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What is an ERP system and why do we need it?

Any organization has a number of departments and business units with different responsibilities. The success of the organization can be measured by how well these departments communicate and exchange data within the organization itself or with a third party such as vendors, outsourcers, and customers. In the past, enterprises and organizations used old methods of data storage and exchange that were time-consuming and prone to human error, data loss and duplication of data. Today, businesses are increasingly moving towards using ERP in order to help them avoid these problems and allow them to grow and overcome barriers of currency exchange rates, language, and culture.       

 ERP stands for Enterprise Resource Planning. It is any centralized system that helps enterprises store all entered data into a single database, allowing all departments to work with the same information. Additionally, all this data can be organized, analyzed and made into reports to help make better business decisions faster. ERP systems bring together customer management, human resources, business intelligence, financial management, inventory and supply chain capabilities into one system.

The benefits of using an ERP include:

Improved collaboration/ money and time saving/ better analytics/ improved productivity/ happier customers/ simplified compliance and risk management/ better production planning and resource management/ better inventory monitoring and more.

 

What is SAP?

SAP (Systems, Applications and Products in Data) is an ERP system created and marketed by SAP SE, a German ERP multinational corporation founded in June 1972 and headquartered in Walldorf, Germany. SAP system consists of a number of fully integrated modules, which cover all areas of business management.

 

According to its 2018 corporate fact sheet, SAP serves more than 404,000 customers in 180 countries, of which 80% are small- and-medium sized businesses. On the Forbes 2018 list of "The World's Largest Public Companies," SAP was ranked the 12th-largest technology company, with 2017 revenue of $27.4 billion.

SAP Modules and Products

SAP has a number of modules that cover all business processes and integrate with each other. These modules are divided into two types, each of which has sub-modules.

The two types are:

1)      Functional modules like:

o   Financial Accounting and Controlling (FICO)

o   Human Resource Management (HRM)

o   Production Planning (PP)      

o   Material Management (MM)
Treasury (TR)

o   Quality Management (QM)

o   Sales and Distribution (SD)
Plant Maintenance (PM)

o   Project System (PS)

 

2)      Technical modules like:

o   SAP Basis

o   SAP Business Intelligence (BI)
SAP Business Information Warehousing (BIW)

o   Advanced Business Application Programming (ABAP)

SAP also has cross-application components, which can be implemented with any of the main modules. Examples of these are:

o   Document Management System

o   Classification

o   Product Lifecycle Management

 

SAP also has industry-specific applications like:

o   SAP for Utilities

o   SAP for Insurance

o   SAP for Oil and Gas

o   SAP Healthcare

SAP has many more products designed to meet virtually all possible business needs. It offers business software, industry software and software especially designed for small and midsize enterprises. A list of all SAP products, alphabetically ordered, can be found on SAP website https://www.sap.com/products.html  

Implementation

Building a SAP system is an integrated process that consists of many important phases. These are typically:

·         Phase 1 – Project Preparation

·         Phase 2 – Business Blueprint

·         Phase 3 – Realization

·         Phase 4 – Final Preparation

·         Phase 5 – Go-live Support

 

 

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