SAP Brief Information And Study Computer Science Essay Example

Best (Business Excellence thorough Systems Technology) (Worthen, Ben 2002). The Best project was scheduled for six years, starting from the first quarter of 1997 to the first quarter of 2003. It had a budget of over $200 million and aimed to implement five SAP modules: purchasing, financials, sales and distribution, accounts payable, and accounts receivable (Worthen, Ben 2002 pg.1 - 3). The goal of this ERP project was to create a centralized solution between Nestle company and its subordinate brands. The second ERP implementation at Nestle occurred in 1999 at Nestle UK, where they decided to use SAP R/3. This implementation was carried out across 18 UK manufacturing sites and involved 6,000 SAP users (Bryan Glick, 2001).

The main objectives of this movement were to improve efficiency across the company from Nestle UK inventory management, supply chain, and change business processes to be more competitive for tough competitions (Glick, Bryan, 2001). In 2000, the third and the largest ERP implementation projects up until now happened when Nestle SA (Nestle Headquater) determined to launch their Globe (Global Business Excellence) project in order to move the whole company to one integrated company instead of a set of individual operating units (Bendoly.E. and F.R. Jacobs ,2005).

Before implementing the Globe project, Nestle had approximately 140 different financial systems (Malcolm Whetley ,2001). However, after the implementation, Nestle would only have SAP for all its manufacturing, sales, distribution, and financial operations (Barnes, D., 2008). The Globe project had a cost of $2.4 billion, making it the most expensive implementation in history (Barnes, D., 2008). The scope of the Globe project included developing best practices for business processes, creating data management and

data standards, and standardizing Nestle's information systems using Mysap.com (Ray, R., 2010). According to Ray, R., 2010, by 2006, Globe covered half of Nestle's food and beverage business, with a total of 90,000 users, 300 factories, and 350 distribution centers.

The SAP R/3 ERP applications are key technologies utilized in the Globe project. These applications operate through separate functional modules that control specific operations such as accounting and inventory management. They are integrated with the SAP database and can be used independently or effectively integrated with non-SAP applications.

Nestle USA opted against implementing SAP Advanced Planner and Optimizer (SAP APO) and instead chose to use Manugistics supply chain management systems. However, it was discovered that Manugistics and SAP could work well together, resulting in a cost savings of $325 million for Nestle USA's supply chain improvement. It should be noted that SAP offers industry solutions packages that enhance its performance in specific sectors like leasing, industrials, and banking, with industry-specific functionalities. Additionally, thanks to its centralized database, all modules can access data without redundancy issues. For instance, the account receivable modules utilize the same customer master data as the sales and distribution modules for account receivable related functions. Furthermore, although SAP is a software package system, it can be customized for specific client requirements using ABAP language, which is SAP's programming language. The SAP R/3 Logistic parts encompass three main modules responsible for logistics within companies: Sales and distribution modules handle sales transactions such as creating sales orders and managing customer payments, Material Management modules focus on handling inventory and payable data, and Production Planning modules focus on planning production activities, including managing bills of materials and

production settings.

The SAP R/3 accounting system is responsible for controlling and integrating financial information within a company. It includes three core modules that allow for flexible control over company accounting information. These modules are financial accounting, which manages accounting transactions such as accounts payable, accounts receivable, and treasury; controlling, which focuses on costing methods within the organization; and asset management, which is designed to manage and monitor asset information. Additionally, the human resource division is responsible for managing SAP resource management within the organization and includes three main modules.

Quality management is responsible for managing the control process over the material quality of vendors and manufacturers. Plant maintenance handles maintenance tasks. The human resource specialized module manages human resources, including payroll. SAP is a cross-functional application that impacts multiple modules when implemented. Project management modules provide tools for managing projects. Work flow modules focus on process control within SAP systems. Industry solutions are specific modules designed to enhance performance in certain industries, such as leasing and manufacturing. SAP uses a building methodology called ASAP (Accelerated SAP implementation solution) that consists of five phases to implement ERP systems. The first phase is project preparation, which involves initial planning and preparation. The second phase is the Business Blueprint, where the company's business process requirements are documented.

The initial phase in creating a new SAP business environment in phase 3 is when SAP consultants meet with their clients to gather business process information.

In Phase 3, known as Realization, all the business and process requirements outlined in the business blueprint are implemented. Once the necessary information has been collected and a new business blueprint has been created, SAP consultants proceed to

implement all of the business process requirements into the SAP systems. For example, SAP - FI consultants would configure the company code, fulfill general ledger requirements, and prepare for key user training.

In Phase 4, referred to as Final Preparation, all testing, user training, system management, and cut-over activities are carried out. This marks the final phase before SAP is ready to operate on the client server.

This phase focuses on providing new process training to customers, enabling key users to learn how to use SAP systems. Additionally, all customization must be completed during this phase, including customization of modules or forms.

Phase 5

– Go-Live ; Support: This is the final phase of the implementation process, where all master data is transferred to the main production servers. SAP consultants are responsible for supporting the real environment within organizations. PC base tools are computer-based applications that include various tools and templates to support the ASAP approach, such as the Q;A Database, ASAP roadmap, and knowledge sharing.

Services:

SAP company will provide support information for organizations implementing ASAP. This includes access to an OSS user who can directly ask questions to the SAP development team when clients encounter problems that consultants cannot fix, such as patch bugs, etc.

SAP R/3 manages the data environment through a client and server basis. SAP users can process transactions through GUI, and the data is transmitted through application servers to the main database. The number of application servers used depends on the usage. This follows the Three-tier Client/Server Architecture, where the SAP software is located in the application servers, and the database servers handle documents and master data databases (figure 2.1). Alternatively, it can operate using the

Two-tier Client/Server Architecture, where data is transferred directly from the GUI to the main database. This is mostly used for training configuration. In the 2 tier architecture, the database manages both transaction data and software together (figure 2.2).

Software and telecommunication

SAP R/3 can operate with a wide range of hardware, operating systems, and databases (figure 3.0). The SAP R/3 technology environment and GUI can be managed on both Windows OS and Mac OS. Additionally, for SAP telecommunication, SAP systems can effectively interact with its server using LAN, WLAN, or internet access to maintain client and server communications.

Key users are individuals who have been trained to use SAP and have limited authorization within specific areas, such as accounting, accounts payable, and sales. Functional consultants are specialized consultants in modules like Financial and Accounting, Sales and Distribution, and Material Management. Technical consultants are specialists who focus on SAP systems and infrastructure, with ABAP programmers specializing in the programming language used for SAP modification or customization. Basis specialists emphasize hardware and software related to SAP infrastructure.

Why SAP

SAP has a wealth of experience in implementing large-scale projects for multinational companies, including competitors like Kraft Foods.

The SAP company also has an effective implementation methodology called Accelerate SAP method for implementation (ASAP). Nestle used this method until the Nestle Globe project to create standardized best practice business processes (Ray, R.,2010). SAP systems can address all Nestle objectives within one system, including data integration, business processes, and data management. For instance, SAP master data principles manage vendor master data from both accounting and purchasing sides to fix issues with redundant vendor master data (figure 4.0). This solution offers account payable modules that collect

vendor information separated by company code but use the same purchasing module with the organization segment's result. This enables a standardized general ledger to be used for all Nestle and their subsidiary companies (sap financial, N.D.). SAP is suitable for the Nestle Global project because it has multi-language packages that can be used in many countries to create standardized understanding of SAP usage. By using the standard local language, SAP can reduce training needs and facilitate easier understanding for local functions.

The objective and benefits of systems in a global context include competitive advantages over main competitors like Uniliver and Kraft food. This is achieved through increased efficiency in both supply and demand side operations. For instance, Nestle can reduce the number of suppliers from 600,000 to 167,000, resulting in annual savings of approximately $750 million.

Additionally, the implementation of Nestle globe project enables efficient utilization of information among Nestle brand categories and major customers such as wall-mart and Tesco. These customers can receive stocking shelves information from nestle information systems and use it to maximize space utilization for Nestle's wide range of products. (Barnes, D.)

In 2008, Nestle CEO Brabeck stated that the Globe project would revolutionize Nestle's success by utilizing information technology and implementing new standardized processes. With this technology, Nestle management can easily monitor various aspects of their performance, such as geography sales, sales channel, product categories, and brand, in real-time data. By leveraging this new technology, Nestle can devise more innovative strategies by combining online data with a tactical approach. For instance, they can closely track the performance of their wall-mart account managers by analyzing the real-time profit and loss within wall-mart

branches (Barnes, D.).

2008).

Ways Part

Results after SAP Implementation:

First, Nestle USA saved a net worth of $325 million by integrating different databases and using a standardized database for general ledger, vendor, and customer master data for all Nestle branches and their subsidiaries company (Worthen, Ben,A 2002).

Second, Nestle UK successfully reduced inventory stocks by 50% after implementing SAP. This was due to improved business processes and efficient control over inventories (Glick, Bryan, 2001).

Last, the Nestle Globe project introduced a new strategic movement for Nestle. It shifted from individual business thinking (normal ERP systems) to joint business thinking (coordinate ERP systems). This relied on integrated information between Nestle core units, such as purchasing and sales, to create value for key vendors and customers (Bendoly, E. and F.).

R. Jacobs, 2005). Bendoly, E. and F.

R. Jacobs, in 2005, stated that the globe project was expected to generate a total profit of CHF 3 billion per year in 2006. However, the implementation of Nestle's ERP also faced several challenges, primarily related to business process re-engineering. Initially, Nestle USA faced difficulties as most of their key users struggled to operate the new systems and understand the new business process after launching it in a big bang approach.

Best project SAP support encountered significant issues. Nestle USA CIO, Jeri Dun, reported that the turnover rate for Nestle demand forecasting employees increased to 77 percent after the SAP project went live. The technical problems arose as a result of non-integrated function during the go-live phase, which was due to the project deadline prior to Y2K in the year 2000. The consulting and staff

members of Best projects had limited time before the launch, causing trouble for Nestle in terms of integrated function between key modules. For instance, there were missing integrated functions between the sales and distribution (SD) modules and the accounting receivable module.

When salespersons use SAP to post discount rates for customers, the A/R module does not interact with the discount from SD modules, resulting in wrong billing information being sent to customers (Worthen, Ben.A 2002).

Nestle Business Objective

Nestle's objective is to create standardized business processes architecture and Nestle data. By using the same standard processes throughout the entire Nestle organization, it can easily manage its international branches worldwide. Additionally, Nestle has decided to consolidate its information systems into one system, SAP, to have more effective control over all Nestle organizations. Combining the objectives of standardizing business processes, systems, and data, Nestle will benefit from standardization and coordination of its operations, which can eliminate redundant processes and coordinate marketing activities for global customers (Bendoly, E.).

and F.R. Jacobs, 2005).

How systems help organizations achieve their business objectives

SAP systems assisted Nestle in re-engineering its business processes and required employees to transition from their previous practices to standardized best practices set by the SAP systems. This entailed working with standard master data and business processes defined by SAP systems.

Identifying IT from a Strategic Perspective:

Bendoly, E. and F. R. Jacobs (2005) described Nestle Globe as an evolving process that transitioned from individual business unit thinking, where unique ERP systems were used, to joint business unit thinking with coordinated ERP systems under Sap technology. Through Nestle's new systems, information is shared with suppliers and customers to foster collaborative working relationships.

For example, Nestle can share information with customers such as wall-mart and develop joint promotion programs for new products.

Therefore, Information Technology (IT) plays a crucial role in the strategic planning of an organization to gain a competitive advantage over competitors.

Identifying IT from an Operational Point of View

Information Technology is a fundamental component of operational processes within an organization. All companies require tools to collect and record operational data for future use, such as audits and management reports. Comparing integrated systems like SAP to non-integrated systems, integrated systems like SAP offer greater benefits in terms of operational efficiency. For instance, Nestle USA utilized SAP to eliminate redundant data in all their factories and achieved significant cost savings when purchasing goods.

Identifying IT from a Tactical Point of View

After implementing the Nestle Globe project, Nestle was able to adopt a decentralized process, transforming their organization into a lean and agile company.

The Globe project aims to provide accurate area-specific information, allowing local bosses to stay connected with their customers and make localized decisions. This eliminates the need to wait for decisions from top management (Barnes, D. 2008). By utilizing information such as product profit and loss within their area, Nestle's management can adapt faster and make effective tactical decisions at a local level.

How IT helps the organization achieve objectives and other benefits

One way IT helps is by utilizing standardized systems, master data, and business processes. This maximizes the benefits of SAP systems on a global scale, benefiting not only Nestle in certain countries but the entire organization. Standardization fosters a common understanding of information sourced from SAP systems, promoting cooperation and innovation sharing between different countries. It also

allows for successful product launches in one country to be monitored by Nestle companies in other countries.

The phenomenon of Nestle becoming united under one global organization is dependent on the use of Information systems. Additionally, the standardization of processes within Nestle relies on control processes implemented in SAP client, enabling employees to work with standardized processes and create uniform data that is understood and used consistently. The Nestle Globe project plays a significant role in enhancing Nestle's competitive advantages by streamlining business processes in large organizations and creating consolidated solutions using SAP systems, such as lean supply chain management and consolidated purchasing. SAP integrates all data into its database systems and provides decision support systems based on the integrated data. For instance, SAP APO utilizes data from various SAP logistic parts, like sales, material management, and production planning, and integrates them to generate informative reports for responsible individuals.