quickguide en5 11 04 · sapinfo mysap erp extendability, resources, people quick guide3/2003...

SAP INFO

mySAP ERPExtendability, Resources, People

QUICK GUIDE 3/2003

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■ SAP and ERP Leading the Way – SAP and ERP .... 5

■ Interview with Léo Apotheker, Member of the SAP AG Executive Board “Extending the Power of ERP” ........ 8

■ AMR Reasearch articleThe End of SAP R/3: SAP Unveils New ERP System ...... 12

■ Upgrade strategy for SAP R/3 and SAP R/3Enterprise customersStep in the right direction .............. 14

■ Mapping Out the FutureExploring ERP’s Full Potential ...... 16

■ mySAP ERP and SAP NetWeaverLower TCO and higher ROI .......... 18

■ mySAP Financials

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SAP INFO · QUICK GUIDE · 3/2003 ■

Continuous Innovation .................... 22

■ Human Capital Management Strategic Advantage Through People ................................ 24

■ Corporate ServicesGoing on a Business Trip ................ 28

■ Operations ManagementERP Right From The Start .............. 32

■ AnalyticsHolistic Enterprise Management .. 36

■ Quick Links ...................................... 38

■ Glossary............................................ 40

■ Impressum ........................................ 43

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■ SAP INFO · QUICK GUIDE · 3/2003

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SAP and ERP

Leading the Way –SAP and ERP When SAP invented ERP 30 years ago, the term ERP did not exist. At the time

it was simply referred to as “real-time”, “integrated” , “standard software”.

SAP has stayed true to that goal and today, 20,000 customers testify to the

fact that this approach has saved them millions in costs and added millions

more in value to their enterprises.

SAP gave birth to a new business softwareindustry and for a while ERP became

almost synonymous with SAP. The first ERP generation with SAP® R/2® brought value to theenterprise through integration and real-time processing. The second generation with SAP® R/3®

brought value to the organization through busi-ness process standardization in a client-serverenvironment. The next generation with mySAPTM

ERP brings value through extendibility in a networked and heterogeneous environment andbrings the power of ERP to every person in theenterprise.

SAP has listened to its customers: Companiestoday are facing significant new challenges in aconstantly changing world. The speed of changetoday is so rapid that by the time a companydecides and executes on an approach, it mayalready be obsolete. A merger or acquisition is nolonger a special event for many companies it issimply a part of the daily life of the organization.Big bang global implementations of new systems

become rare as companies seek incremental value-adding changes that make the most of exist-ing assets in a short period of time.

Extendible SolutionCompanies are faced with a very different worldfollowing the end of the dotcom or ‘ New Economy’ era. The challenges raised through visible failures in corporate governance havebeen exacerbated by the economic slowdown.Increased competition coupled with recentlyintroduced legislation in many countries is forcing companies to make detailed evaluationsas to how their businesses are performing andhow they can improve productivity and profit-ability through the introduction of a fully inte-grated ERP solution.

mySAP ERP is an answer to the needs of our customers. Smooth upgrade paths, increasedtransparency, lower Total Cost of Ownership,integration and extendibility, efficiency, empowerment of the workforce and many other


goals that our customers have shared with us,have gone into the design of mySAP ERP. Powered by the state-of-the-art technology plat-form SAP NetWeaver, mySAP ERP addressesexactly those pain points that a customer needsto address in today’s complex environment.

mySAP ERP, covers the complete end-to-endrequirements of financials, human resources,operations, corporate services and analytics. Powered by SAP NetWeaver, mySAP ERP isextendable and integrates into a complex hetero-geneous IT environment. Customers can takeadvantage of SAP’s Enterprise Services Architec-ture and drive additional business value fromexisting technology investments, allowing enter-prise-scale usage of Web services.

Evolutionary ApproachThe old ERP was about making the backofficeefficient, the new ERP is about making everyonein the enterprise efficient. By combining the power of capabilities such as enterprise portals,employee self services, mobile infrastructure, andcollaborative on-demand applications, the powerof ERP is brought to all users rather than just aprivileged few, and allows information to bemade available to everyone anytime, anywhere.

There is an imperative to ensure that the businessprocesses in the organization are integrated,streamlined, and transparent. mySAP ERP pro-vides the most comprehensive and integratedERP solution available today, allowing companiesto gain better control of their whole administra-

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their existing technology investments as theirneeds change. Customers want evolution ratherthan revolution in their IT landscapes.

mySAP ERP helps our customers to evolve theirlandscape, empower their people and be preparedfor ever-increasing change.

Robert Cummings, Ralf Strassner, Richard Page,

all SAP AG ■

tive and operations environment and increaseefficiency and profitability. Furthermore it drivesdown the costs of integration and deployment byshortening time to benefit and leveraging existingIT investments.

mySAP ERP is designed in such a way that companies can implement only the business functionality they need when they need it, thus simplifying upgrades and reducing total cost of ownership.

Existing SAP customers are offered the opportu-nity to easily migrate to mySAP ERP and subse-quently add any or all of the full range of mySAPsolutions in the mySAP Business Suite. This evo-lutionary approach enables customers to leverage

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Interview with Léo Apotheker, Member of the SAP AG Executive Board

“Extending the Power of ERP”

In an interview with SAP INFO Léo Apotheker, Member of the

SAP AG Executive Board, discusses SAP’s leading role in

enterprise resource planning (ERP). According to Apotheker,

the new generation of ERP systems will be able to integrate

with all systems within a company empowering employees to

add more value to the enterprise.

In the ” new economy” ERP systems were considered outdated technology. What are thereasons for the renaissance of ERP?ERP has indeed taken a volatile course in recentyears. During the dotcom revolution ERP fell intodisrepute and was even pronounced obsolete.The message at the time was that companies woulddo best by simply taking a myriad of products and‘tying’ them together over the internet. We haveseen that there is more to a successful business IT landscape. The dot-com revolution has endedand since then companies have adopted new web-based collaborative approaches in many areas,but continue to require a strong execution back-bone within the company to ensure efficiencyand control. Our customers have been turning tous to help them as they transition and modernizetheir ERP backbones. In fact, throughout the dot-com era SAP stayed true to its course andcontinued to provide solid ERP capabilities to the

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market. What we perhaps didn’t do at the timewas talk about it. We are changing this by combining our assets and the feedback from ourcustomers into our new offering mySAP ERP.

Historically a forerunner in ERP software,SAP wants to use mySAP ERP to strengthenits leading role in this area. What elementsdoes the new software incorporate?mySAP ERP is a state-of-the-art ERP offeringpowered by the SAP NetWeaver technology platform. This allows for an Enterprise ServiceArchitecture enabling companies to progressivelyextend and integrate their landscapes in heteroge-neous IT environments. The business applica-tions in mySAP ERP include full-functionality in the areas of Finance, Human Capital Manage-ment, Operations and Corporate Services. Furthermore, within these areas a customer isprovided with powerful analytic and collabora-tive capabilities.

Critics may claim that mySAP ERP is just amarketing trick. What is new about mySAPERP in comparison to the previous ERP solution SAP R/3 and what are the benefits to customers?SAP R/3 has been the most successful ERP package the world has seen. Indeed, we have continued to extend the value of SAP R/3 bybringing out SAP R/3 Enterprise – this new version allows companies considerably more flexibility in their upgrade strategies. Nonethe-less, we have heard from our customers that theyexpect even more from an ERP system. WithmySAP ERP, companies will be able to integrateand extend their ERP landscape even betterthrough SAP NetWeaver. They will be able to provide better insight into their business throughthe extended analytics capabilities and further-more extend their administrative processes withnew collaborative business processes.

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Customers expect their ERP systems to be able to take control in complex system and applica-tion environments. mySAP ERP gives them thisability.

How does mySAP ERP set itself apart fromcompetitors’ products?The depth and sophistication in areas such asintegration, extendability, functionality, globalreach and industry specifics, make mySAP ERPthe most comprehensive ERP package availabletoday. But depth and sophistication are not every-thing. Customers today look for ERP approachesthat leverage existing assets, lower total cost ofownership, provide quick returns, and flexibilityin an evolving environment. Only SAP offers evolutionary approaches that address all thesecustomer needs.

SAP has nearly 20,000 SAP R/3 customers.What is the upgrade strategy for SAP’s “installed base” ?We must take into consideration the needs of thesecustomers and their individual transition plans.For many of these customers, the ideal step maybe to go directly to the mySAP Business Suite,while for others a first step may be an upgrade toSAP R/3 Enterprise. mySAP ERP in this contextprovides another option to our installed base intheir transition plan.

With mySAP ERP now being available, havecustomers who have upgraded to SAP R/3 Enterprise acted too quickly?No. For many customers, this step may be exactlywhat they need. Furthermore, mySAP ERP iscompatible with SAP R/3 Enterprise. In fact, wecontinue to use proven approaches to allow customers smooth transitions into mySAP ERPand into the mySAP Business Suite.

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Midsize businesses have special requirementssuch as scalability when it comes to ERP. Can mySAP ERP meet a company’s growingrequirements?SAP has had much success in the midsize marketin recent years. Companies often look for veryspecific offerings with a certain scope and indeedlook to scalability. SAP provides a number ofoptions. Companies can select from specific packaged solutions to all-encompassing solutionsincluding services and preconfiguration. mySAP All-in-One is an example of such an offer-ing. mySAP ERP is another option providing ascope that many midsize companies look for. It is important to mention here that many mid-size companies also seek the full mySAP BusinessSuite to meet their needs. SAP will not only continue providing these options but also ensurethat they all remain compatible with each otherto ensure scalability for our customers.

How does mySAP ERP fit into SAP’s application landscape?mySAP ERP is one of the solutions in the mySAPBusiness Suite. Other solutions such as mySAPSCM, CRM, PLM, SRM, etc. are all compatibleand integrate with mySAP ERP. With mySAPERP a company is in fact perfectly prepared toexpand into the mySAP Business Suite.

What is new about this generation of ERP ascompared with the last generation?In the last generation, the focus was on efficiencyof the administrative backbone processes. In thisgeneration, ERP will be about efficiency but alsoabout extendability – the ability to extend ERP tointegrate with all systems within a company. This is why SAP NetWeaver will be a key featureof mySAP ERP. Furthermore, companies want toempower and enable their managers and employ-ees to manage their contribution to the enterprise.This generation of ERP will be about bringing thepower of ERP to every manager and employee inthe enterprise.

Léo Apotheker, Member of the Board

SAP AG ■

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AMR Reasearch article

The End of SAP R/3: SAPUnveils New ERP System

SAP rolled out a new product configuration called mySAP ERP at the CeBIT

international technology show held annually in Hanover, Germany. mySAP ERP

is essentially a combination of SAP’s R/3 Enterprise product and its recently

announced NetWeaver technology platform.

SAP co-chairman and CEO Henning Kagermann acknowledged that in recent

years SAP had moved away from using the termERP to describe its product, preferring instead to call it an e-business suite. However, in manymarkets such as China and Japan, buyers don’twant to talk about e-business – they are simplylooking for an Enterprise Resource Planning(ERP) system.

mySAP ERP should be an attractive option fornew customers and existing SAP users. It offers a very competitive set of traditional ERP func-tionality, including financials, human resources,order management, production, maintenance,and procurement, but it also includes support for corporate services such real estate manage-ment, travel management, and incentive and commissions management. Because it is based onthe NetWeaver platform, mySAP ERP will also feature comprehensive business intelligence

and strategic planning, a full portal infrastruc-ture, and a very sophisticated Web-services-basedarchitecture and integration capability.

One order of ERP, hold the side of SCM,CRM, and PLMSAP has obviously recognized that many pros-pects and existing customers are simply over-whelmed by the size and scope of its flagshipproduct, mySAP Business Suite. They may behappy to know that SAP can surround its ERPsystem with Supply Chain Management (SCM),Customer Relationship Management (CRM),Product Lifecycle Management (PLM), and thelike, but they aren’t ready to buy and implementthem. mySAP ERP is comprehensive enough toreplace most companies’ legacy systems and provide a great foundation for future extensions.Customers can then make their own decisionsabout which add-on applications are appropriateor necessary for their business.

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If SAP develops an appropriate re-licensingscheme, this should become a very attractiveupgrade option for existing R/3 customers. Manycompanies have been debating whether to moveto R/3 Enterprise or migrate to mySAP BusinessSuite, and this is likely to make the decisionmuch easier. The SAP sales force is also likely tobe very happy with the new product, whichshould be much more appealing in a market inwhich buyers clearly favor smaller upfront com-mitments with optional incremental expansion.mySAP ERP is “available for customer shipmentimmediately,” but we suspect it will be some timebefore the field organization can answer ques-tions about pricing, upgrades, industry versions,and such. The product and technology alreadyexists, so making the CDs is easy – the packagingand marketing has always been a bigger challengefor SAP.

Say Goodbye to R/3After reigning for a decade as the dominant ERPproduct, this may finally signal the end for R/3.SAP has been struggling to convince people thatthe technology and functionality are new whilethe product name stayed the same. The R/3Enterprise name confused people even more, and no one seemed to be able to understand itsrelationship to mySAP Business Suite. This newERP product should allow SAP to stop sellingR/3 to new customers and send a clear messageto existing customers about their migration path.R/3 has had a remarkable run, but it is time forSAP to make a clean break and send it off to theSoftware Hall of Fame.

Jim Shepherd, AMR Research ■

Reprinted with permission from the AMR Alert,March 13, 2003

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SAP R/3 Enterprise has been available forall customers worldwide since January

2003. However, even before the official launch,more than 220 customers had signed up to theSAP Ramp-Up program. As of March 2003, 27customers had already upgraded to SAP R/3Enterprise, starting from releases SAP R/3 1.l toSAP R/3 4.6C. The average project duration wasthree months, the average downtime six hours.Several cost reductions could also be identified. ■ Reduced downtime due to the System Switch

Upgrade technology■ Reduced testing input with e-CATT technology■ Reduced input for modification adjustments

thanks to the Modification Assistant (withstart releases SAP R/3 4.5B and higher)

■ Reduced training input (with start releasesSAP R/3 4.6B and higher)

Step in the right direction

The introduction of mySAP ERP raises

one key question among SAP R/3

customers – What now? A customer

can choose to go directly to mySAP

ERP or take the step of migrating to

SAP R/3 Enterprise. From an upgrade

effort point of view, these steps are

identical. This is because SAP R/3

Enterprise is completely compatible

and incorporated within mySAP ERP.


Upgrade strategy for SAP R/3 and SAP R/3 Enterprise customers

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In addition, for upgrade projects with start releas-es SAP R/3 4.6B there was no additional hardwarerequired for database, application server or client.

How to determine the input for an upgrade projectTo assist customers in estimating the input requiredfor an upgrade project, SAP offers several services(Please see “Further information”). Some examplesof key influencing factors are: ■ Upgrade strategy – Upgrade with or without

implementation of new functionality■ Start release – Functional differences to SAP

R/3 Enterprise■ Modifications – Number, complexity and

documentation of customer modifications■ Customer programs – Number of programs

and use of their SAP function modules■ Documentation – Overall documentation

quality for modifications, customer programs,test cases, etc.

Facts and recommendationsFor upgrade projects SAP provides facts and recom-mendations to ensure a smooth start. For example,in order to be able to estimate input requirementsand downtime realistically, a project system upgrade– which often represents a copy of the productionsystem – should be done first. Also, a functionalupgrade is preferable to an upgrade including newfunctionality because the project duration is short-er and the overall risk is limited. SAP understandsa functional upgrade as an upgrade where the samefunctionality is used in the new release. To extractthe most benefit from your functional upgrade, cus-tomers should take advantage of the SAP Function-al Upgrade Check. With SAP R/3 Enterprise as tar-get release, it provides an additional step called the“planning session”. This provides you with theguidance you need to put your project on the righttrack from the very beginning.

Another recommendation by SAP: Whenever possible, avoid modifications. Or in other words,system administration is more economical thecloser you are to the SAP standard with your newsystem. Customers should also bear in mind thatthere is no direct connection between the size ofyour database and the downtime of the upcomingupgrade. Large databases at terabyte level can inmany cases be upgraded in a short timeframewhereas small databases sometimes need a longerdowntime. Experience shows that the length ofdowntime is often impacted more by single tablesizes, the number of clients and other parametersrather than overall database size.

To minimize downtime as much as possible, SAPhas introduced a new technology called “SystemSwitch Upgrade”. It processes most of theupgrade phases on a temporary SAP Web Appli-cation Server in parallel to the productive system.

Finally, if a SAP Industry Solution is in use whichis currently not available for SAP R/3 Enterprise,an upgrade should be made to SAP R/3 4.6C,which will be maintained until March 2006.

Juergen Jakowski, SAP AG ■

• Extended Maintenance

http://service.sap.com/maintenancestrategy

• SAP Functional Upgrade Check

http://service.sap.com/safeguardingupgrade

• Upgrade Information Center

http://service.sap.com/upgrade

• SAP Safeguarding for Upgrades


• SAP Consulting – Upgrade Focus Group

http://service.sap.com/ufg

Further information

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Mapping Out the Future

Exploring ERP’s Full Potential

The mySAP ERP Solution Map

provides an easy to understand

picture of the new mySAP ERP

Solution. The Solution Map helps

prospective customers and existing

users to quickly relate the function-

ality being offered by SAP to their

own business requirements.

At the top level (see Figure 1) the overallscope of mySAP ERP is outlined. And it can

be readily seen that what is included far exceedsthe market expectations for what constitutes anenterprise resource planning solution. WithinmySAP ERP there are five main solution cate-gories covering Analytics, Financials, Human Capital Management, Operations Managementand Corporate Services. Finally, there is the supporting technology layer provided by SAPNetWeaver. SAP NetWeaver enables organizationsto integrate people, information, and businessprocesses across technologies and organizations.

The business managers of today need a flexibleand comprehensive technology platform based onWeb services and other standards that can driveinnovation and support the integration of hetero-geneous applications. SAP NetWeaver allows customers to achieve these goals by creating and improving business processes across their IT ecosystem without changing the underlyingtechnology foundation.

On the SAP website www.sap.com you will findthe Solution Composer tool. With this applica-tion it is possible to interactively explore the full functionality included within mySAP ERP, to identify the goals and objectives of specificprocesses along with explanatory text. If desiredit is possible to map the requirements of yourorganization against the solution map and sharethis within your organization to prepare for theimplementation of your mySAP ERP solution.

The Solution Composer can be downloaded andused as an ideal tool for planning, defining, documenting, and communicating your businesssolution requirements. It comes with more than 40 SAP Solution Maps and over 300 SAPCollaborative Business Maps. It also offersoffline development of Solution Maps and C-Business Maps personalized to your businessby providing functionality that allows you to:■ Modify and create Solution Maps and

C-Business Maps■ Assign business goals and objectives, products,

key performance indicator (KPI) definitions,user-defined properties, and attached documents to Solution Maps

■ Assign role information, business documents,and other attached documents to the C-Business Maps

■ Link the elements of the Solution Maps and C-Business Maps to produce your own in-house and inter-enterprise solution

■ Export the Solution Maps and C-BusinessMaps into HTML and PowerPoint slide format

Richard Page, SAP AG ■

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mySAP ERP and SAP NetWeaver

Lower TCO and higher ROI

In times when IT budgets are being reduced,the remaining projects are typically focused

on optimizing the enterprise’s current IT environ-ment to extract more value out of systems thatalready exist and to reduce the total cost of ownership (TCO). But integrating heterogeneous systems remains a key challenge in IT. Tying dis-parate systems together in point-to-point integra-tion projects is not only costly and results in arigid IT environment, it also leaves the businessaspect of integration unsolved. SAP has addressedthis problem with the introduction of SAPNetWeaver, a comprehensive integration andapplication platform.

Business ready integrationCompletely based on open standards, SAPNetWeaver is built to incorporate information

and applications from virtually any source toreduce complexity, increase flexibility, and lowertotal cost of ownership (TCO) of integrated ITlandscapes. It also interoperates with markettechnologies like Microsoft .NET and IBM WebSphere. SAP NetWeaver is the technicalfoundation for all SAP solutions, including themySAP™ Business Suite and SAP® xApps™.

To provide complete business integration ratherthan just connecting IT systems, SAP NetWeaverfacilitates the integration and alignment of peo-ple, information, and business processes acrossorganizational and technological boundaries. The ‘people integration’ layer brings together theright functionality and information to the rightpeople, while the ‘information integration’ layermakes both structured and unstructured informa-

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Relying on SAP NetWeaver, the comprehensive integration

and application platform, mySAP ERP helps customers to en-

able complete, services-based business solutions. It will allow

companies to drive additional business value from existing IT-

investments while reducing total cost of ownership.

tion available in a consistent and accessible way.The ‘process integration’ layer enables businessprocesses to run seamlessly across heterogeneous(SAP as well as non-SAP) systems.

The difference between pure technology and therequired business solution is the business content.That is why SAP NetWeaver comes with ready-to-use, integrative business content, which shortensthe implementation time and speeds up return oninvestment. Business content delivered with SAPNetWeaver can include, for example, portal con-tent and roles for boosting people integration;reports and analyses that speed information inte-gration; and interfaces for weaving together thebusiness processes of various back-end systems.

Comprehensive capabilitiesSAP NetWeaver is the evolution of mySAP Tech-nology and consists largely of established build-ing blocks with which SAP customers and part-ners are already familiar – SAP Enterprise Portal,SAP Mobile Infrastructure, SAP Business Infor-mation Warehouse, SAP Exchange Infrastruc-ture, and SAP Web Application Server. But SAPNetWeaver also covers new capabilities, such asSAP Master Data Management or a frameworkfor developing SAP xApps.

Solving the integration problem is not simply amatter of technology it is also a business chal-lenge with new market dynamics demandingadaptable business. SAPs Enterprise ServicesArchitecture (ESA) enablesing flexible and exten-sible business solutions that are services-based,

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such as SAP’s packaged composite applica-tions, xApps. SAP NetWeaver is the enginethat drives ESA based solutions.

When talking about integration and TCO,interoperability and extensibility matters.Two major technologies have split the marketinto two camps – Java and Microsoft .NET,and companies find themselves with invest-ments in both. What differentiates SAPNetWeaver from it’s competitors in this areais the interoperability with both Microsoft.NET and IBM WebShere/J2EE technologiesand appropriate products. Beside that, SAP NetWeaver is completely based on open

standards and technologies. This makes SAPNetWeaver a safe choice, because existing invest-ments in systems and skills can be easily lever-aged now and in future.

The sum is greater then the partsSAP NetWeaver leverages existing IT investmentsand systems by integrating them and extractingmore value and business insight out of systemsthat already exist in the enterprise. It alsoreduces the cost of integration by making costlypoint-to-point integration projects unnecessary.Being one comprehensive platform it also ensuresthe flexibility of an integrated IT landscape andsolves the integration challenge from a business

Schlüsselfunktionalität von SAP NetWeaver

• Portal Infrastructure for a unified, personal-

ized, and role-based access.

• Collaboration promotes dynamic and

cost-effective communication among

teams and communities.

• Multi Channel Access allows to extend

business processes to wherever business

occurs.

• Knowledge Management to make unstruc-

tured information accessible, including

search.

• Business Intelligence to integrate, analyze

and, disseminate business-critical information.

• Master Data Management for consolidate,

harmonize and to centrally manage master

data.

• Integration Broker for XML and SOAP

based communications between hetero-

geneous systems.

• Business Process Management for model-

ing and driving of business processes in a

dynamic IT environment.

• Application Platform for support of J2EE

and ABAP in a single environment and

independence from existing databases and

operating systems.

• Life Cycle Management manages all stages

of the software life cycle from design,

development through deployment up to

system management.

• Composite Application Framework,

which provides the development environ-

ment for building SAP xApps.

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perspective. The business content delivered withSAP NetWeaver distinguishes the business solu-tion from pure technology and ensures fast ROI.Further, SAP NetWeaver takes full advantage ofSAP’s more than 30 years experience in deliver-ing robust enterprise solutions which means max-imum reliability, security, and scalability, so mis-sion-critical business processes run smoothly.

These qualities, put together, result in significantreduction in the TCO not only for SAP solutionsbut for the entire IT landscape.

For more information about SAPNetWeaver go towww.sap.com/sapnetweaver

Simone Bruckert, SAP AG ■

Key Capabilities of SAP NetWeaver

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mySAP Financials

Continuous Innovation

SAP started with the recognition thatfinance is a continuously evolving function

and that constant innovation is necessary to sup-port organizational and financial best practices.The result was the development and release ofR/2 and its evolution into mySAP Financials.Today, SAP provides a complete and widely usedsolution for enabling financial control, businessanalysis, and performance management.

World-Class Finance ManagementAn analysis of finance management today clearlyindicates that an end-to-end, integrated approachis the only way to achieve accurate, world-classfinance management. This is the SAP approach.Among SAP’s comprehensive key capabilities infinancials are:

■ Accounting – streamlines transaction processing and provides the highest degree offinancial control and reporting. Supporting alltypes of organizations, SAP maintains a consis-tent, reconciled, and auditable set of books forstatutory and management reporting.

■ Strategic Enterprise Management – integratesthe closed-loop process of planning, reporting,analysis, and response to business change.Moreover, it bridges the world of financial data(which indicates past performance) and opera-tional data (which projects future financialresults). SAP helps translate business strategyinto everyday action and transform businessdata into real-time insight.

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■ Business Analytics – provides measurementand optimization tools for a wide range of management functions, including customer relationship, supply chain, financial, human resource, product life cycle, and e-commerce/marketplace management.

■ Financial Supply Chain Management –streamlines the purchase-to-pay and order-to-cash payment and billing cycles. Organizationscan reduce working capital needs, improve billing and payment processes, and more accu-rately forecast cash positions.

■ Corporate Services – enables efficient manage-ment of four key corporate tasks: travel man-agement, real estate management, treasury

management, and incentives and commissionsmanagement, streamlining business processesand reducing the costs of core business opera-tions. The savings these solutions deliver oftenmake a significant difference to the bottom line.

With mySAP Financials, an organization canincrease financial control and accountability,deliver business insight, and reduce the cost of finance. More significantly, organizations can also look with confidence into the future. SAP will continue its record of innovation tomeet the evolving challenges of financial management.

Kraig Haberer, SAP America ■

In finance SAP provides customers with thebroadest foundation for integrated businessmanagement. In fact, in recent years SAP hasled ERP solution providers in expanding itsfinancial management capabilities to includebusiness performance management, financialsupply chain management, and financial portal solutions.

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Human Capital Management

Strategic AdvantageThrough People

In today’s knowledge society, competitive advantage is being driven less by physical assets but more and more byintangible assets such as company culture and people. As a main solution category in mySAP ERP Human CapitalManagement combines both operational components thatenable the business to better manage human capital and collaborative components that enable employees to bettermanage their work.

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Human Capital Management (HCM)processes and information touch every

member of the workforce. Effective HCM meanssolving workforce challenges to get the most outof people: their skills, relationships, talent, andaspirations. By integrating HCM with the busi-ness processes throughout the organization com-panies can meet their key workforce challenges.

HCM capabilities in mySAP ERP deliver inte-grated, end-to-end people processes integratedwith the business processes throughout the enter-prise. Performance management features directlinks between the corporate balanced scorecard,team and individual objectives, employee feed-back and appraisals, and compensation manage-ment. This not only helps influence the correctemployee behavior but also helps employees tobetter understand corporate goals and strategies.In addition, an integrated education platformcontributes to improved, faster, personalizedworkforce education – a prerequisite to provideconsistent and high quality customer service.With the talent management functionality inHCM, businesses attract key external talent and

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HCM capabilities in mySAP ERP deliver end-to-end processes which manage each phase of theemployee lifecycle: attracting, deploying, influ-encing, training, and retaining. For efficient andstrategic workforce management the functionalitycomprises■ performance management (MBO’s, appraisals,

and compensation)■ talent management (internal/external recruit-

ment, applicant tracking, career/successionplanning, employee profiling tools)

■ skills management (e-learning, training man-agement, employee qualifications management)

Workforce Planning and Measurement toolsIntegrated workforce planning and measurementprocesses put companies in a position to plan for anticipated future needs as well as measurethe overall success of strategies that have beenimplemented. To this end, HCM capabilities inmySAP ERP include■ Balanced Scorecard and Business Intelligence

integration■ nearly 100 pre-defined standard HCM key

performance indicators ■ workforce cost planning■ succession planning■ analysis tools

leverage their internal talent through internalrecruiting, career planning, and succession plan-ning. Thus the best people from outside can behired and top performers stay with the company.

Employee Transaction and Lifecycle ManagementHCM’s comprehensive set of global capabilities,including local legal compliance, within a singleintegrated database allows organizations to bettermanage global workforces and reduce the costs of maintaining employee data. The integratedfunctionality in all HCM areas helps companiesto administer a workforce at the lowest cost of ownership and to keep down the associated trans-actional costs.

Key capabilities include■ payroll■ organizational management■ time management■ benefits■ legal reporting

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Empowering the Workforce All HCM processes can be delivered to end usersthrough SAP Enterprise Portal, based on theirrole (employee, manager, HR professional). Otherenterprise application services (e.g. financials)and portal services (team rooms and knowledgemanagement) may be aggregated with HCM services to implement an “Employee RelationshipManagemen” (ERM) strategy. The services aredesigned to ensure that needs and expectationsfor usability and navigation are met according toeach role and requirements for levels of informa-tion. Making as many people throughout the busi-ness users of the HCM information and services,increases both productivity and efficiency.

The Bottom LineHCM in mySAP ERP provides enterprises with aset of solutions to solve their workforce challengesand ultimately maximize investments in humancapital. As a result, a company is able to■ increase employee productivity and efficiency■ ensure workforce behavior and output

supports company goals and objectives■ identify and retain top talents within the

organization ■ manage learning to ensure employees are

knowledgeable and informed

With solutions that support the management ofthe workforce as well as interaction and collabo-ration among the workforce, SAP customers ultimately drive down costs from organizationalprocesses by increasing efficiency. Also the revenue side is supported through increased productivity and access to relevant informationand knowledge.

David Ludlow, SAP America ■

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Corporate Services

Going on a Business Trip

An increasingly global economy means that travel costs rise continuously. To-

day, the costs of business travel are the second-highest personnel cost (after

salaries) in many companies. The time is ripe for modern travel management.

mySAP ERP includes a comprehensive Travel Management solution that helps

optimize travel processes, reduce costs, and limits administrative effort.

A business trip costs both time and money.But the administrative work involved

before and after a trip is also enormous. Anemployee must request permission for the trip.Someone must approve the request. Then the trip must be planned and reservations made. And once the employee returns, the costs must be settled and reimbursements issued. Becauseseveral individuals take part in the travel process,data is often captured two or three times. Thetraveling employee enters data when requestingpermission and settling expenses, the personneldepartment enters data when it issues a traveladvance, and the finance department enters data during reimbursement, posting, and tax calculation.

Minimizing EffortTravel Management is part of mySAP ERP andlets you minimize the effort involved in businesstravel. The integrated solution links humanresources, accounting, and controlling so that itcan securely and efficiently perform all the busi-ness processes involved with travel. SAP TravelManagement includes three components: travelrequest, travel planning, and travel-cost settle-ment. All three can be combined flexibly. Travelcost settlement is the basic component. It can beused independently of travel requests and travelplanning, but the other two components cannotoperate without travel cost settlement.

29


30


Electronic Travel RequestsThe travel request object gives an employee aninformation unit that contains all the data need-ed to approve the trip, trigger a cash advance, andmake reservations for the trip. The information isthen passed along to the next department work-ing on the travel request. An electronic requestreplaces complex, paper forms; the form is sentfrom mySAP ERP to the supervisors responsiblefor the employee. Because the travel request liststhe type and amount of transportation and lodg-ing required, it can serve as a template for makingreservations for the trip (with the travel planningcomponent) if the employee making the request isnot authorized to do so.

Global Travel PlanningTo make full use of the information and onlinebooking functions, companies must link travelplanning to a global reservations system thatenables communication with service providers.The travel-planning component is currentlylinked to both the leading, worldwide reservationsystems: Amadeus and Sabre. Its use reduces thecosts of planning and simplifies the process itself,whilst automatically adhering to internal compa-ny travel policies.

31


data. The standard version of travel cost settle-ment in mySAP ERP includes a large number ofcountry specific versions; the ImplementationGuide of mySAP ERP contains the legal rulesrelated to travel, including rules for average costsand highest allowable costs.

Hendrik Vordenbaeumen, SAP AG ■

Efficient Settlement of Travel CostsThe travel cost settlement component enablessimple and efficient settlement of travel costs and accelerates reimbursements to employees.Depending upon a company’s organizationalmodel, employees can centrally enter, check, andsettle reimbursement documents or in a decen-tralized model, using Employee Self Service, thetraveling employees can enter their own travel

32


ERP Right From The StartOperations Management

Operations Management within

mySAP ERP covers the core logis-

tics processes in the enterprise –

no matter whether the value-added

chain begins with the customer

inquiry or with the procurement of

production material. mySAP ERP

also forms a basis for expansion

of business processes beyond the

boundaries of the company, for

example to include mySAP SCM

and mySAP CRM.

Operations Management starts withdevelopment and extends across pro-

curement, production, storage, sales andmaintenance. The following outlines providesan overview of the functionality:

Transparency in developmentTransparency and a clear overview are twofactors that are crucial to the success of devel-opment projects. With Operations Manage-ment, the development project structure planand the network plan can be incorporatedinto the purchase order. This means that theproject structure plan can be drawn up eitherfrom the order or in the graphic project plan-ning chart. The associated network plans,including material and resources, can also beintegrated, along with the required docu-ments and project texts. This is followed bydrawing up schedule planning, planning of pro-ject costs and revenues, and project financeplanning – including unit and componentcosting where relevant. This extensive func-tionality removes all the obstacles on the pathto success.

33


Procurement made easyYou have received the requisitions from produc-tion and the other departments, along with thenecessary authorizations. You now need to sourcethe goods, either by issuing inquiries and order-ing the goods from the relevant supplier or byusing the supplier workplace in Operations Man-agement. The latter provides additional advan-tages. With this method, the suppliers make alltheir data available within the customer’s system– from the order right through to billing, andmoreover quality assurance is directly linked togoods inwards. The system posts goods into thecorrect inventories and performs the correspond-ing checks. It also initiates goods outwards to production or returns goods to suppliers. You canalso input invoices into the system or draw up anautomatic goods inward invoice. This is followedby invoice checking, invoice authorization andbonus calculation.

Production planning and production in per-fect harmonyOperations Management helps mySAP ERP cus-tomers to plan efficiently. The first stage is opera-tional planning based on flexible or standardsales and production planning by the salesdepartment. This is followed by program plan-ning. Then program and capacity planning arecompared. Running parallel to this are day-to-daybusiness processes including material require-ments forecasting, material requirements plan-ning and capacity assessment. The procurementprocess then begins and the planning results goto production or to the procurement departmentfor external sourcing. Special cases are coveredby bottleneck and simulation planning.

34


The production sector uses either series produc-tion – with series order assignment or productionorders – for customer one-off production orprocess production. Internal or external Kanbanclosed-loop systems ensure the correct amount ofmaterial is supplied. A production planning chartnot only provides the necessary overview, it alsoallows users to work interactively with the sys-tem. It is equally possible to perform costing inparallel to production orders and to use a costcollector for series orders, as it is to totally inte-grate quality assurance into the individual work-ing processes. The test batch with the results ofthe test-batch assessment, error logging, test-batchconclusion, test costing and cost assignment alsoopens automatically in the background.

Parallel order costing in the sales sectorIn the sales sector, Operations Management provides, for example, functionality for managingcustomer contacts. In sales processing, users aresupported by parallel order costing from the initial inquiry and offer right through to the customer order, incorporating all the necessary

documents. This is accompanied by set manage-ment, configurable material and an online avail-ability test. For export purposes, a pro formainvoice covering extensive export management ismade available. The system then posts the goodsoutwards, takes care of transport planning anddraws up the invoices.

Full warehouse functionalityOn the warehouse side, Operations Managementusers have access to the full range of functions ofa warehouse management system combined withthe Logistics Execution System. Inventory Man-agement facilitates organization of inventory lev-els based on quantities and values. It is integratedwith financing and is responsible for the mappingand confirmation of incoming goods. In additon,Inventory Management supports the manage-ment of a whole range of warehouse categories(e.g. “freely available” or “reordering quantity”)and specific warehouse types (e.g. “consignmentstockt”). It supports the various inventory ver-sions and allows targeted controlling of the inven-tories.

35


Preventive maintenanceMachines and plant are important producergoods and the best use should be made of theirbusiness management and technical aspects.Today’s technical plant management thusinvolves much more than just a lubrication plan.Operations Management increases the availabili-ty of machines and plant. Downtimes and costsare reduced through preventive care and mainte-nance. An integrated maintenance approach alsoleads to transparent and straightforward process-es. This helps reduce material and work costswithout affecting plant quality. It also reduces thecosts for external service providers.

Susanne Heintz, Kristin Reineck,

all SAP AG ■

36


Analytics

Holistic Enterprise Management

Enterprise management plays a key role in creating value.SAP offers a pow erful tool to support management decisions:SAP Strategic Enterprise Management/Business Analytics.

Enterprise management has made majoradvances in the past several years, both in

theory and in practical software support. On thesoftware side, transaction processing has beenlargely separated from analytical processing. The key elements are online transaction process-ing (OLTP), online analytical processing (OLAP),business intelligence, and analytical applications.Available solutions are shifting from individual “best-of-breed” vendors to systems that offer comprehensive support, especially integrationwith operational systems.

The management challengeEnterprise management involves focusing a company (or division) simultaneously on long-term value creation and mid-term profitability,while optimizing day-to-day business to meetthese longer-term goals. This complex challengeinvolves the management of several nested feedback loops, and can encompass an entirecompany or individual business units.

■ The strategic planning loop involves develop-ing a strategy and drawing a consistent picture.

■ The strategy and business management loopdescribes the strategy in clear terms and converts it to specific objectives, measures, and quantitative target amounts.

■ The operational management loop is basedlargely on operational planning (sales, headcount, cost planning).

■ In the investor relationship loop, the strategyand its implementation progress are communi-cated to the stakeholders.

Staying in the loopSAP’s answer to the enterprise management challenge is SAP Strategic Enterprise Manage-ment/Business Analytics (SAP SEM/BA). SAP SEM supports the strategic planning loop,the strategy and business management loop, and the investor relationship loop; Business Analytics focuses on the operational manage-ment loop. SAP SEM/BA include analytical applications based on technology implemented inSAP Business Information Warehouse (SAP BW).

• Strategy Management with balanced score-

card and risk management

• Performance Measurement with manage-

ment cockpit and value driver tree

• Business Planning with financial planning ap-

plications

• Business Consolidation with legal and man-

agement consolidation

• Stakeholder Relationship Management with

investor relations applications

• Financial Analytics with sales & profitability

management and ABC/M

• Operations Analytics with campaign plan-

ning, supply chain performance analysis and

product design cost estimatesn

• Workforce Analytics with personnel cost

planning and fluctuation analysis

Components of SEM and Business Analytics

37


Experience shows that customers often start withSAP BW and follow up with SAP SEM/BA asintegration of analytical applications is the nextlogical step.

Typical combinations include planning and simulation (balance sheet planning and operativeplanning, particularly sales planning, profit planning, and overhead cost planning) with consolidation and financial reporting (first legal consolidation, then management consolidation).Other popular combinations are strategy manage-ment and performance measurement (manage-ment cockpit and balanced scorecard) with CRManalytics (analysis of customer behavior) andfinancial analytics (ABC/M).

For practical reasons, SAP customers usuallystart with individual components, which by themselves offer a good return on investment. In the long term, customers tend to approachenterprise management step by step – from strategic enterprise management to process optimization. Marcus Wefers, SAP AG ■

38


Quick Links

Details about SAP R/3 Enterprise* Details about mySAP ERP*

Details about extended maintenance for SAP solutions*

Information about the functional upgrade check*

http://service.sap.com/enterprise

http://service.sap.com/maintenancestrategy

http://service.sap.com/erp


39


Information about mySAP ERP Articles and news about SAP and SAP solutions

SAP's upgrade information center* SAP-specific information resource forenterprise IT professionals

http://www.sap.com/erp

http://service.sap.com/upgrade

http://www.sap.info

http://www.searchsap.com

*for existing customers only

40


EExtendability – In the past, ERP systems werewholly designed with an internal backend busi-ness focus; however, efficiency in the administra-tive and operative environment today extends to almost every employee’s desktop. mySAP ERP fulfils the need for expandable ERP solutions thatwill allow companies to collaborate and extendtheir ERP processes.

FFinancial Accounting – As part of main solution category Financials within mySAP ERPFinancial Accounting helps companies to not onlymonitor real-time all values from financially rele-vant transactions out of value-creation processesbut also maintains a consistent, reconciled, andauditable set of books for statutory reporting,management support, and as a source for analyticapplications.

Financial Supply Chain Management –Enables financial collaboration within the enter-prise and its business networks using defined corporate policies and shared services to handleall customer- and supply chain-related financialprocesses; helps automate the financial supplychain using the Web and other new electronicservice models; part of mySAP ERP’s Financialssolution category.

AAccessability – Powered by SAP NetWeaver,mySAP ERP extends the ERP environment systeminto a collaborative environment, accessible to theorganization as well as customers, partners, andsuppliers.

BBusiness Analytics – Part of mySAP ERPmain solution category Analytics. Allows man-agers and knowledge workers within an integratedframework to identify and exploit value-addingopportunities within the daily business – enablingoptimization of operational performance, accu-rate forecasting, and business planning; identifiesopportunities to create additional value throughbetter exploitation of tangible and intangibleassets, such as customer value, human capital, orthe R&D pipeline value.

CCorporate Services – Applications withinmySAP ERP that enable the efficient provision of central and decentral corporate services to theorganisation such as Real Estate, Incentive andCommission Management, and Travel Manage-ment

41

HHuman Capital Management – Main solu-tion category within mySAP ERP; provides a comprehensive range of services and processes to efficiently run the Human Resources environ-ment such as Employee Transaction Management,Employee Lifecycle Management, E-Recruiting,Employee Relationship Management and Em-ployee Self-Service as well as HCM Analytics.

IIncremental Upgrade Path – Building on theconcept of SAP® R/3® Enterprise, mySAP ERPallows companies to upgrade in incremental stepsas business requirements change, permitting com-panies to upgrade by simply adding new snap-onsolutions and business functionality as needed.Companies no longer need to manage costly big-bang implementation and replacement projects.mySAP ERP leverages existing IT assets, allowingsavings in the evolution and modernization of thecustomer’s environment.

Interoperability – Since mySAP ERP is basedon SAP NetWeaver, it is designed to be fully inter-operable with various standards, third party andlegacy applications, enabling organizations toconduct all ERP business processes both withinand beyond the organization.

MManagerial Accounting – Helps companiestake control of their profitability by monitoringand controling all performance relevant informa-tion in an environment that is completely inte-grated with all operative transactions throughoutthe company. Managerial accounting is providedwith Financials, a main solution category withinmySAP ERP.

Manager Self Service – Provides businessmanagers with access to all relevant businessinformation as well as related services throughfinancial portal solutions integrated in mySAPERP. Additionally, this capability helps managefinancial shared service centers. Content andapplication services that facilitate better, fasterdecision making and increased productivitythrough manager-centric portals. HCM contentand processes empower anyone who manages andmakes decisions about finance, management andhuman capital. Multiple interaction platformtechnologies such as browser, voice, and mobile toenable access anytime and anywhere. The portalsprovide convenient Web-based access to internaland external applications, business content, andservices that may be key to tasks, processes, orbusiness decisions.


42

OOperations Management – Enables a com-pany to efficiently streamline the logistic opera-tions for the optimal execution of all orders result-ing from purchasing, sales, production and changemanagement environments. This part of the mySAP ERP solution optimally prepares a com-pany to evolve and integrate into extended collab-orative areas such as supply chain, customer relationship, product lifecycle and supplier rela-tionship management. Among the capabilities arePurchase Order Management, Inventory Manage-ment, Production, Maintenance & Quality, SalesOrder Management, and Delivery Management.

SStrategic Enterprise Management – Capa-bility within mySAP ERP. Enables companies toexecute strategies quickly and successfully whilemanaging business performance throughout theentire organization; supports integrated strategicplanning, performance monitoring, business con-solidation, and effective stakeholder communica-tion, thus enabling value-based management.


Publication Details

Published by:SAP AGGlobal CommunicationsNeurottstrasse 1669189 Walldorf, GermanyTel.: +49 (0) 62 27/7-47474Fax: +49 (0) 62 27/7-4 43 73Internet: www.sap.info, www.sap.comE-mail: [email protected]: 1619-8220

Coordination: Robert Cummings, Richard Page, Johannes Gillar, Sabine Vogler

Advertising sales:Signum communicationLange Rötterstrasse 1168167 Mannheim, GermanyTel.: +49 (0) 6 21/3 39 74-0Fax: +49 (0) 6 21/3 39 74-20E-mail: [email protected]

The publisher is not responsible for the accuracy orotherwise of information given in the advertisements.

Graphics: SAP Communications MediaPhoto sources: Title: Getty Images, Munich; Getty Images,Munich: 4, 5, 6, 7, 10, 11, 14, 16, 18, 20, 21, 22, 23, 24, 25, 26,27, 29, 32, 33, 35; Mathias Ernert, Heidelberg: 8, 9; ChristianErnst, Karlsruhe: 13, 37; Deutsche Lufthansa AG: 30, 31;Signum Communication: (comp. Glossary) 40, 41, 42Produced by: SAP Communications Media, SAP AG, Walldorf, GermanyLithos by: Repro Braun GmbH, Neuhofen, GermanyPrinted by: Colordruck GmbH, Leimen, GermanyPrinted on BVS-Plus matte, wood-free, with matte-coated paper from Papierfabrik Scheufelen, Lenningen, Germany.Illustration printing by Schneidersöhne Papier,Ettlingen,Germany.© SAP AG April 2003. Reproduction allowed only with thepublisher’s express permission

Material number: 50062266

SAP, the SAP logo, mySAP, SAP R/3, SAP R/2, SAP B2B,SAP BW, SAP CRM, EarlyWatch, SAP ArchiveLink, SAP GUI,SAP Business Workflow, SAP Business Engineer, SAP Business Navigator, SAP inter-enterprise solutions, SAP (Word), SAP APO, AcceleratedSAP, Accelerated Solutions, Accelerated HR, Accelerated HiTech, Accelerated Consumer Products, ABAP/4, ALE/WEB, BAPI, BusinessFramework, BW Explorer, Drag&Relate, EnjoySAP,mySAP.com, mySAP.com e-business platform, mySAP Enter-prise Portal, RIVA, SAPPHIRE, TeamSAP, and Webflow aretrademarks or registered trademarks of SAP AG in Germanyand in many other countries. All other products mentionedare trademarks or registered trademarks of their respectivecompanies.

The CFO as Business Integrator Today, the CFO’s role has moved beyond that of understanding and harnessing the awesomeresources of eBusiness to proactively integratingthose resources – across business functions,alliance partners, and geographic boundaries to create a truly global company. The CFO asBusiness Integrator is a practical, results-drivenguide to reaping the benefits of new integrationtechnology and shaping a new, forward-drivingfinance agenda around SAP’s mySAP Financialssolution including financial supply chain, managed services, and advanced analytics anddecision-support.

Order InformationThe CFO as Business Integrator Cedric Read, Hans-Dieter Scheuermann,mySAP Financials TeamISBN: 0-470-85149-XHardcover, 382 Pages, March 2003

43


SAP – 30 Years in the Business of Helping Businesses

Grow 12 Million Users. 60,100 Installations. 1,500 Partners.

23 Industry Solutions. Founded in 1972, SAP is the recognized

leader in providing collaborative business solutions for all types

of industries and for every major market.

Headquartered in Walldorf, Germany, SAP is the world’s largest

inter-enterprise software company, and the world’s third-largest

independent software supplier overall. SAP employs over

28,900 people in more than 50 countries. Our professionals

are dedicated to providing high-level customer support and

services.

Experience, Knowledge, and Technology

for Maximizing Business

SAP has leveraged our extensive experience to deliver mySAP

Business Suite, the definitive family of business solutions for

today’s economy. mySAP Business Suite allows employees,

customers, and business partners to work together success-

fully – anywhere, anytime. mySAP Business Suite is open and

flexible, supporting databases, applications, operating systems,

and hardware from almost every major vendor.

By deploying the best technology, services, and development

resources, SAP has delivered a business platform that unlocks

valuable information resources, improves supply chain efficien-

cies, and builds strong customer relationships. And through

SAP Corporate Research <.../company/research.asp>, we

introduce new ideas for future solutions.

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