Get started Bring yourself up to speed with our introductory content.

Prevent SAP ERP implementation failure

An SAP ERP implementation or upgrade requires careful system integration. An expert shares tips for ensuring a successful project.

Companies planning to implement or upgrade an SAP ERP system should pay strict attention to system integration...

to save their SAP ERP implementation from failure. With system integration in place, data flows completely and correctly among various SAP ERP components, thereby not only streamlining business processes but also eliminating or minimizing redundant data entry efforts.

Integration is not a tool or functionality available in the system; rather, it provides a view into how various stakeholders in a company will work together when using the SAP ERP system. Consider this example: A company that specializes in producing make-to-order (MTO) products receives a customer order. Fulfilling the order requires input from employees in various departments across the company (e.g., sales, procurement, production, warehousing, accounting, quality control) using various components of the SAP ERP system.

The different business process owners, departments and business processes have to work together cohesively. If any of the processes are disrupted, the business suffers. For example, the accounts payable clerk is unable to pay a vendor for the delivered raw material until the vendor invoice is entered in the system. These predecessor-successor relationships bring about significant synergies by streamlining business processes and eliminating redundant data entry. But all process owners must enter complete, correct and timely information into the system.

SAP ERP integration tips

  1. List all the important business processes, such as Make-to-Order, Make-to-Stock, Plan-to-Produce, Order-to-Cash, Procure-to-Pay, and any others that involve two or more SAP ERP components.
  2. Create flowcharts for each business process. Alternatively, creating a sequential list of business processes will serve the same purpose as flowcharts. Also, list the steps process owners will manage outside of the SAP ERP system or in a third-party system.
  3. For each process, together with its transaction code, assign the SAP ERP system components, such as MM, PP, QM or FI, to which it belongs. Then, assign relevant business process owners and departments involved in managing each of the processes.
  4. For actual integration testing in the SAP ERP system, assemble relevant business process owners at a central location.
  5. Conduct integration testing in the system, and do so in the same sequence as shown in flowcharts or the list of business processes (see step 2).
  6. Encourage business process owners to conduct integration testing, without relying heavily on SAP consultants to do the testing. This endeavor will give them a sense of ownership of their business processes and shows them how to coordinate every step – after all, they'll be using the SAP ERP when it goes live.
  7. After concluding each round of integration testing, list testing results as well as all issues, errors or problems. Resolve them and conduct another round of testing.
  8. Based on the feedback and input from business process owners, incorporate any missed or overlooked processes.
  9. Replicate these formal integration testing sessions and workshops with informal sessions to ensure that coordination among various business process owners continues unabated until the project goes live.
  10. Identify and promptly attend to any data, training or knowledge transfer gaps among business process owners, so they are fully equipped to use the system when it goes live.

 —Jawad Akhtar

Here's an overview of the process flow. In an MTO process, production and procurement begin only after receipt of a customer order. A salesperson then enters the customer order as Sales Order in the Sales and Distribution (SD) component of the SAP ERP system. The sales order entry prompts the materials requirement controller to run the Material Requirements Planning (MRP) program, which creates production and procurement proposals by calculating the quantities needed to fulfill the customer order.

In Materials Management (MM), the procurement manager converts the MRP-created procurement proposal into a firm purchase order for a vendor to supply the raw material. The vendor delivers the raw material to the warehouse and submits an invoice for payment. In the Financial Accounting (FI) component, an accounting clerk processes the vendor payment. With raw material now available in the warehouse, the production supervisor, in the Production Planning (PP) component, converts the MRP-created production proposal into a production order. A production order is the formal go-ahead to begin manufacturing the product.

Warehouse personnel release the raw material in the Inventory Management sub-component of the Materials Management (MM) component. Production begins and on its completion, the production supervisor delivers the product to the warehouse. A quality inspector inspects the product and, in the Quality Management (QM) component, records whether the product is accepted or rejected. When approved, the product is available in the system and ready for shipment to the customer. Warehouse personnel ship the product against the same sales order that the salesperson created originally. Upon delivery to the customer, an invoice is created in the SD component and sent to the customer for payment. When the customer makes payment, the accounts receivable department processes it in the Accounts Receivable (AR) sub-component of the FI component.

During an actual SAP ERP implementation, several such integrated and interconnected business processes must be tested extensively to validate the desired results. (See the sidebar for pointers for achieving greater integration success in your SAP ERP project.) The value of bringing people together to help them understand the importance of integration cannot be over-emphasized.

Next Steps

Improving supply chain management with SAP MM

The lines blur between ERP and MES

How to track goods with SAP MM stock transport order

This was last published in November 2014

Dig Deeper on SAP implementation and upgrades

PRO+

Content

Find more PRO+ content and other member only offers, here.

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

SearchManufacturingERP

SearchOracle

SearchDataManagement

SearchAWS

SearchBusinessAnalytics

SearchCRM

SearchContentManagement

SearchFinancialApplications

Close