SAP ERP

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ERP
Developer(s) SAP AG
Written in C, C++, ABAP/4[1]
Type ERP
Website SAP ERP

SAP ERP or SAP ECC[2] is enterprise resource planning software made by the German company SAP AG. SAP ERP incorporates the key business functions of an organization. ECC (ERP Central Component) is software version, released as ECC 5.0 in 2004.

Overview[edit]

SAP ERP is the name of the applications in the SAP Business Suite (and SAP Business All-In-One software). It contains the following:[3]

SAP ERP Core Finance:

  • Accounting and Financial Close
  • Management Accounting
  • Travel Management

SAP ERP Core Human Resources:

  • Core Human Resources
  • Time and Attendance Management

SAP ERP Procure to Pay:

  • Sourcing and Contract Management
  • Operational procurement
  • Inventory and Warehouse Management
  • Invoice and Payables

SAP ERP Plan to Product:

  • Production Planning
  • Manufacturing Execution
  • Inventory and Warehouse Management
  • Product and Project Management
  • Maintenance and Quality Management

SAP ERP Order to Cash:

  • Order and Contract Management
  • Inventory and Warehouse Management
  • Accounts Receivable

SAP ERP Request to Service:

  • Service Management
  • Service Parts Management
  • Service Project Management

Development[edit]

SAP ERP was built from modules comprising the former SAP R/3. SAP R/3 through version 4.6c consisted of various applications on top of SAP Basis, SAP's set of middleware programs and tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the SAP Web Application Server. Extension sets were used to deliver new features and keep the core as stable as possible. The Web Application Server contained all the capabilities of SAP Basis.

As a result of marketing changes and changes in the industry, new versions of SAP have been released. The first edition of mySAP ERP was launched in 2003 and bundled previously separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM) and extension sets. The SAP Web Application Server was wrapped into NetWeaver, which was also introduced in 2003.

A complete architecture change took place with the introduction of mySAP ERP edition 2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC). The SAP Business Warehouse, SAP Strategic Enterprise Management and Internet Transaction Server were also merged into SAP ECC, allowing users to run them under one instance. Architectural changes were also made to support an enterprise service architecture to transition customers to a services-oriented architecture. SAP HANA which is a combination of In-memory software and hardware can improve data processing at extremely high speeds.

Implementation[edit]

SAP ERP consists of several modules, including utilities for marketing and sales, field service, product design and development, production and inventory control, human resources, finance and accounting. SAP ERP collects and combines data from the separate modules to provide the company or organization with enterprise resource planning.

Although there can be major benefits for customers of SAP ERP, the implementation and training costs are high. Many companies experience problems when implementing SAP ERP software, such as failing to specify their operation objectives, absence of a strong commitment or positive approach to change, failing to deal with organizational differences, failing to plan the change to SAP ERP properly, inadequate testing, inadequate training. All these factors can mean the difference between having a successful implementation of SAP ERP or an unsuccessful one.

If SAP ERP is implemented correctly an enterprise can go from its old calculations system to a fully integrated software package. Potential benefits include efficient business process, inventory reduction, and lead time reduction.SAP ERP provides an integrated solution that incorporates the key business functions of an organisation.

An article in the IEEE Transaction on Engineering Management journal reports an industrial case in which senior management successfully dealt with a troubled SAP R/3 implementation in an international fast moving consumer goods (FMCG) company during 2001 and 2002.[4]>

Deployment and maintenance costs[edit]

Effectively implemented SAP ERP systems can have cost benefits[citation needed]. Integration is the key in this process. "Generally, a company's level of data integration is highest when the company uses one vendor to supply all of its modules." An out-of-box software package has some level of integration but it depends on the expertise of the company to install the system and how the package allows the users to integrate the different modules.[5]

It is estimated that "for a Fortune 500 company, software, hardware, and consulting costs can easily exceed $100 million (around $50 million to $500 million). Large companies can also spend $50 million to $100 million on upgrades. Full implementation of all modules can take years," which also adds to the end price. Midsized companies (fewer than 1,000 employees) are more likely to spend around $10 million to $20 million at most, and small companies are not likely to have the need for a fully integrated SAP ERP system unless they have the likelihood of becoming midsized and then the same data applies as would a midsized company.[5] Independent studies have shown that deployment and maintenance costs of a SAP solution can greatly vary depending on the organization. For example, some point out that because of the rigid model imposed by SAP tools, a lot of customization code to adapt to the business process may have to be developed and maintained.[6] Some others pointed out that a return on investment could only be obtained when there was both a sufficient number of users and sufficient frequency of use.[7][8] Deploying SAP itself can also involve a lot of time and resources.[9]

SAP Basis[edit]

After extensive developments in SAP, it is now divided into 2 subgroups stating Basis into one and Security into other(Previously Basis consultants used to work on both basis as well as Security issues).

To know more precisely the broad difference between SAP basis and SAP security, it is worth looking into the searchsap website. [10]

The different Certifications that can be done on SAP can be checked from SAP official website. [11]


ERP advantages and disadvantages[edit]

Advantages
  • Allows easier global integration (barriers of currency exchange rates, language, and culture can be bridged automatically)
  • Updates only need to be done once to be implemented company-wide
  • Provides real-time information, reducing the possibility of redundancy errors
  • May create a more efficient work environment for employees[5]
  • Vendors have past knowledge and expertise on how to best build and implement a system
  • User interface is completely customizable allowing end users to dictate the operational structure of the product
Disadvantages
  • Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high
  • Inflexibility - vendor packages may not fit a company's business model well and customization can be expensive
  • Return on Investment may take too long to be profitable
  • Implementations have a risk of project failure[5]

See also[edit]

References[edit]

  1. ^ Lextrait, Vincent (January 2010). "The Programming Languages Beacon, v10.0". Retrieved 14 March 2010. 
  2. ^ "Brief History of SAP ERP Applications - R/3 and ECC" on YouTube
  3. ^ Serafimovski, Petar. "ERP Software from SAP". SAP - ERP Software. SAP AG. Retrieved 1 July 2014. 
  4. ^ Carlson, Dillon (January 2008). "Rescuing Troubled Software Projects by Team Transformation: A Case Study With an ERP Project". IEEE Transaction on Engineering Management 55 (1): 171–184. doi:10.1109/TEM.2007.912933. 
  5. ^ a b c d Monk, Ellen F.; Wagner, Brej J. (2009). Concepts in enterprise resource planning (3rd ed.). Boston: Thomson Course Technology. pp. 23–34. ISBN 978-1-4239-0179-2. 
  6. ^ Everett, Cath (2008-02-13). "Companies warned over custom SAP costs". UK: zdnet. Retrieved 2009-03-08. "Around 90 percent of European SAP customers could save six- or seven quid each year by avoiding the creation of bespoke code on top of the ERP platform, an IT consultant has claimed" 
  7. ^ Vance, Ashlee (2003-03-31). "SAP costs too much – customers ROI challenged". UK: The Register. Retrieved 2009-03-08. 
  8. ^ "Nucleus Research finds 57 percent of SAP Reference Customers have not Achieved a Positive ROI". Nucleus Research. 2003-03-31. Retrieved 2009-03-08. "Customers will see benefits after lengthy implementations, but many deployments anchored down by excessive consulting costs" 
  9. ^ "How much does SAP costs me?". UK: web-geeks. Retrieved 2009-03-08. 
  10. ^ http://searchsap.techtarget.com/answer/How-to-choose-between-SAP-Basis-and-SAP-security-courses
  11. ^ https://training3.sap.com/shop/catalogue/by-role
  • Gargeya, VB 2005, ‘Success and failure factors of adopting SAP in ERP system implementation’, Business Process Management Journal, Vol.11, No.5, pp501–516, Retrieved 21/04/2010.
  • In White Paper Review, Industry Week OCT 2009, ‘ERP Best Practices: The SaaS Difference, Plex Systems, Retrieved 21/04/2012.
  • Malhorta, A & Temponi, C 2010, ‘Critical decisions for ERP integration: Small business issues’, International Journal of Information Management, Vol. 30, Issue No.1, Pages 28–37, 21/04/2010, Science Direct.

External links[edit]