What is SAP Enterprise Resource Planning Software

SYSTEMS APPLICATION AND PRODUCTS IN DATA PROCESSING (SAP) is Enterprise Resource Planning Software and is the largest inter-enterprise software company in the world. This SAP business software aims to integrate every different module in a company with a very robust, customized and highly secured architecture. This software enables businesses to be done globally in a traditional way.

Why is SAP necessary?

Enterprise Resource Planning SAP software solution is essential for any business to be successful. For instance, a typical enterprise business follows a process in which the customer approaches the sales team to buy any product and the sales team approaches the inventory team to check with the availability of the product, if not available it approaches the production planning team to manufacture the product.

The proction planning team inturn checks with inventory team regarding the availability of the raw materials required to manufacture the product. In case of non-availability of raw materials, the production planning team purchases the raw materials from vendors and processes the raw materials for floor execution team from the product to get manufactured. After this the finished product is forwarded to the sales team who inturn delivers the product to the customers and updates the finance department regarding the revenue generated by the sale.

The production planning team also updates the finance department with the details of raw materials purchased from different vendors for the payment to be made. Finally every team reaches out to the HR team in case of any human resource related issues. Hence the success of any organisation depends on the how effectively every business units communicates and exchange data within themselves and associated third party.

Enterprise Software Systems can be classified into two

  1. Decentralized Systems
  2. Centralized Systems ERP

The main problem with Decentralized system is that the data of one department cannot be accessed by the other departments thereby increasing the data management cost also increasing the time of data collection resulting in customer dissatisfaction hence loss in revenue generated. This will also result in the organisation losing its reputation.

These problems could be overcome by Centralized systems (ERP) where data will be stored centrally thereby enabling data access to all the business units thereby increasing productivity, quality and also increases revenue.

SAP and its significance:

According to a study 80% of Fortune 1000 companies run SAP and 87% of global 2000 companies use SAP with the remaining 13% using oracle. There are different modules in SAP and these are categorized into functional and technical modules.

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