SAP R/3 Business Blueprint: Understanding the Business Process Reference Model

Description

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Let SAP's R/3 change the way you think about business engineering

This book is a businessman's bible about business process design. Using SAP's leading enterprise software product R/3 as a backdrop, it is the first book to explain the structure and content of common business processes that management deals with on a daily basis.

The authors paint the future of business process change by giving the reader the terminology, content, and technology behind an evolving standard for enterprises in the new age(the business blueprint. Here is a collection of process and object descriptions that are the basis for streamlining your company in the future. The book explains how to understand the process content of systems like R/3 and apply it to your company.

Most business software is applied on top of existing structures, to mimic old-fashioned methods and procedures. R/3 allows users to design and model processes all along the value chain, crossing functional and organizational boundaries, to achieve true integration.

SAP R/3 Business Blueprint uses three main sections to present this paradigm in a style that is accessible across the organization:

• Business Engineering sketches the big picture for high-level decision makers, without getting bogged down in technical detail. Senior managers can gain familiarity with the major features and tools available under R/3, and learn the most important aspects of its evaluation and implementation.
• Process Design details R/3's applications to such specific fields as sales, production, finance, and human resources. Practical business process scenarios are used throughout the book to show R/3 in action in a variety of settings.
• Architecture, Framework, and Tools provides nuts-and-bolts information for IS professionals. A thorough overview of the technical specifications and structure shows how organizations can easily implement R/3 to improve stabilization and communication across departments and processes. In particular, this book explains the impact of new technologies such as Windows( NT( and the Internet on future business process design. It considers the scenarios that companies will need to integrate based on a common business process understanding.

Developed by an international team, SAP R/3 Business Blueprint draws on nearly a decade of client/server history in organizations around the world to present a complete, inside look at this powerful tool for enterprise-wide business engineering.

Sample Content

Table of Contents

Foreword


Introduction.

What Is SAP? What Is R/3? What Is the R/3 Reference Model? Who Uses R/3? How Do Customers View R/3?xxvii Conclusion.

I. BUSINESS ENGINEERING.

Significance of Business Engineering. Principles of Business Engineering. Objectives of Business Engineering. Benefits of Business Engineering. Business Engineering with Information Technology. Integration of Information Technology. Developments in Information Technology. Client/Server Technology. Benefits of Client/Server Technology. SAP and Client/Server Technology. Conclusion.

Pros and Cons of Business Blueprints. General Design of the R/3 Blueprint. Focus of the R/3 Blueprint. Event-Driven Process Chain Methodology (EPC). Describing Complex Business Processes. EPC Methodology and Viewpoints in the R/3 Reference Model. Summary.

Standard Software Implementation Issues. Mapping with the Business Blueprint. Redlining the Blueprint. Extending the Business-Process Design. Implementation Case Studies. Conclusion.

II. PROCESS DESIGN.

The Value Chain Principle. R/3 and the Value Chain. Overview of Part 2: Value Chain Thinking.

Standard Order Handling Scenario. Contract Handling. Third-Party Order Handling. Customer Consignment Stock Handling. Cash Order Handling. Rush Order Handling. Decentralized Shipping. Sales and Distribution Examples.

Production by Lot Size. Repetitive Manufacturing. Make-to-Order Production. Process Manufacturing. Project-Related "Engineer to Order". Quality Management for Goods Receipt from Production. Production Logistics Example: Autodesk Incorporated, Sausalito, California.

Processing Stock Material Scenario. Processing of Consumable Material. Management of Consignment Stocks. Subcontract Order Processing. Stock Transfer Processing. External Services Management. Materials Management Examples.

Vendor Processing. Customer Processing. OTA Vendor Processing. Creditor Subsidiary/Head-Office Processing. General Ledger Processing. Special-Purpose Ledgers Processing. Consolidation. Customer Example: Syntex Corporation, Palo Alto, California, and Maidenhead, England.

Personnel Management. Business Event Processing. Travel Expense Processing. Time Management Processing. Payroll Processing. Salary Administration. Benefits Administration. Customer Example: The Wellmann Group, Enger, Germany.

Cost Object Controlling. Profitability Analysis. Profit Center Accounting. Overhead Cost Management. Customer Example: Convex Computer Corporation, Richardson, Texas.

Planned Plant Maintenance. Plant Maintenance Due to Damage. Project-Related Plant Maintenance. Cash Management. Budgeting. Fixed Asset Processing. Leased Asset Processing. Customer Example: Chevron Products Company, U.S.A.

III. ARCHITECTURE, FRAMEWORK, AND TOOLS.

R/3 and the Distributed Environment. The Three-Tier Client/Server R/3 Architecture. Benefits of the R/3 Three-Tier Client/Server. Interprogram Communication. Middleware Transaction Management. Rationale for Distributed Business-Process Integration. Capabilities of Application Distribution in R/3. Tools for Application Distribution. Conclusion.

Background of Business Integration. SAP Business Framework. Repository as Integrating Factor. Enterprise Application Development. Conclusion.

R/3 Business Engineer Overview. Benefits of the R/3 Business Engineer. Modeling and Configuring the Enterprise. Using the R/3 Reference Model. Guideline for Implementing R/3. Project Management. Workflow and Personnel Organization. Open Repository Interface. Business Engineer: Future Vision.

Electronic Commerce. New Age Application Components. R/3 Internet Application Scenarios. The Industry Reference Model, Process Configuration, and Vertical Markets. Autonomous Software Agents. Conclusion.

Preface

Preface
This book is intended for the wide range of business professionals who are interested in knowing more about process orientation in business and the implementation of these concepts in R/3, SAP's client/server business application suite. It provides an inside look into the conceptual framework and strategy behind SAP's business engineering initiative. Most of all, the book explains the fundamentally different approaches to business change between the use of process model templates and the consulting method known as business-process reengineering, which promotes a zero-based business analysis and modeling.

Based upon our research and experiences, we have found that business professionals too often maintain an “at war” mentality toward their data processing departments and systems. Fed up with the jargon garden of technospeech and sick of the endless meetings needed to get everyone reading from the same page, business professionals, line managers, and system users crave a consolidated knowledge-based system that describes business processes in their own terms. This need was the spark that ignited the ideas in this book. Companies are paying millions to professional consultants to “implement” standard business processes, and yet there is no common language on which to base their discussions or their process descriptions.

A guide to the Reference Model of the R/3 system, this book is written for business executives, senior decision makers, business engineers, and members of R/3 evaluation and/or implementation teams, along with students and academicians devoted to understanding business and information technology. We have attempted to make the book specific enough to satisfy the expert, but general enough to provide a good overview for the capable newcomer. Our main objectives are to:

• Help senior decision makers understand the business benefits of the R/3 Reference Model
• Explain the methodology behind the Business Blueprint
• Examine the human and organizational requirements for change
• Provide detailed descriptions of key business-process scenarios so that business people can determine if a particular scenario applies to their business
• Describe the features and tools available for the evaluation and implementation of R/3
• Document for the first time the deep process knowledge contained in the R/3 system and use it as a benchmark for explaining business in general
  
  For business leaders either currently or about to be involved in new business design, this book will explain SAP's Business Blueprint. To that end, we have labored to explain the R/3 Reference Model clearly, keeping the big picture in mind, especially for those who do not want to get too bogged down in technical detail. Part 1, Business Engineering, examines the business theories behind the R/3 Reference Model and its implications for optimizing business. Where possible, we draw on real business examples and interviews with some of the most successful R/3 implementers around the world.
  
  Part 2, Process Design, will be of special interest to business users working in the fields of sales, production, procurement, controlling, finance, human resources, and asset management. This section works through a number of organizational and functional scenarios and explains how the R/3 system aids in the streamlining and structuring of key processes of different business areas. We cover primary value activities such as sales and distribution, production planning, procurement, and external accounting. We then move on to the supporting value activities, human resources management, business planning, finance, and controlling. Here and throughout, we draw from many real-life examples of how various companies have put R/3 to use.
  
  For the IS staff member, programmer, or developer engaged in business design, Part 3, Architecture, Framework, and Tools, describes where R/3 fits in the overall scheme of information technology and enterprise application systems. We first explore middleware transaction management and application distribution in R/3. We then discuss the framework and infrastructure, focusing especially on the R/3 Repository and Business Framework. Finally, we examine the Business Engineer, SAP's latest platform for planning and configuration applications.
  
  The last chapter documents the momentous change in application landscape that is being driven by business blueprints and the plethora of new technology alternatives ushered in with the advent of the Internet. We call this the New Age Enterprise, a future vision for how SAP and others will need to adapt their products in this new era. In the New Age many common business practices and theories will change, but the most prominent will involve business-process thinking and the assembly and delivery of applications. This challenge will be a significant one for SAP and its counterparts in the enterprise software industry.
  
  On one hand, this book provides a comprehensive overview for those who are currently considering SAP as a solution for their business reengineering problems. On the other, for those who are already familiar with R/3 and would like to know more, we offer a holistic approach to explaining how key parts of the R/3 system are integrated. Ultimately, we hope to satisfy in part the growing need in the current business community to know more about business engineering with R/3.
  
  The customer quotations in this book stem from a comprehensive market research survey conducted by TCManagement. This work was the basis for SAP's positioning and product development in business engineering. We gratefully acknowledge the kind assistance of SAP AG.
  
  The authors would like to thank Peter Zencke for his understanding of Business Engineering and the concepts behind it; Hasso Plattner for his vision of Enterprise Software; Paul Wahl for his insights into market drivers and customer needs; all SAP development managers, especially Dennis Ladd, Stefan Meinhardt, Wolfgang Zuck, Carsten Dirks, and Kenicho Shimizu, who provided guidance on technical issues and future R/3 development; industry analysts Barry Wilderman (Meta Group) and Erik Keller (Gartner Group) for their insights into the future; Lesley Constans for her research, writing, and customer interviews; Hendrik Mager, HŒkan KŠllberg, and Frank Wittmann for examples of technology architecture and framework discussions; Jill Wagner, Thomas Teufel, and Max Bezahler for their understanding of how the Business Blueprint is used in consulting and software sales; Peter Mullen (Visio Corp.), Piet Christiansen (IntelliCorp Inc.), and August Wilhelm Scheer (IDS Inc.) for their insights into third-party products development; and Heike Matz for all the graphics contained in this book. Special thanks go to Andrew Ladd for his patient support and professional writing. Without him this book would have never appeared. Lastly we thank the staff of our publisher, Prentice Hall, for their guidance and support along the way.
  
  

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