Sap for Atlam

The payback period looks at a project only until the costs have been recovered. This analysis tool is often ignored because it does not take into consideration the time value of money. The time value of money limitation of the payback period can be modified by using the discounted cash flows of a project for the analysis of when the outflows will be recovered.

The case shows the implementation of SAP ERP solution in NIBCO, a manufacturer of pipe and fittings, a mid-size manufacturer with about 3,000 employees and revenue over 460 million USD. The company

In real live project with more cash flow after the pay back period would be more valuable than Project with no cash flow, yet its payback and discounted payback make it look worse. This is the reason, the shorter the payback period, other things held constant, the greater the project’s liquidity. Apart from this, since cash flows expected in the distant future are generally riskier than near-term cash flows, the payback is often used as an indicator of a project’s riskiness because the longer the payback period the higher is the risk associated with the project (Brigham, 2004) (Fabuzzi, 2003).

The payback period allows an analyst to evaluate the duration it takes for the company to generate dollar returns that pay back the initial cost of the investment. The positives of this approach are that it is fairly easy to understand by both management and

For example: You spend $100 to set up a business, to pay for the tables, chairs, and other objects. Afterwards, you earn $50 in the first year, and $50 in the second year (total of $100 in 2 years). This means that in 2 years, you get back your $100... exactly the same as what you initially invested. Therefore, your payback period is exactly 2 years.

a. What is each project’s payback period? According to Financial Management: Principles and Applications Payback period is defined as “A capital-budgeting

The PAYBACK technique is based on cash flows and it measures the time which is required for a proposal’s initial cash outflow to equal its cash inflow generated by the investment, the solution is expressed in years and month or days.

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SAP is a leader in the Global Business Software market and in this case study we will examine their strategies both the successes and failures. SAP was founded in 1972 by a group of German’s that left IBM to form the new company. In 1973 they launched the R/1 processing program which was one of the earliest forms of an enterprise resource planning system. Much of this case study will examine the Enterprise Resource Planning (ERP) system from product evolution to customer service management to competing forces.

In the scope of ITM-319 course SAP ERP system’s capabilities and processes were carefully studied including Sales & Distribution, Materials Management, Production Planning, Financial Accounting, Controlling, HR Management, Warehouse Management and Project System.

Payback analysis takes cash income from capital investment projects that equal the initial cost of the investment. When choosing between projects, accepting the one with the shortest payback time is typically chosen. Calculating the payback period is fairly easy to calculate by dividing the amount of the investment by the projected cash inflow each year. Higher return on the capital investments is the result of shorter payback period. Many companies have a target number of years in which they want to consider for the payback period. For those reasons, they will only consider projects that fall within those timeframes.

SAP: SAP is the enterprise application software market leader. They are the world’s third largest independent software manufacturer. Their focus is to assist companies in innovation as well as encourage them to grow. They offer several different services and solutions for a range of industries and departments. Their WMS can help optimize resources and assets, manage the workforce, and support on-demand and planned cross-docking.

SAP is a Large and successful technology company, that is headquartered in Walldorf, Germany, being the market leader in ERP applications and business analytics at that time (Lakhani, Iansti and Fisher 2014). SAP Hana was seen an enabler of Cloud strategy, whereby the platform was regarded as the integration layer linking the old sap products and the newer cloud-based products (ibid).

This training manual has been developed as a reference for employees to learn about using the SAP system..

However, computers continued to grow in capability, and the idea of building one generalized application with flexible features which could be customized to each client’s needs became reality in 1973 with the introduction of SAP RF. Over time SAP’s product