SAP R/3 is the former name of the main enterprise resource planning software produced by SAP AG. Its new name is SAP ERP.

History of SAP R/3

The first version of SAP's flagship enterprise software was a financial Accounting system named R/1. (The "R" was for "Real-time data processing"). The pronunciation is often mistakenly referred to as "sap", as in tree sap. The correct naming is the individual letters S-A-P. This was replaced by R/2 at the end of the 1970s. SAP R/2 was a mainframe based business application software suite that was very successful in the 1980s and early 1990s. It was particularly popular with large multinational European companies who required soft-real-time business applications, with multi-currency and multi-language capabilities built in. With the advent of distributed client-server computing SAP AG brought out a client-server version of the software called SAP R/3 that was manageable on multiple platforms and operating systems, such as Microsoft Windows or UNIX since 1999, which opened up SAP to a whole new customer base. SAP R/3 was officially launched on 6 July 1992. SAP came to dominate the large business applications market over the next 10 years.

SAP R/3 Release 4.0B Release Date June 1998

SAP R/3 Release 4.5B Release Date March 1999

SAP R/3 Release 4.6B Release Date Dec 1999

SAP R/3 Release 4.6C Release Date April 2001

SAP R/3 Enterprise Release 4.70 Release Date March- Dec 2003

Organization

SAP R/3 is arranged into distinct functional modules, covering the typical functions in place in an organization. The most widely used modules are Financials and Controlling (FICO), Human Resources (HR), Materials Management (MM), Sales & Distribution (SD), and Production Planning (PP). Those modules, as well as the additional components of SAP R/3, are detailed in the next section.

Each module handles specific business tasks on its own, but is linked to the others where applicable. For instance, an invoice from the Billing transaction of Sales & Distribution will pass through to accounting, where it will appear in accounts receivable and cost of goods sold.

SAP has typically focused on best practice methodologies for driving its software processes, but has more recently expanded into vertical markets. In these situations, SAP produces specialized modules (referred to as IS or Industry Specific) geared toward a particular market segment, such as utilities or retail.

Using SAP often requires the payment of hefty license fees, as the customers have effectively outsourced various business software development tasks to SAP. By specializing in software development, SAP hopes to provide a better value to corporations than they could if they attempted to develop and maintain their own applications.

Technology

SAP R/3 is a client/server based application, utilizing a 3-tiered model. A presentation layer, or client, interfaces with the user. The application layer houses all the business-specific logic, and the database layer records and stores all the information about the system, including transactional and configuration data.

SAP R/3 functionality is structured using its own proprietary language called ABAP (Advanced Business Application Programming). ABAP, or ABAP/4 is a fourth generation language (4GL), geared towards the creation of simple, yet powerful programs. R/3 also offers a complete development environment where developers can either modify existing SAP code to modify existing functionality or develop their own functions, whether reports or complete transactional systems within the SAP framework.

ABAP's main interaction with the database system is via Open SQL statements. These statements allow a developer to query, update, or delete information from the database. Advanced topics include GUI development and advanced integration with other systems. With the introduction of ABAP Objects, ABAP provides the opportunity to develop applications with object-oriented programming.

The most difficult part of SAP R/3 is its implementation, since SAP R/3 is never used the same way in any two places. For instance, Atlas Copco can have a different implementation of SAP R/3 from Procter & Gamble. Some companies may run multiple productive clients/systems or even multiple instances of SAP R/3. This is seen, for example, when a company running SAP acquires a new business already running SAP. They may elect to keep both systems separate, migrate one into the other, or migrate both onto a completely new instance.

The system landscape is ultimately the customer's decision. There are definite pros and cons on the continuum from single global instance / productive client (master data, impact of configuration changes on multiple business units) to separate instances per business unit (hardware costs and communication between instances/clients)

Two primary issues are the root of the complexity and of the differences:

• Customization configuration - Within R/3, there are tens of thousands of database tables that may be used to control how the application behaves. For instance, each company will have its own accounting "Chart of Accounts" which reflects how its transactions flow together to represent its activity. That will be specific to a given company. In general, the behavior (and appearance) of virtually every screen and transaction is controlled by configuration tables. This gives the implementor great power to make the application behave differently for different environments. With that power comes considerable complexity.
• Extensions, Bolt-Ons - In any company, there will be a need to develop interface programs to communicate with other corporate information systems. This generally involves developing ABAP/4 code, and considerable "systems integration" effort to either determine what data is to be drawn out of R/3 or to interface into R/3 to load data into the system.

Due to the complexity of implementation, these companies recruit highly skilled SAP consultants to do the job. The implementation must consider the company's needs and resources. Some companies implement only a few modules of SAP while others may want numerous modules.

SAP has several layers. The Basis System (BC) includes the ABAP programming language, and is the heart (i.e. the base) of operations and should not be visible to higher level or managerial users. Other customizing and implementation tools exist also. The heart of the system (from a manager's viewpoint) are the application modules. These modules may not all be implemented in a typical company but they are all related and are listed below:

EH&S Environmental Health & Safety

Designed for the management of environmental regulatory information, particularly product safety data as required for Material Safety Data Sheets. EH&S has sub-modules of Product Safety, Dangerous Goods, Waste, Industrial Hygiene, and Occupational Health.

CFM Corporate Financial Management

FI Financial Accounting

Designed for automated management and external reporting of general ledger, accounts receivable, accounts payable and other sub-ledger accounts with a user defined chart of accounts. As entries are made relating to sales production and payments journal entries are automatically posted. This connection means that the "books" are designed to reflect the real situation.
The FI module has 9 sub modules:

FI-GL

General Ledger Accounting

FI-LC

Consolidation

FI-AP

Accounts Payable

FI-AR

Accounts Receivable

FI-BL

Bank Accounting

FI-AA

Asset Accounting

FI-SL

Special Purpose Ledger

FI-FM

Funds Management

FI-CA

Contract Accounting

CO Controlling

Represents the company's flow of cost and revenue. It is a management instrument for organizational decisions. It too is automatically updated as events occur.
The CO module has following sub modules:

CO-OM

Overhead Costing (Cost Centers, Activity Based Costing, Internal Order Costing)

CO-PA

Profitability Analysis

CO-PC

Product Cost Controlling

AM Asset Management

Designed to manage and supervise individual aspects of fixed assets including purchase and sale of assets, depreciation and investment management.

PS Project System

Designed to support the planning, control and monitoring of long-term, highly complex projects with defined goals.

FS Insurance

An integral part of mySAP ERP, SAP for Insurance enables insurance companies to handle customer and market requirements and simultaneously control profitability and economic viability.
In Release 6.00, SAP for Insurance includes the following components:

FS-CD

Collections and disbursements

FS-CM

Claims management

FS-CS

Commissions management

FS-PM

Policy management

FS-RI

Reinsurance management

FS-PE

Payment Engine (Banking Payments Solution still in development)

IS Industry Solutions

Combines the SAP application modules and additional industry-specific functionality. Special techniques have been developed for industries such as banking, oil and gas, pharmaceuticals, etc.
As of Feb 2006, following Industry Specific Solutions are supported by SAP:

IS-A

Automotive

IS-ADEC

Aerospace and Defense

IS-AFS

Apparel and Footwear

IS-B

Banking

IS-BEV

Beverage

IS-CWM

Catch Weight Management (Variable Weight Items such as Meats and Cheeses)

IS-DFS

Defense and Security

IS-H

Hospital

IS-HER

Higher Education

IS-HSS

Hospitality Management

IS-HT

High tech

IS-M

Media

IS-MIN

Mining

IS-MP

Milling (or IS-MILL)

IS-OIL

Oil

IS-PS

Public Sector

IS-R

Retail

IS-REA

Recycling Admin

IS-SP

Service Provider

IS-T

Telecommunications

IS-U

Utilities

IS-U Supplier Switch

Utilities

IS-U EDM

Utilities

IS-U EDM Billing

Utilities

IS-U Agregated Billing

Utilities

IS-U /BW

Utilities

HR Human Resources

Complete integrated system for supporting the planning and control of personnel activities and HR module is sometimes equivalently referred to as HCM (Human Capital Management).

HR-OM

Organizational Management

HR-PA

Personnel Administration

HR-PB

Recruitment

HR-PD

Personnel Development

HR-PT

Time Management

HR-PY

Payroll Management

HR-TEM

Training and Event Management

HCM Human Capital Management

LE Logistics Execution

PLM Product Lifecycle Management

PM Plant Maintenance

Equipment servicing and rebuilding. These tasks affect the production plans.

MM Materials Management

Supports the procurement and inventory functions occurring in day-to-day business operations such as purchasing, inventory management, reorder point processing, etc.

QM Quality Management

A quality control and information system supporting quality planning, inspection, and control for manufacturing and procurement.

PP Production Planning

Used to plan and control the manufacturing activities of a company. This module includes; bills of material, routings, work centers, sales and operations planning, master production scheduling, material requirements planning, shop floor control, production orders, product costing, etc.

PP-PI

Production Planning Process Industries.With the component PP-PI (Production Planning for Process Industries), SAP provides an integrated planning tool for batch-oriented process manufacturing. It has been developed in cooperation with IDS Prof. Scheer GmbH, Saarbrücken.

It is primarily designed for the chemical, pharmaceutical, food and beverage industries as well as the batch-oriented electronics industry. PP-PI supports:

The integrated planning of production, waste disposal, and transport activities within a plant The integration of plants within the company: Vertically by means of an information flow, ranging from central business applications down to process control Horizontally by the coordination of planning between production plants, recycling and waste disposal facilities, and production laboratories.

SD Sales and Distribution

Helps to optimize all the tasks and activities carried out in sales, delivery and billing. Key elements are: presales support, inquiry processing, quotation processing, sales order processing, delivery processing, billing and sales information system.

SCM

Supply Chain Management

SRM

Supplier Relationship Management

BW

Business Information Warehouse

SEM

Strategic Enterprise Management

WM Warehouse Management

Subdivides the Storage Location used in the MM sub-module Inventory Management that already defines inventory values by high-level location, into Storage Types, Storage Sections and then into Storage Bins. WM allows control of stocks to a physical level down to a warehouse bin or, if batch-managed, to the batch level within a bin. Placement and removal strategies can be configured, and physical inventory and cycle counting can be done at this finite level.

HUM Handling Unit Management

Used as a unique ID for each pallet of stock held in the warehouse.

AF&R Advanced Forecasting & Replenishment

Mostly referred to as Forecasting & Replenishment

Implementation Tools

There are multiple tools available to assist in the management of ERP implementation projects. SAP R/3, for example, provides an Implementation Roadmap that is broken up into five phases.^[1] Each phase includes documentation and planning tools to help the phase move towards completion. The five phases and their respective tasks include:

• Project Preparation
  • Building of the project team.
  • Designing the system (This includes network, hardware, and software requirements).
  • Selecting ERP vendors.
  • Defining the project?s scope.
• Business Blueprint
  • In this phase project team members decide and document how the business and business processes will function with the implementation of the ERP system. These decisions will guide the configuration of the ERP.
  • Determination of methods to transfer or integrate legacy system information into the ERP system will also occur in this phase.
• Realization
  • Configuration of the ERP system occurs in this phase. Configuration guidelines are based on documentation from the Business Blueprint phase.
  • Legacy system connections are developed in this phase.
• Final Preparation
  • Testing of the new ERP system.
  • Development of the Help Desk and Help Desk Procedures.
  • Migration of existing data.
  • User training.
  • Schedule a Roll-Out date.
• Roll-Out
  • ERP system becomes part of everyday activities.
  • Help Desk fields questions about ERP system.
  • Monitoring of the ERP system starts in this phase.

The time required for each one of these phases differs from project to project based on the size of the implementation, dedication to the project?etc. Oftentimes the finished project?s scope differs from the original scope?s documentation causing projects to go overtime and over budget. When this happens, it is usually testing and training that get cut short which jeopardize the overall success of the project.^[2]

See also

• NetWeaver

External links

• Repository of all online documentation (SAP Library) for SAP solutions.
• History of SAP at sap.com.
• SAP Help Forums - sapfans.com.

References

cs:SAP R/3 es:R/3 nl:SAP R/3 ja:SAP R/3 zh:SAP R/3