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SAP NetWeaver Newbie

SAP ECC and Modules Explained in Simpler Terms

SAP is the German company that owns these products which were started in the early 70s, roughly translated to systems, applications and products (in data processing).

SAP is the global leader in Enterprise Resources Planning - the main system designed to store all data for across most (if not all) departments for any (large) corporation.

An example is a retail store - has inventory, has product descriptions/prices/discounts, etc. vendors where product bought from, customers, sales for the day etc. now apply that to 1000s of products, millions of sales, hundreds of stores, multiples of vendors per product, 1000s of customers, etc etc. it generates an extremely large amount of data across various areas of the business - many accountants to look after the sales, a lot of HR/payroll to manage and schedule stuff, staff to manage inventory and delivery etc.

And that's just one industry, SAPs core product, its ERP system, is called ECC6 and was previously called R/3 and some outdated companies are still using ECC 4.x. Its core job is to be able to keep track of the company's transactional data - data that the business generates. It doesn't just focus on one area like how MS Office has separate applications like Word and Excel, but it allows different areas to use same data but also have that data displayed in a way that's relevant to that area.

In the example for Retail, the co. buys products from vendor via a purchase order, the vendor then generates a delivery to one of its stores, the store is aware delivery will be in a week, HR schedule extra staff to handle the increased work load and inventory in store, accountants pay the invoice of the vendor, the marketing team creates an ad to promote product with a sale campaign.

In this example, say you use one product, throughout the systems that same data is reused over and over, but from an advanced user's point of view, they can track that product's history from beginning to end and also analyse that information. Analysis such as vendor gave 10% discount on wholesale price compared to last purchase. Less inventory due to demand, better sales etc. can use the analysis to predict future market demands, plan for more inventory or better sales etc.

Although ECC6 is costly to license, implement and maintain (Starting price of $10 million out of the box), due to its ability to handle large amount of transactions, global support and built in smarts, in the long run it saves a company a lot of money as well as help make money.

As mentioned, ECC6 helps many departments of a company to record their data such as payroll/HR, supply chain, sales, accountants, etc. ECC6 too have separate modules that align to a business area.

Various SAP ECC Modules

SD is short for Sales and Distribution, and refers to (depending on what kind of industry the business is in) the following types of business transactions - quotes, sales order, shipping, delivery, invoices, etc.

MM refers to Materials Management i.e. product/material (if a manufacturing business) details, bar code, size, etc, inventory, purchasing or making of product, etc.

WM is Warehouse Management to do with receiving goods, storing good sending goods to relevant sites, inventory management etc.

With regards to SD/MM, some modules are dependent on each other, e.g would be: you cannot sell a product you don't have or don't know anything about etc.

From my ECC6 experience, most main modules interact, SD & MM are major modules, but HR/Payroll is a stand alone module due to the sensitivity of its data. You might able to view which employee say goods receipted a delivery or was the cashier who sold the product, but you would not be able to see their pay or personal bank details if you do not have the relevant authority.

ABAP is the underlying programming language used by SAP in ECC6. It takes the data provided, record the data in relevant table(s), apply logic to data, transform data, display data, etc. like any other programming language, just different syntax and tools specific for it. I pretty much described the works of the software industry at the core of it, SAP just does it on a grander/corporate/global scale.

ECC6 is a complex and large application to handle various areas of various INDUSTRIES* which is built on top of an enterprise database which is then has been built on multiple ($500k+) servers and designed to be used by a large company's employees at the same time doing various business tasks on large amounts of data.

*based on your industry, licensing terms, configuration, ECC6 is designed differently for each industry.

The idea of an ERP is to have all business data in one place, but this is evidently difficult as SAP ECC6 even though to a degree can do the below other functions, has separate enterprise applications:

Business Intelligence - takes the required transactional data out of ECC6 to allow focused analysis and reporting, geared at management level. Ex: how much sales done this year compared to last and how to increase sales, etc.

Process Integration - is a middleware application, takes data from ECC6 and transforms (as required) and transmit the data by required communication to other SAP systems or to 3rd parties and back ie sending purchase requests to vendors in China that doesn't use SAP.

Customer Relationship Manager - manages the usual customer information, but also their purchase history, discount rate, orders, etc. Help manage customer loyalty programs, analysis into customer behaviour to encourage repeat customers.

Master Data Management - manages various master data (as opposed to transactional data) with an easier to use interface as well as transferring data (with the help of PI) to 3rd parties. Also it can accept the storing of non standard data such as images, videos, pdfs, etc.

Source: reddit/r/sap

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