SAP NetWeaver

SAP NetWeaver BCO6603 - Assignment 3 SAP NetWeaver Abstract This paper aims at studying and understanding the integration problems faced by businesses. It will review why SAP NetWeaver can help play the role, which was expected of the ERP systems to integrate with existing systems and processes. The paper will also discuss the basic functionality and advantages of SAP NetWeaver and how SAP NetWeaver has helped organisations to overcome their integration problems, whilst allowing them to continue using the legacy systems. ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Introduction In the past few years, businesses have focused on Information Technology and implemented a range of technologies and systems to improve their applications and business processes. These systems were not designed to coordinate across different platforms. This has caused integration problems, which has been one of the major issues in organisations with multiple systems and applications. Data analysis and reporting issues have grown as these independent systems don’t talk to each other, which also lead to varied business processes among different business groups. One of the measures undertaken by business was the introduction of Enterprise Resource Planning systems to solve various integration issues. Even though advantageous, ERP packages did not accomplish the expected benefit of integration. The following document will discuss the SAP NetWeaver, which helps organisation to overcome this problem and align their systems and business processes. Integration Integration is process of incorporating a collection of systems and business process, and ensuring that they function accurately as a whole. This often includes a variety of programming languages and database models. Many businesses have a collection of systems designed to perform functions that relate to each department, business unit or location. There may not be any standardisation or interconnection between these systems causing strain in terms of reporting or planning business wide activities. The three major areas of integration listed below represent the challenges that face businesses. 3 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver    People: Enabling users to work with a single and customised user interface. Process: Seamless monitoring of business processes across business units. Information: Business integration enabling consistent access, search and analysis over an integrated view of information to meet business needs. ERP Systems and Integration Issues Enterprise Resource Planning (ERP) systems attempt to integrate business processes, people and information across the business into a single business wide information system. ERP systems were introduced in the 1990s as an integration package, which allowed organisations to integrate their core business functions such as finance, human resources, manufacturing and distribution. ERP systems enabled to share data and processes across the business and allow the information to be accessed in a realtime environment. The implementation of ERP systems assists management to have an up to date access to information for decision making and managerial purposes. ERP also helps in coordinating the functional departments, lowering operational costs in various areas such as accounts, production and marketing costs. However, the need for further integration still continues as the ERP packages cannot effectively deal with the problem of independent systems and applications used by businesses. Even though the ERP packages were portrayed as integrated suites, they encompass these integration issues as the ERP technology is not intended to link 4 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver other independent applications. This has resulted in organisations having to manage the ERP systems as well as number of other applications. “The ERP packages have been unable to effectively establish an integrated IT infrastructure”, Schonefeld and Vering, 2000. Customisation is also one of the problems when implementing ERP packages. Customisation problems can arise both during and after the implementation period, suggesting that it is best to use the ERP package “as is” rather than trying to modify it. Modification to ERP packages to fit the existing business processes can result in functional issues with the ERP systems. “ERP systems are at their most effective when the business is able and willing, to change their procedures or mode of operation in order to suit the package. In addition, this risk is revisited each time there is an upgrade to the standard package. Fortunately, there now appears to be a realization that, especially for mature businesses, one size does not always fit all”. Frank Coyle, 2004 SAP NetWeaver Solution The integration of business applications as well as inter-organisational systems can be made possible by a new integration software; SAP NetWeaver. Organisations require more flexible and expandable solutions to fully integrate people, processes and information with a low cost of ownership. SAP enables the accomplishment of these needs with SAP NetWeaver technology platform introduced in 2002. 5 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Based on an open architecture, SAP NetWeaver enables simplified integration between SAP and third party applications. This enhanced integration allows businesses to continue using their existing systems and incorporate a complete business process that include SAP applications. SAP NetWeaver’s components have the much needed flexibility so that intricate business situations can be effortlessly coordinated in NetWeaver. This allows SAP NetWeaver to stand out as it is the first web based application platform, which can not only be used to integrate SAP applications but also third party applications. A SAP Netweaver developer can integrate processes and information from almost any source or platform using the major technologies such as Microsoft .NET, IBM WebSphere and Java technologies. SAP NetWeaver consists of three integration layers, which includes people, process and information integration and one application platform.  People Integration: This integration layer signifies the importance of the readiness of information to the users, enabling them to process quickly. This integration layer primarily consists of the SAP Enterprise Portal and SAP Mobile Infrastructure.  Process Integration: Process Integration layer is used to restructure and simplify the processes across the business using the existing systems. The key component used in the process integration is the SAP Exchange Infrastructure (XI). However, it also uses XML data packages and workflow scenarios. 6 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver  Information Integration: This layer provides users with the access to all structured and unstructured information in the organisation. The Information integration layer consists of the SAP Business Information Warehouse, knowledge management, Master Data Management and a component of the SAP Enterprise Portal.  Application platform: This application platform enables easy development of Web applications and Web services. The SAP Web Application Server supports both Java’s J2EE and SAP’s ABAP runtime environments. SAP NetWeaver Tools & Features  Adaptive Computing Controller: This tool provides centralised controlling for assigning computer resources for services at any time allowing optimised use of resources. This enables reduced cost of operations and maintaining high service levels with economical budgets, whilst reacting to dynamic business changes without big investments in computing resources.  Composition Environment (CE): The SAP NetWeaver Composition Environment provides necessary tools for the designing, implementing and running multiple applications effectively and swiftly. The SAP NetWeaver CE facilitates for integrating new and existing services, into business specific solutions.  Developer Studio: SAP NetWeaver Developer Studio provides an integrated user interface for development of applications. It sustains various web based 7 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver programming model that includes Java J2EE, Web services and Web Dynpro. Web Dynpro is a language agnostic module of SAP NetWeaver that is used to build an application's user interface, which supports Java in SAP NetWeaver Developer Studio.  Visual Composer: SAP NetWeaver Visual Composer is a code-free modelling application, which enables composition of analytical applications. The Visual Composer allows users to create freestyle interfaces, by simply using the drag & drop feature, without any manual coding. This tool significantly minimises the effort and cost involved in creating applications. The Visual Composer also uses Business Intelligence to access data from SAP and third party systems to build highly integrated applications with transactional information.  SAP Solution Manager: SAP Solution Manager provides technical support, right from the business design stage through to the configuration and production operation. It targets the business aspects of the solution by maintaining the relationship between business processes and the necessary IT infrastructure. This also simplifies the communication between the IT department and business units. The Solution Manager provides a centralised access to tools and methods that can be used during the evaluation, implementation and operation of systems. 8 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Benefits of SAP NetWeaver Organisations invest in consolidated IT systems in order to reduce costs and increase business value. SAP NetWeaver enables new and improved business processes, reduces total cost of ownership, extracts benefits from existing systems and ensures higher return on investment. SAP NetWeaver also has the advantage of SAP’s over 30 years of experience in providing vigorous solutions, which promises reliability and security.  Effective Decision Making: Effective integration of systems and end-to-end processes across various systems helps management to clearly recognize the current proceeding and help forecast with more accurate information. Simplified reporting facilitates manager to effectively analyse any future development opportunities in systems, processes or employees can be correctly anticipated and planned accordingly.  User Efficiency: SAP NetWeaver helps businesses to improve the productivity of individuals as users are presented with streamlined interfaces and processes. The clear business process allows the users to clearly understand their effort and involvement towards achieving company’s goals. This also leads to improved user experience and satisfaction.  Increased Business Value: SAP NetWeaver enables a business focused infrastructure that maintains an ongoing process improvement. Analysing 9 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver information across the business units also minimises the risk and cost of initiating new processes as existing systems remain untouched.  Reduced Total Cost of Ownership: SAP NetWeaver lessens the need to modify existing systems and the need to invest in custom integration. It links the databases & systems, as well as providing a diverse environment for users to get the most out of the new integrated system. It also prevents needless tailoring of the entire system and makes the system more simplified and flexible to the frequent changes in business processes. This results in reduced total cost of ownership.  Enhanced flexibility: Enhanced flexibility refers to the flexibility of SAP NetWeaver to integrate with the existing systems, applications and databases in an organisation and incorporate a business process to include SAP applications without much difficulty and investment. This saves the business’ effort and money from customising existing business systems and processes.  Better Return On Investment: SAP Netweaver increases return on investment in a short phase by synchronising existing IT and business strategies with SAP solutions. This synchronisation makes the system more consistent and reliable, leading to better services and financial benefits. 10 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Case Study 1: McKesson Corporation McKesson Corporation is one of the world leaders in healthcare services. Based in San Francisco, McKesson has been in business for over 170 years. McKesson’s major business unit, the McKesson Pharmaceutical Solutions is a leader in pharmaceutical distribution with more than US$71.1 billion in annual returns. During the late 2002, McKesson Pharmaceutical made an important business decision to install SAP NetWeaver Business Intelligence (BI) module with in SAP NetWeaver. Integration Issues McKesson Pharmaceutical was using countless number of IT systems and applications for sales order processing, marketing, inventory management etc. They also had a data warehouse, which was developed in-house. The systems were ineffectively integrated, with transactions running in batch mode. Although, McKesson was already using SAP financial accounting software, they had not upgraded any of their transactional systems. They used various business intelligence tools for analysis purposes and the increasing data was also a major challenge. New customers meant new requirements, but old systems were challenging the employees to provide a timely response to those requirements. Issues and inaccuracies in the inventory were only addressed in a monthly or quarterly reporting cycles. This was proving to be very inefficient in a fast passed environment. “The problem was that most of these systems were not connected, and they all had different reporting mechanisms. No single system had access to all information. Not even the in-house developed data warehouse kept enterprise-level data,” explains Brian Hickie, McKesson Pharmaceutical. 11 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver SAP NetWeaver Solution To overcome the integration problems and replace its legacy systems, McKesson Pharmaceutical installed the SAP NetWeaver Business Intelligence (BI) module of the SAP NetWeaver platform. Successful implementation of SAP Business Information Warehouse encompassed a large data warehouse with a capacity of 10 Terabytes. This data warehouse at present grows up at about five Gigabytes everyday. Using SAP NetWeaver performance tools, such as precalculation and caching, McKesson Pharmaceutical is able accelerate the analysis of larger data sets and users can access information from the SAP business explorer front end, which is available through the intranet. McKesson uses SAP NetWeaver BI to centralise their essential company information, which enables a flexible reporting environment. The SAP BI component has also helped McKesson to improve and streamline their key business processes such as, the “Inventory Adjustment Process” and the “DropShip Process”. The inventory adjustments are addressed on a daily basis, allowing management to immediately perform in-depth analysis of any inconsistencies or inaccuracies, unlike having to wait for the monthly cycle in the past. The availability of ready information to management enabled McKesson to expedite their drop-ship service orders as managers can easily view the customer and purchases processes. The above changes have contributed in effective integration, quick and accurate access to information, enhanced control over inventory and an improved flow of business process. As a result, the new SAP NetWeaver solution has helped McKesson Pharmaceutical in accomplishing a reduced total cost of ownership and extensive benefits. 12 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Case Study 2: Philips Lighting Philips Lighting is the world’s biggest manufacturer of lamps and lighting equipment and one of the satisfied customers of the SAP Suite of software. Lamps, Luminaries, Automotive and Lighting Electronics are four of the main business units of Philips Lighting that carry out the key activities in Europe. These business units already have components of SAP solution implemented for their factories and sales organisations, but they also have existing non-SAP systems and process in use. For this reason, Philips decided to turn towards SAP NetWeaver in its quest for an enhanced approach of integrating its SAP and Non-SAP systems in its IT infrastructure. Integration Issues Philips Lighting had already been using various products in the SAP solution such as the SAP ERP, SAP CRM, and SAP Business Warehouse for its business units in Europe. The problem Philips faced at the time of implementing SAP solution was that each of their major business units configured the environment, precisely to cater to their own business process. This was mainly due to the priority given to quickly implement the solution for operational purposes. However, the circumstances had since changed and Philips realised that its IT environment had become very difficult to integrate these systems along with its non-SAP applications. “The kind of data that we are working with comes from not just SAP systems but from other systems as well. We have sites with local systems, such as manufacturing 13 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver execution systems that schedule our production lines. This involves factory production data and master data that we exchange with other systems”, explains IT Architect and Information Planner at Philips Lighting. SAP NetWeaver Solution As Philips Lighting was already using SAP data warehouses and SAP R/3, they decided to utilise the Business Intelligence component of the SAP NetWeaver to establish a central data warehouse. One of the major objectives was to integrate the data across the business units and their non-SAP systems, enabling Philips to simplify the company wide operations and decision making capability. Philips went live with SAP NetWeaver BI in 2004 and was soon receiving encouraging feedback from users in terms of system usage. Philips management observed faster and flexible daily operations. They were also able to identify any processing errors leading to process improvements. Company wide reporting was significantly simplified providing easy online access to senior managers. This accomplished one of their objectives of getting global managers to directly use the system. “Eliminating inefficiencies in data gathering allowed us to reduce the total cost of ownership”, said Jeroen Vermunt, Manager of service line MIS. 14 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Conclusion SAP NetWeaver helps to integrate and align people, processes and information across technologies and organisations. One of the most prominent benefits SAP NetWeaver offers to organisations is the smooth integration with non-SAP systems. This allows the business and its users to quickly acclimatise to the change with minimal training requirements. This paper also discussed two businesses that have successfully implemented SAP NetWeaver and its components. Growing information across business units, independent systems, diverse business processes were some of the major issues resolved by SAP NetWeaver. Organisations implementing SAP NetWeaver are progressively improving their day to day efficiency of operations, resulting in higher return on investments and reduced total cost of ownership. 15 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Bibliography BMC Softwares 2006, BMC Control-M: Empowering the NetWeaver Solution, viewed 24 May 2008, IBM DB2 Information Integrator Application Developer's Guide 2006, Why is information integration important to your enterprise?, viewed 25 May 2008, McCue, A 2004, ERP Integration nightmares, viewed 24 May 2008, SAP 2002, How SAP NetWeaver helped McKesson streamline business processes, viewed 25 May 2008, SAP 2002, SAP NetWeaver introduces new capabilities for business process Management, viewed 23 May 2008, 16 ID: 3790554 Mustafa H Gunderwala BCO6603 - Assignment 3 SAP NetWeaver Sysoptima 2005, ERP Benefits – Operational Control, Management Control and Strategic Planning, viewed 24 May 2008, Themistocleous, M., Irani, Z., O’Keefe, R. M., & Paul, R. 2001, ERP Problems and Application Integration Issues: An Empirical Survey, Proceedings of the 34th Hawaii International Conference on System Sciences, Brunel University, viewed 25 May 2008, Tokhi, L 2008, SAP NetWeaver Fundamentals – What can SAP NetWeaver do for You, viewed 24 May 2008, Victor, R 2008, Integration of SAP NetWeaver, viewed 24 May 2008, 17 ID: 3790554 Mustafa H Gunderwala