SAP and ERP: A Beginners Guide
What is SAP?
SAP, which stands for Systems Applications and Products, is the leading vendor of Enterprise Resource Planning (ERP) software and related enterprise applications.
A company’s ERP system enables its customers to run their business processes, including accounting, sales, production, human resources and finance, in an integrated environment.
The neat integration of SAP ensures easy and smooth information flow between different SAP components and helps with implementing financial process and legal controls.
According to SAP’s 2019 corporate fact sheet more than 437,000 customers in 180 countries use the company’s services. Around 80% of users are small and medium size enterprises which is a new development as the company has only recently changed its focus from large enterprise organisations to SMBs.
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- SAP customers include:
- 92% of the Forbes Global 2000 companies
- 98% of the 100 most valued brands
- 100% of the Dow Jones top scoring sustainability companies
- Their customers distribute:
- 78% of the world’s food
- 82% of the world’s medical devices
- 77% of the world’s transaction revenue touches an SAP system
SAP Application Modules
There are 2 Types of SAP ERP system Modules: Functional Modules and Technical Modules. All SAP Modules integrate with each other with functionality and provide the best solution for a Business.
Functional SAP ERP Modules:
- Human Resource Management (SAP HRM), also known as Human Resource (HR)
- Production Planning (SAP PP)
- Material Management (SAP MM)
- Financial Supply Chain Management (SAP FSCM)
- Sales and Distribution (SAP SD)
- Project System (SAP PS)
- Financial Accounting and Controlling (SAP FICO)
- Plant Maintenance (SAP PM)
- Quality Management (SAP QM)
Technical SAP ERP Modules:
- SAP Basis
- SAP Security
- Advanced Business Application Programming (SAP ABAP)
- High Performance Analytic Appliance (SAP HANA)
- SAP NetWeaver
- Information Systems Management (SAP IS)
- Customer Relationship Management (SAP CRM Technical module)
- Exchange Infrastructure (SAP XI)
- SAP Solution Manager
The main reason businesses implement ERP systems is their need for an improvement in internal processes and overall business performance They also look to reduce labour costs, IT expenses and improve interactions between staff and companies.
Let’s have a look at some main advantages of an ERP system:
- Total Visibility – This benefit of ERP is one of the biggest selling points for the software. ERP allows total access to every important process in your business by making data from every department easily accessible to you and your senior management.
- Improved Reporting and Planning – Implementing an ERP suite across departments means your organisation has a single, unified reporting system for every process which can generate useful reports and analytics at any time.
- Complete Customisation – Most ERP vendors offer several applications that can be implemented together according to business needs.
- Improved Efficiency – Along with reduced IT and training costs, an ERP can reduce the time and effort required by your workforce to carry out their daily activities. Properly implemented, an ERP can greatly reduce or eliminate repetitive manual processes, thus freeing up team members to focus on revenue-affecting tasks.
- Data Security and Quality – One of the biggest advantages of an ERP system is data security. After all, at the heart of the ERP concept is data. Sharing data across functional silos such as customer service, sales, marketing and business development enhances collaboration throughout a company. The other side to widespread data access is controlling who can see and edit the information. ERP solutions have intrinsic controls to ensure the security of your data.
As we can see the ERP system has very many benefits so you would think that every company should implement it, however it is also important to look at some disadvantages before making up your mind.
Some of the disadvantages include:
- The cost of the ERP Software. If you choose to invest in a traditional ERP, you could easily end up spending five figures for a single license. The upfront cost of the software alone can be prohibitively high.
- The cost of implementation and maintenance. While the software alone is a major investment, the implementation process can be even more expensive. Businesses must take into account the cost of manpower and time necessary for a successful deployment.
- The customisation processes. Customisation is one of the best aspects of ERP, but it can easily and quickly get out of hand. Customising your ERP software takes a lot of time, effort, expertise and money.
- The complexity. ERP software solutions provide numerous capabilities, but that also means the software can be complex and difficult to use. It’s not unheard of for companies to get swept up in all the potential of an ERP but fail to plan properly for its implementation.
Future of SAP
For most companies, the advantages of ERP systems often outweigh the disadvantages. The potential for totally streamlined business functions and boosts in productivity over the long-term makes the benefits of implementing ERP systems a worthwhile investment of time and resources. SAP is a global leader in ERP solutions, therefore, we believe SAP will aggressively continue its development and growth in the future, and here at Cavendish Professionals we are looking to support this growth by providing the best talent for businesses that use SAP systems.
We recruit for various SAP roles in the DACH area and currently looking for a German Speaking Associate Recruitment Consultant to join our Technology-SAP team. If this is of any interest to you, please get in touch.
Alternatively, if you are a client and have any recruitment requirements or you are a candidate who is looking for a new opportunity, do not hesitate to contact us via our Technology website.
The Journey of SAP