production environments.
• Financials: The Financial Modules (FM) interface with the Distribution, Planning and
Manufacturing modules to report the financial implications of the company's activities.
• Service/Support: Service/Support Modules (SM) are designed for companies which not
only manufacture and sell their products, but also offer after-sales service and support.
• Supply Chain: Supply Chain Management (SCM) is the control of goods and information
from supplier to customer.
• Master Files: Master File’s (MFs) functions provide access to a series of foundation
modules that are used by the rest of the MFG/PRO applications. These master files
include: Inventory Control Settings, Items/Sites, Addresses/Taxes, Physical Inventory,
Multiple Database configurations, and Manager Functions.

7. IFS/AVALON

• IFS (Industrial and Financial Systems) is an international company providing ERP

solutions to the manufacturing community.
• IFS’s solutions have been successfully implemented around the globe, from fortune 500
companies to small/medium sized enterprises.
• IFS ERP software is designed with best practise standard tools such as Oracle and
rational rose.

Modules
• Financials
ERP Lecturer Notes | IFS/AVALON 13
Module - 1 Overview of ERP packages

•
•

8. ERP Market

• ERP market is very competitive and one of the fastest growing(TECHNOLOGICAL

ADVANCEMENT)
• A research made by AMR consulting & Research group states ERP market expected to
grow at 10% growth rate for 5 years from 2009.

• For large scale industries Market is captured by SAP, ORACLE CORP.,JD EDWARDS

• For Medium scale industries huge potential for “battleground "with industry specific
software

• The Indian ERP is expended to grow at compounded annual growth of 25% over net,
the market $ 83 million 2004 and forecasted to be over 250 million 2009.
• Scenario is slightly different, with the Indian ERP package Ramco’s marshal
accounting for 9% of market share and in India too SAP is the market leader with 20%
market share.
• According to a survey ERP does not appear to be new to the India market. This is
indicated by the proliferation of solutions, which have been implemented.
• According to AMR Research the leading industry and market analysis firm specializing
in enterprise application and enabling technologies ERP software market will grow at
a compound annual growth rate of 37 per cent for next five years the total company
revenue will grow by $52 Billion.

Name of ERP ERP share (%)

SAP 20
QAD 10
JD Edwards 10
SSA 10
Ramco 9
Oracle 7

ERP Lecturer Notes | ERP Market 14

Module - 1 Overview of ERP packages

Baan 7
MAMIS 4
Others 23

9. Expected Questions

1. What are ERP packages? Briefly explain 3 ERP packages?

2. What is SAP, how it is connected to ERP?

3. What are the different functional modules of an ERP systems?

4. Explain the functions, sub-systems and features of the financial module?
5. Explain the functions, sub-systems and features of the HR module?
6. Explain the functions, sub-systems and features of the Sales and Distribution module?
7. Explain the functions, sub-systems and features of the Manufacturing module?
8. Explain different functional modules available in SAP or BAAN or Oracle.
9. Explain Sales and Distribution process of ERP system?
10. Draw a matrix showing functionality provided by the various prominent (at least three) ERP
packages?
11. Give an overview of the ERP market?
12. What are the factors responsible for continued growth of ERP?
13. Explain with an example the automation of business processes achieved by ERP systems.
14. How is an ERP system different from old computerized information systems?
15. Rank the various ERP packages in the order of their Market share. In your opinion, is “ERP
domain shrinking or expanding”? Give reason for your answer. Is the same comment true
for various individual packages as well?
16. Having been entrusted with the responsibility of convincing your senior management about
going for an ERP solution, make a presentation covering various aspects such as the present
trend, benefits of an ERP system over any legacy system, the risks involved, and scope of
outsourcing support.

ERP Lecturer Notes | Expected Questions 15