SAP – Systems Applications and Products

What is SAP ERP?

SAP stands for Systems Applications and Products in Data Processing. It is ERP (Enterprise Resource Planning) software as well as the name of the company. SAP software solution is for managing business operations and customer relationships. SAP is widely used for enterprise level ERP software for large scale business.

In normal business process multiple teams and steps are required to be involved for buying to selling of goods. This process required manual tasks and more employees. It needs HR to hire more employees for process handling. SAP makes it easy and less manual for large and medium enterprise for normal business. SAP involve many automated processes and more automation options are available also. In turn it reduces manual task and employee efforts.

That is a typical business process for any manufacturing company. Some key inferences one could derive from the scenario would be.

  • It has many departments or business units
  • These departments or business units continuously communicate and exchange data with each other
  • The success of any organization lies in effective communication, and data exchange, within these departments, as well as associated third party such as vendors, outsourcers, and customers.

Based on the way communication and data exchanged is managed. Enterprise systems can be broadly classified as Decentralized System or Centralized System. Centralized System which is also called as ERP.

As SAP is ERP solution it has centralized solution. There are many benefits of centralized systems. Key benefits of the centralized system are:

  • It eliminates the duplication, discontinuity, and redundancy in data.
  • Provides information across departments in real time.
  • It provides control over various business processes.
  • Increases productivity, better inventory management, promotes quality, reduced material cost, effective human resources management, reduced overheads boost profits.
  • Better customer interaction and increased throughput. It also improves customer service.

SAP is vast application which need dedicated system and database for processing. New version of SAP is Hana which is cloud based scalable system. ERP SAP is not cost beneficial for small scale businesses as it required initial investment.