Introduction to Enterprise Computing

CS4803/8803 ENC
(soon CS4365/6365)
Intro. Enterprise Computing

8B: Cisco Case Study and

SAP

Instructor: Calton Pu
(unofficial) TA: Lenin Singaravelu
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Cisco Case Study

z One of the best known ERP case studies
– Success story used by vendors and B-schools
z Leading network router company
– Founded in 1984
– 1990: IPO
– 1993: Capitalization at 0.5B
– 1998: Capitalization at 100B
– 2000: Capitalization at 531B
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 Introduction to Enterprise Computing

Background
z Peter Solvik joins Cisco (Jan 1993)
– Reorganization of the IT structure
– IT worked/paid for client line organizations
z Two-day failure in Jan 1994
– Core application database corrupted
– Urgent and important to change

ERP Product Selection

z Management team
– Formed from IT and business units
z Integration partner
– KPMG (consulting, auditing)
z Small number of choices
– The vendor should be large enough
– Oracle chosen in 75 days

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 Introduction to Enterprise Computing

Board Approval
z How much would it cost?
– $15M budget for implementation
– Largest single item approved by company
– The legacy system crashed on the day of board
meeting
z How long would it take?
– Nine months to completion (stable by Q4)

Larger Context
z New IT infrastructure worldwide
– Two year, $100M effort, ERP at core
– Replaced all mainframes, minis, legacy systems
z New standard platforms
– Servers all Unix, LAN all Windows NT, clients
all PCs (Toshiba and HP), Oracle database,
TCP/IP networking
– Same OS’s and applications worldwide
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 Introduction to Enterprise Computing

ERP Project Timeline

– June 2, 1994: project kickoff
– July 31, 1994: process and designs complete
– Sept 30, 1994: functional process approval
– Dec 1, 1994: critical interfaces complete
– Dec 22, 1994: pilot done, go/no-go decision
– Jan 3, 1995: end user training begins
– Jan 27, 1995: data conversion complete
– Jan 30, 1995: go live
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ERP Project Costs

z Breakdown of implementation costs
– $15M over 7 months
– Software 16%
– Hardware 32%
– System integration 38%
– Core team headcount 14%

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 Introduction to Enterprise Computing

Customer Relationship
z Web-enabled sales and customer service
– Investment of $100M over 3 years to
implement Cisco.com
– Jan 2001: 600K registered users
– Answer questions, diagnose network problems,
provide solutions, expert advice
– Direct sales: from 0% (July 1996) to $1.5B per
quarter in 1998, to 92% of total (Jan 2001)

Supply Chain
z Single enterprise: integrating Cisco and
suppliers for real-time response
z New Product: automated product data
information, simulating manufacturability
z Autotest: integrated testing by suppliers
z Direct shipping: from supplier to customer
z Dynamic replenishment: real-time supply
chain management
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 Introduction to Enterprise Computing

Cisco Market Position (1999)

z High-end routers (backbone, edge)
– $2B revenue, 88% market share
z Mid-range routers (enterprise)
– $1.4B revenue, 80% market share
z Low-end routers
– $1.8B revenue, 72% market share

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Oracle9i: Application Server

z A single product supporting
– E-business portals
– Transactional applications
– Web services

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 Introduction to Enterprise Computing

[Slide extracted from “Tutorial: Application Servers and Associated Technologies” 13

by C. Mohan, SIGMOD’02]

Oracle “ERP” Functionality

Finance Human Resources Marketing & Sales
General Ledger Human Resources Marketing
Payables Payroll Incentive Compensation
Receivables Self-Service HR iStore
Cash Management Training Administration Trade Management
Assets Advanced Benefits Partner Manager
iPayment Time & Labor Proposals
Internet Expenses iLearning TeleSales
iReceivables iRecruitment Advanced Pricing
Balanced Scorecard HR Intelligence Field Sales
Activity Based Management Sales Offline
Financial & Sales Analyzers Quoting
Credit Management Contracts for Sales
Property Manager Projects
Advanced Collections
Project Costing
Treasury
Project Billing Interaction Center
Lease Management Advanced Inbound
Project Management
Customers Online Advanced Outbound
Project Collaboration
Data Librarian Scripting
Project Resource Mgmt
Customer Data Model eMail Center
Project Contracts
Financials Intelligence Survey
Enterprise Planning & Budgeting Project Intelligence
iAssets 14
Internal Controls Manager New in R11i versus R11

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 Introduction to Enterprise Computing

Oracle Other Products

Order Management Procurement Service
Order Management Purchasing TeleService
Configurator Payables Depot Repair
iStore iProcurement Field Service
TeleSales Sourcing - Spares Management
Receivables iSupplier Portal - Advanced Scheduler
Advanced Pricing Procurement Contracts - Mobile Field Service
Quoting & Proposals iSupport
Trade Management Manufacturing Service Contracts
Release Management Discrete Manufacturing
Sales Contracts - Project Manufacturing Maintenance Mgmt
- Flow Manufacturing Enterprise Asset Mgmt
Supply Chain Planning - Project Contracts Property Manager
MRP/Supply Chain Planning - Shop Floor Management
Manufacturing Scheduling Process Manufacturing Product Lifecycle Mgmt
Demand Planning Advanced Product Catalog
Advanced Supply Planning Logistics CADView-3D
Constraint Optimization Inventory Management Project Mgmt / Collab. Suite
Global Order Promising Mobile Supply Chain Apps
Inventory Optimization Warehouse Management Supply Chain Intelligence
Collaborative Planning Transportation Execution Supply Chain Intelligence
Transportation Planning
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New in R11i versus R11

Discussion Topics
z IT as commodities
– Hardware certainly are commodities
– Software being commoditized (e.g., ERP)
z Impact of enterprise computing
– New business models (e.g., Amazon, eBay)
– Enterprise transformation (e.g., Cisco, Dell)
– Virtual enterprises, outsourcing

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 Introduction to Enterprise Computing

Slide Credits:

Rutgers Business School –

Newark and New Brunswick
By Martin O’Reilly

Agenda
z What is an ERP?
z What is SAP?
z What is IDES?
z SAP Basics & Navigation
z SAP Exercises With IDES

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 Introduction to Enterprise Computing

What Are The Benefits?

z Cross-functional teaching tool
z Access advanced software technology
z Enhance marketability
z Pursue research opportunities
z Broaden outreach

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What is SAP R/3?

z SAP is an ERP (Enterprise Resource
Planning) system

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 Introduction to Enterprise Computing

What is an ERP?
z Enterprise-wide system which integrates the
business functions and processes of an
organization
z Integration of business functions into one
seamless application
z Usually runs on a RDBMS
z Replaces Countless Departmental and
Workgroup Information Systems

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What is an ERP?
z Links business processes
z Maintains audit trail
z Utilizes a common information
system
z Implementation normally involves
BPR: Business Process
Reengineering
z Difficult to Implement Correctly – Railroad
Tracks

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 Introduction to Enterprise Computing

Evolution of ERP
z 1960’s: Inventory Control Systems
z 1970’s: MRP: Material Requirement
Planning
z 1980’s: MRPII: MRP & Distribution
z 1990’s: MRPII Æ ERP with introduction
of other business functions Æ
CRM’s
z Today: Web Enabled ERP – Connecting
ERP Externally

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What is the State of the ERP

Market?
z Weak Economy = Fewer Implementations
z ERP Systems firmly entrenched in infrastructure
z Implementing CRM, KM, SCM ERP
Applications
z Linking ERP’s to Web – Web Services
z ASP’s = possible new market segments
z Enterprise Application Integration (EAI) Tools

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 Introduction to Enterprise Computing

What is the State of the ERP

Market?
z Portals
z Public Sector Growth Æ laggards
z Better Implementations ÆExperience
z Upgrades: ½ of SAP’s customers need to
upgrade by 12/03
z Roll Up Projects
z Great Plains Æ MS Factor?
z Current Buzz: ERP II
z Next: Web Services Integration
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What is SAP R/3?

z SAP = Systems, Applications and Products in
Data Processing (R = real time, 3 = 3 tier)
z German Based Company
z 3rd Largest Independent Software Vendor in the
World
z SAP: ERP Market Leader
z 80% Fortune 500 Companies Use SAP
z Over 18,500 Customers in 120+ Countries
z Over 12 million users
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 Introduction to Enterprise Computing

What is SAP R/3?

z Client/Server Technology
z Highly Customizable
z Based on Industry Specific Best
Practices
z Multi-lingual: International
z Based on Open Standards
z Integrated Applications System:
Modular in design
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New Dimension Product

Business
Information
Warehouse
Strategic
Enterprise
Management
Supply
Chain
Optimizer

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Enterprise Structure Terminology

SAP

Enterprise
Enterprise Client

Company
Company Subsidiary
Subsidiary Company
Code

Factory
Factory Plant

Sales
Sales Sales
Organization
Organization Organization

Business
Business Division
Department
Department Division
Division Area
Area
Storage
Warehouses
Warehouses Locations

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 SAP AG 1999

Organizational Structures - Levels

Client

Company
Company Code
Code Company
Company Code
Code
1000
1000 3000
3000

Controlling
Controlling Area
Area
2000
2000
Plant 1000 Plant 1100 Plant 1200

...
Storage Storage Storage
Location Location Location
0001 0002 0003

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 SAP AG 1999

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 Introduction to Enterprise Computing

What is MySap.com or the

MySAP Business Suite?

z Hosted E-Business Platform Solution

z Hosted is + & -
z Link Organization to Supply Chain
z Link Organization to Consumers
z Exchange

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The mySAP.com E-Business

Platform
mySAP Workplace

mySAP
mySAP HR
SCM mySAP
mySAP Financials mySAP
E-Procurement Industry CRM
mySAP Solutions mySAP
PLM BI

SAPMarkets*

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 Introduction to Enterprise Computing

mySAP.com Solutions

Cross-Industry Solutions Industry Solutions

O mySAP Workplace O mySAP Aerospace & Defense O mySAP Insurance
O mySAP CRM O mySAP Automotive O mySAP Media
O mySAP SCM O mySAP Banking O mySAP Mill Products
O mySAP Marketplace* O mySAP Chemicals O mySAP Mining
O mySAP E-Procurement O mySAP Consumer Products O mySAP Oil & Gas
O mySAP BI O mySAP Engineering & O mySAP Pharmaceuticals
O mySAP PLM Construction O mySAP Public Sector
O mySAP HR O mySAP Financial Service Provider O mySAP Retail
O mySAP Financials O mySAP Healthcare O mySAP Service Providers
O mySAP Mobile Business O mySAP High Tech O mySAP Telecommunications
O mySAP Higher Education & O mySAP Utilities
Research
Infrastructure and Services
O mySAP Technology O mySAP Services O mySAP Hosted Solutions

*mySAP Marketplace is delivered through MarketSet™,

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a joint solution from SAPMarkets & Commerce One.

mySAP.com E-Business
Solutions

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What’s Next?
z Co Chairman Hasso Plattner in his own
words.
– http://www.sap.com/community/events/2003_0
2_05/index.asp

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What is IDES?
z IDES =International Demonstration
and Evaluation System
z IDES Basics
– Fictitious company using R/3
– Customizing, master data, transaction data
– Integrated, well-documented system environment
– Simulation of business processes
z IDES is a Standard R/3 System
– System R/3 (standard)
– IDES data (customizing, master data,
transaction data)
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 Introduction to Enterprise Computing

IDES Guidelines
z To reflect increasingly complex requirements of
modern business
z To design all organizational structures in a
practical manner
z To make each element of the core functionality of
the R/3 System available in its most up-to-date
version
z To allow users with very little or no previous R/3
knowledge to easily run core scenarios in the R/3
System
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IDES - The Business Group

IDES Corporation
Manufacturing

IDES North America IDES Europe

New York / US Frankfurt / Germany

Toronto / Canada Lisbon / Portugal

Barcelona / Spain

Paris / France
IDES Latin America London / UK

Mexico/ Mexico-C.
IDES-Asia

Tokyo / Japan

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IDES LOGISTICS
z SAP Aerospace / Defense
– Production / Maintenance of an aircraft
engine
z SAP Engineering / Construction
– Elevator and Turbine production

Engineer- Make-to-order Assembly

to-order production manufacturing
JIT z SAP Automotive
– Manufacturers / Suppliers processes

Industry
Complexity

Production
by lot size Repetitive z SAP Consumer Products
manu- – Selling food and non-food products
facturing

Process z SAP High Tech & Electronics

manu- Mass
facturing – PC assembly and customer services
production
z SAP Chemicals
– Paints, coating and solvents production
Sturdiness
z SAP Pharmaceuticals
– Production of tablets

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IDES - Financial Accounting

IDES Corporation

IDES North America IDES Europe

IDES Asia

Frankfurt / Germany
z Consolidation
Lisbon / Portugal
z National and international Barcelona / Spain
charts of accounts (parallel) Paris / France
z Cost of sales accounting London / UK

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IDES - Cost Accounting

IDES Corporation
Controlling Area
IDES North America Controlling Area
IDES Europe

Controlling Area
IDES Mexico

Frankfurt / Germany
z Cost accounting for all Lisbon / Portugal
companies Barcelona / Spain
z Marginal costing Paris / France
z Activity-based costing London / UK

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IDES - The Business Group

IDES Corporation
Retail

IDES North America IDES Europe

Los Angeles / US Giessen / Germany

Denver Mainz
Boulder Frankfurt
Colorado Springs Darmstadt
Tuscon
San Diego
San Francisco

Oakland

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 Introduction to Enterprise Computing

IDES - Logistics

Production Retail

Engineer- Make-to-order Assembly Textiles

to-order production manufacturing
JIT
Complexity

Production
by lot size Repetitive
manu-
facturing

Process Food
manu- Mass
facturing production

Sturdiness

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IDES - The Business Group

IDES Corporation
Banking

IDES North America IDES Europe

New York / US Frankfurt / Germany

Dublin / Irland

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IDES - The Business Group

IDES Corporation
Service Provider

IDES North America

Philadelphia / US

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IDES - Documentation
z Process-oriented online help
z Step-by-step documentation
with all relevant information
z “Functions in Detail” brochure

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IDES Summary
z Complete R/3 model
company
z Complete integration
z Internet scenarios
z Process-oriented online
help
z Basis for all R/3 training

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SAP Access
z Complete Application Form

z Confirmation via email with platin.ini file

z Access in RU Labs Newark and RBSCS

Levin Lab in NB

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 Introduction to Enterprise Computing

University Alliance Home

Page
z www.sap.rutgers.edu
– Student Resources:
z SAP Library
z SAP Functions in Detail
z SAP ASAP
z Introduction to SAP ppt
z Introduction to SAP PDF – Exercises
z User Application Form
z Lab Locations – SAPGui
z Additional Access Æ
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Additional Access

z Access via SAPGui for Java:

– Install Java Plug-in or JRE
– Install SAPGUI for Java
– Copy platin.ini (sent with account confirmation
email) to specified directory

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Links
z http://www.cio.com/forums/erp/
z http://www.intelligententerprise.com/
z http://www.sap.com/
z http://www.oracle.com/
z http://www.peoplesoft.com/
z http://www.jdedwards.com/
z http://www.baan.com/

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