Introduction "Business engineering is the rethinking of business processes to improve and accelerate the output of processes, materials or services." (Philip Morris, Lausanne, Switzerland) "It''s the search for an optimal flow in a company." (Messerli AF, Switzerland) "It''s the streamlining of business processes to have maximum effect with minimum resources in supporting company goals." (Ernst & Young, South Africa) "Generally, it''s a customer focus. It''s also the designing of new processes using new information technology to create an efficient business network that involves creative staff in the process redesign." (Fahrzeugausrustung Berlin GmbH, Germany) Companies from around the world are taking advantage of information technology (IT) to radically alter how they conduct business. In the past, IT was used simply to automate existing business functions, but now IT can improve or completely change how businesses operate. This approach is called Business Engineering, which has been the logical next step in the business-process reengineering revolution.
Unlike business-process reengineering (BPR), which used IT mainly to automate certain functions performed in individual organizations -- such as manufacturing, finance, or production -- Business Engineering (BE) utilizes IT for designing or redesigning processes, the set of connected steps or "chains" performed in a business. In this way, BE takes advantage of information technology to support the redesign of organizations. By using BE to engineer entire process chains that span functional or organizational boundaries, companies can integrate all their critical business activities. Moreover, they can do so much earlier in an IT implementation than if using the older, function-centric approach of early BPR strategies. Completing process chains rapidly and efficiently is of great added value to both the company and its customers. It makes such core processes as production and finance more efficient and can bring competitive advantages through reduced costs, faster time-to-market, and improved responsiveness to customers. Business engineering arose out of the need created by BPR for software systems that could adequately support changing business processes. Although companies have gained a great deal from improving their business processes, many also have encountered problems with their business-process reengineering.
After examining existing business processes, many companies completely dispensed with them, creating new process designs instead. Too often they miscalculated the risks and costs not only of reinventing new processes but of finding a software solution to match the new process design. After various trials and tribulations with poor software tools and systems, many companies have had to do away with their process design work simply because their information system software could not support the new design. In Business Engineering, IT is used both to create and support new process designs. Software can describe, simulate, or model organizations. It can also show how changes made to the organizations will affect processes. BE is not limited to describing processes, however. A model or business-process diagram illustrates not only a company''s tasks and organizational structure but also how the company gets things done.
A company''s information model usually includes descriptions of aspects such as data, function, organization, information, and communication flow. A well-integrated information system not only improves overall business operation but makes it easier for the company to identify areas for further improvement. With prefabricated models of business applications, companies can reduce their risks while taking advantage of best-business procedures for business process engineering. As is the case in all engineering efforts, a good blueprint will map out the best strategies for implementing new designs. This book centers on a specific blueprint designed by the international software vendor SAP TM , a company that has successfully integrated IT with business engineering. In support of its R/3 TM system, SAP TM provides sample business objects and business processes that reflect the best-business practices in successful companies and that can either be used either "as is" or extended and customized by a company to suit its needs. These predefined processes are supplied in a comprehensive business blueprint called the R/3 TM Reference Model, which is actively linked with the R/3 TM running system. SAP TM R/3 TM Business Blueprint: Understanding Enterprise Supply Chain Management is designed to function as a map of this system.
Our aim is to guide the reader through the most important aspects of SAP TM ''s Reference Model. All business professionals who are considering implementing or are currently using SAP TM software may benefit from this book. From the theory behind the applications to real-life business examples, this book guides the reader through the key areas of the R/3 TM system. In order to help the reader better navigate through this book, the remainder of this Introduction will answer general questions about the book''s subject matter as well as direct readers to places where more in-depth treatments of key terms and issues may be found. I.1 What Is SAP TM ? Founded in 1972 in Walldorf, Germany, SAP TM (Systems, Applications and Products in Data Processing) commands a significant share of the worldwide client/server enterprise application software market. SAP TM is the number one vendor of standard business application software and is the fourth largest independent software supplier in the world. More than 10,000 companies in over 90 countries use SAP TM software.
Current SAP TM company facts include: Leading client/server business software company Leading vendor of standard business application software Worldwide market share of 33% Fourth-largest independent software supplier in the world Availability in 14 languages 34% of customer base under $200 million 10 out of the top 10 U.S. companies with highest market value 8 of the top 10 largest U.S. corporations 8 of the top 10 highest profit U.S. companies More than 10,000 customers in over 90 countries For a more detailed examination of SAP TM and its history, see Chapter 1, SAP TM and Client/Server Technology. I.
2 What Is R/3 TM ? Initially, SAP TM made the move from mainframes to open systems in the late 1980s with R/2 TM , a monolithic, mainframe legacy solution. As early as 1988, however, SAP TM chose to move toward client/server technology and began developing R/3 TM . In 1992, SAP TM unveiled R/3 TM just as client/server and its potential were beginning to be fully realized in the business world. R/3 TM ''s success is largely due to its ability to provide a highly integrated environment that can fully exploit the potential of client/server computing. A full description of R/3 TM ''s product architecture can be found in Part 3, Architecture, Framework, and Tools, but here we define R/3 TM simply as SAP TM ''s enterprise application for open-system platforms. More specifically, R/3 TM is an integrated enterprise software system that runs in open-system environments. The R/3 TM architecture is essentially a three-tier client/server consisting of a database server, application server, and presentation server (see Chapter 1). These dedicated, task-oriented servers are linked in communication networks, which allow them to integrate data and processes within the system.
The applications are developed using SAP TM ''s fourth-generation language ABAP/4 and the ABAP/4 Development Workbench (see Chapter 15). R/3 TM ''s advantages lie in its flexibility, scalability, and expandability. R/3 TM can be used in client/server architectures with 30 seats as in installations with 3,000 end users. This scalability ensures that R/3 TM can provide support for current business operations and allows flexible adaptation to change and progress. Designed as a total system, but also suitable for modular use, R/3 TM is expandable in stages, making it adaptable to the specific requirements of individual businesses. R/3 TM can run on hardware platforms of leading international manufacturers and can integrate with customers'' in-house applications. It is also open to allow interoperability with third-party solutions and services; it can be installed quickly and efficiently. R/3 TM is so designed that such experts in scalable software as Microsoft, IBM, and Apple have all deployed SAP TM as their enterprise solution.
In the age of Internet computing, SAP TM R/3 TM has emerged as a platform for electronic commerce, supply chain management, and data warehouse applications. I.3 What Is the R/3 TM Refere.