INTEGRATE. Multi-Site and International Organizations: Integration of SAP and Microsoft Dynamics NAV with SAP NetWeaver. Microsoft Dynamics TM NAV

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1 INTEGRATE Microsoft Dynamics TM NAV Multi-Site and International Organizations: Integration of SAP and Microsoft Dynamics NAV with SAP NetWeaver Technical White Paper This document is based on the integration between SAP R/3 and a Microsoft Dynamics NAV business management system in a demo environment. In particular, it focuses on integration based on the SAP NetWeaver for the mysap Business Suite. Created by Magnus Management Consulting and Qurius Updated March

2 Table of Contents Introduction... 3 Techniques Used... 4 Process Integration in Detail... 4 Exchange of Master Data... 5 Purchase Order Process (Replenishment)... 6 Financial Consolidation... 7 Constraints in the Demo Environment... 7 Conclusion MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

3 Introduction The Multi-Site and International Organizations concept refers to a parent or holding company that uses one business management system, which is integrated with the systems used by its individual subsidiaries or divisions (referred to as sites throughout this paper) 1. This paper describes the concept with SAP R/3 at the parent company and Microsoft Dynamics NAV at the sites, as shown in Figure 1 below. It also describes the integration scenario of the concept, the processes involved between the parent and the sites, and the technical implementation of the integration in a demo environment. In this paper, we concentrate on certain general processes carried out between the parent companies and the sites. These processes are: Exchange of master data: The parent company maintains all master data and distributes it to the sites. The master data in scope is customer master data, material master data, pricing information, and chart of accounts (financial consolidation). Purchase order process (replenishment): When a site wants to replenish its stock, it sends a purchase order to the parent company. The parent company delivers the goods, sends a delivery notification (or rejection), and finally invoices the site. Financial consolidation: At the end of a period, the site sends its financial consolidation to the parent company, which consolidates the changed G/L accounts (General Ledger accounts) of all sites. Figure 1 1 Microsoft Dynamics NAV Multi-Site and International Organizations Business White Paper (2006) 3 MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

4 Techniques Used To integrate the processes of a parent company and a site, a demo environment was set up as illustrated in Figure 2. The parent company uses SAP R/3 version 4.7, and the site uses Microsoft Dynamics NAV 4.0. The integration tool (integration broker) used to integrate Microsoft Dynamics NAV with SAP is SAP NetWeaver XI (SAP XI) version 3.0. Integration Between SAP R/3 and SAP XI SAP XI has been chosen as an integration platform in this demo environment. SAP XI is SAP s new integration tool and part of the NetWeaver portfolio. SAP XI has Message Mapping, queuing, and routing functionality to integrate with other business systems. The SAP XI platform is able to communicate with SAP using the SAP integration techniques: IDOCs (Intermediate Documents) and BAPIs (Business Application Programming Interface). An IDOC is a standard SAP document that contains business data. There are many standard IDOC message types available, for example, Material Master, Delivery Document, and Invoice. A BAPI contains RFCs (Remote Function Calls) that can perform actions in the SAP system, for example, creating an order or uploading a financial order. For the demo environment the standard SAP interfacing (IDOCs and BAPIs) is used as much as possible. IDOCs are used in this demo environment to interface from SAP to Microsoft Dynamics NAV, because SAP has standard functionality to generate an IDOC based on triggers within SAP. For example, when an order is handled by SAP, it can automatically generate an IDOC for notification purposes. BAPIs are good for communication to SAP, because the complexity of the input fields of a BAPI is lower than filling an IDOC with all details. Integration Between SAP XI and Microsoft Dynamics NAV SAP XI and Microsoft Dynamics NAV communicate via XML documents. Microsoft Dynamics NAV supports the XML Document Object Model (XLM DOM) and XMLport techniques to import and export data. The demo environment shows both integration techniques. A starting point for interfacing with Microsoft Dynamics NAV is to use as much Microsoft Dynamics NAV standard functionality as possible. Process Integration in Detail The processes Exchange of Master Data, Purchase Order Process, and Financial Consolidation will be described in more detail, including all sub-processes. 4 MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

5 Exchange of Master Data The parent company manages all master data centrally, in order to use the same information organization-wide. In the demo environment the master data that are interfaced from the parent company to the sites are: customer master data, material master data, pricing information, and the chart of accounts. The prices of the materials are sent separately to Microsoft Dynamics NAV to keep the SAP interfacing as standard as possible. Figure 3 Customer Master Data The end-customer master data will be interfaced from SAP to Microsoft Dynamics NAV. The SAP Customer Master IDOC (DEBMAS03) is used with no modifications. Each end-customer will have a SAP customer number and this same number will be used in Microsoft Dynamics NAV when an end-customer sale is made. SAP XI transforms the data to a standard Microsoft Dynamics NAV XML format. Microsoft Dynamics NAV uses the XML DOM to import (create or update) the customer master data. Material Master Data The standard SAP product master structure is used for purchasing and sales activities. Standard cost price based information is included. The material master data is sent to Microsoft Dynamics NAV with help of the IDOC MATMAS03. SAP XI transforms the data to a standard Microsoft Dynamics NAV XML format and uses the XML DOM to import (create or update) the material master. 5 MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

6 Pricing Information For this demo environment, only the intercompany price list is interfaced with Microsoft Dynamics NAV. The pricing information is exported to Microsoft Dynamics NAV. SAP sends an IDOC (CONDA) to Microsoft Dynamics NAV, which imports this information after SAP XI has converted it to an XML document. Also Microsoft Dynamics NAV uses the XML DOM for this interface. Chart of Accounts The chart of accounts as it is defined in SAP will be mirrored in Microsoft Dynamics NAV. A Microsoft Office Excel file with all the BS/P&L accounts will be integrated in Microsoft Dynamics NAV. This makes end-of-month financial bookings and consolidation more straightforward. The file is transferred directly to Microsoft Dynamics NAV for manual integration. This was done because it is a one-time setup and would be relatively time-consuming to process through system interfaces. Purchase Order Process (Replenishment) When a site wants to replenish its stock, it sends an internal order to the parent company. The parent processes the order and delivers the order or rejects it (with reason). Finally an invoice is created. Purchase Order Internal business rules in a sales office (site) trigger purchase activities, because in the demo environment demand planning is done locally at the sales office. A purchase order containing quantities, prices, and a required delivery date is sent from Microsoft Dynamics NAV to SAP. A standard SAP sales order is created upon receipt of a purchase order coming in from Microsoft Dynamics NAV and a SAP sales order number is automatically created if the transaction is successful. The sales order captures the Microsoft Dynamics NAV purchase order number which is used as a tracking reference number both by SAP (parent company) and Microsoft Dynamics NAV (site) throughout the business process. Microsoft Dynamics NAV sends an XML document to SAP XI with the order information and SAP XI uses a BAPI function to create the order (BAPI_SALESORDER_CREATEFROMDAT2). Delivery Notification When the sales order is created in SAP, an availability check is made to determine if there is enough stock in the warehouse to be delivered on the date requested by the sales office. If there is not enough stock on hand, a schedule line with zero confirmed quantity for that item will be created. Before the sales order is saved, a User-Exit (which is additional programming logic that was added to the sales order program) will run to check the schedule lines. If the program discovers one schedule line in the order that has zero quantity confirmed, the user exit will enter a Reason for Rejection for each item line in the order and block the whole order for delivery on the header level. This means that a complete delivery cannot be fulfilled. A Sales Order Reject message is then automatically sent to Microsoft Dynamics NAV when the sales order is saved. The mechanism for the interface uses the SAP IDOC ORDERS05. The IDOC is generated via the print program in the order document as soon as the document is saved in SAP. 6 MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

7 If the complete order can be delivered, a delivery is created after which a goods issue is done in SAP. The delivery note created in SAP acts as a pick request for the warehouse to pick the order. The picked quantities are then manually updated in the delivery note. A goods issue in SAP depletes the stock levels in the system and makes a financial posting to reduce the value of the stock. This usually happens when the actual physical goods leave the warehouse to be delivered. A goods issue process results in material and accounting documents being created in SAP. The creation of the delivery note, updating the pick quantities, and goods issue can be done directly in the delivery note. When the goods issue is done, the shipping notification message is automatically triggered and sent to Microsoft Dynamics NAV. The shipping notification provides a due date to Microsoft Dynamics NAV when the complete order (total quantity of all requested items) will arrive at the sales office (site). The mechanism for the interface uses a standard SAP IDOC (DELVRY01). SAP XI maps this document to a standard Microsoft Dynamics NAV document and the XMLport processes the XML document. Invoice Before the sales invoice can be created, the outbound delivery and goods issue will first have to be created in SAP because the sales invoice is delivery-based. The sales invoice message consists of the sales price for each item that has been ordered from the Microsoft Dynamics NAV sales office (site). The total amount to be paid to the parent company is calculated in Microsoft Dynamics NAV. The Microsoft Dynamics NAV purchase order number is also recorded in the sales invoice. The invoice is created manually, and it references the Microsoft Dynamics NAV purchase order. The mechanism for the sales invoice interface uses a standard SAP IDOC (INVOIC01). The IDOC is generated via the print program in the sales invoice document as soon as the document is saved. Financial Consolidation End of month consolidation takes place in SAP and is done by uploading the mutations in the GL accounts (General Ledger Accounts) from Microsoft Dynamics NAV in an XML file to SAP. SAP XI calls the BAPI BAPI_ACC_GL_POSTING_POST to do the postings on the GL accounts. Constraints in the Demo Environment The demo environment was made with a real business scenario in mind, but the following items need to be addressed in a live implementation: No exceptions and error handling are implemented in the demo environment, except order rejection (for example, partial delivery). In Microsoft Dynamics NAV, both XMLports and the XML DOM have been used to integrate with SAP XI, because XMLports has some drawbacks regarding Namespaces in XML Documents (mandatory in SAP XI). A minimum of SAP and Microsoft Dynamics NAV customization is required to implement this solution (for example, user exit in SAP, Microsoft Dynamics NAV XML DOM). 7 MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

8 Conclusion The Multi-Site and International Organization demo environment provides a realistic scenario of the integration between SAP R/3 and Microsoft Dynamics NAV. This demo can be used as the starting point for Multi-Site and International Organization implementations with SAP and Microsoft Dynamics NAV. It is also interesting to investigate other integration brokers between SAP and Microsoft Dynamics NAV, like Microsoft BizTalk Server and Commerce Gateway in Microsoft Dynamics NAV. About Microsoft Dynamics Microsoft Dynamics is a line of financial, customer relationship, and supply chain management solutions that help businesses work effectively. Delivered through a network of channel partners providing specialized services, these integrated, adaptable business management solutions work like and with familiar Microsoft software to streamline processes across an entire business. For more information about Microsoft Dynamics, go to The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, this document should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This white paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these 8 MULTI-SITE AND INTERNATIONAL ORGANIZATIONS: INTEGRATION OF SAP AND MICROSOFT DYNAMICS NAV WITH SAP NETWEAVER

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