Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment. An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex and expensive computer systems in areas which will not use their full capacity.
Overview and origin of SAP
Originally the company SAP was founded by five (5) prior IBM employees in 1972 who wanted to create a real-time business data system. The first name chosen for the company was not Systeme, Anwendungen und Produkte in der Datenverarbeitung (or SAP) but instead, what we know today as the company SAP was originally called Systemanalyse und Programmentwicklung or in English, Systems analysis and program development. The company name and the ERP software application name of SAP stands for Systems, Applications and Products (Systeme, Anwendungen und Produkte in der Datenverarbeitung, in the original German) in Data Processing. It uses the concept of modules ("individual programs that can be purchased, installed, and run separately, but that all extract data from the common database"). SAP AG, the company that provides the enterprise resource planning solution has upgraded the package and launched it as SAP ECC 6.0 in 2005. ECC stands for ERP Central Component. The purpose of positioning it as ECC is to enable SAP to build and develop an environment of other products that can function upon the foundation of the central component.
SAP now are moving away from describing their system as a set of SAP Modules, and now are using the term ‘solutions’, which is much better, as follows:
• Human Resources
• Customer Relationship Management
• Supplier Relationship Management
• Product Lifecycle Management
• Supply Chain Management
• Business Intelligence
Business Benefits of using SAP as an ERP product SAP ERP delivers a comprehensive set of integrated, cross-functional business processes. With SAP ERP, you can gain the following benefits:
• Improve alignment of strategies and operations
o Run your enterprise in accordance with strategy and plans, accessing the right information in real time to identify concerns early.
o Pursue opportunities proactively.
o Achieve corporate objectives by aligning workforce and organizational objectives.
o Find the best people and leverage their talent in the right job at the right time.
• Improve productivity and insight
o Leverage self-services and analytics across your organization.
o Improve operational efficiency and productivity within and beyond your enterprise.
• Reduce costs through increased flexibility
o Use enterprise services architecture to improve process standardization, efficiency, and adaptability.
o Extend transactions, information, and collaboration functions to a broad business community.
• Support changing industry requirements
o Take advantage of the SAP NetWeaver platform's latest open, Web-based technology to integrate your end-to-end processes seamlessly.
• Reduce risk
o Solve complex business challenges today with SAP, your trusted partner for long-term growth, with 30 years of experience working with organizations of all sizes in more countries than any other vendor.
o Join SAP's world-class partner network, uniquely qualified to support the best business practices in more than 25 industries.
• Improve financial management and corporate governance
o Gain deep visibility into your organization with financial and management accounting functionality combined with business analytics.
o Increase profitability, improve financial control, and manage risk.
• Optimize IT spending
o Integrate and optimize business processes.
o Eliminate high integration costs and the need to purchase third-party software.
o Deploy other SAP Business Suite applications incrementally to improve cash flow and reduce costly borrowing.
• Gain higher ROI faster
o Install SAP ERP using rapid-implementation techniques that cost less than half what traditional approaches cost.
o Leverage preset defaults and prepackaged versions available for specific industries.
• Retain top performers
o Retain your top performers through clearly defined career and development plans.
o Link employees' performance to compensation programs such as variable pay plans and long-term incentives.
• Provide immediate access to enterprise information o Give employees new ways to access the enterprise information required for their daily activities.
• 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 exactly and customization can be very expensive
• Return on Investment may take too long to be profitable
• SAP ERP implementations have a risk of project failure
Companies using SAP
Today almost each and every medium to large scale companies are using SAP as theit ERP product. The list below is a few of the companies and their usage of SAP as an ERP product:-
Airbus: Transforming Travel ManagementAirbus is a leading manufacturer of aircraft, capturing roughly half of all orders for airliners larger than 100 seats. With 55,000 employees – many of whom travel – the company needed a better way to manage travel processes. Airbus is using SAP ERP Corporate Services to improve expense-report accuracy, better negotiate with providers, and enhance travel processes across the enterprise.
Brookshire Grocery Co.: Adding Value to the Business Brookshire Grocery Co. operates a chain of supermarkets in the southeastern United States, with 12,000 employees in 160 stores. Brookshire's is using SAP solutions to better evaluate results, improve decision-making, and deliver information faster.
Butterball LLC: Driving Improvements, Enabling Growth Butterball LLC is producer of the renowned Butterball turkey, one of America's leading poultry brands. Butterball is using SAP software to reduce costs, enable rapid acquisitions, realize return on IT investment, and drive business improvements.
Canadian National Railway Co.: Rebuilding Core Business Applications Canadian National Railway Co. is a leader in the North American rail industry. This company is leveraging SAP Custom Development to redesign its core efficiencies, set industry standards, become more competitive in the global marketplace, and builds a highly effective team.
Carolina Turkeys With 2,300 employees, Carolina Turkeys is the fourth-largest turkey company in the world. This company is using SAP solutions to adapt to rapid industry change, redesign business processes, and achieve new levels of growth and profitability.
Kraft Foods Inc.: Consolidating Business ProcessesKraft Foods Inc. is one of the world's largest food and beverage companies, with 2007 revenues of more than $37 billion. This global giant used SAP ERP to take advantage of shared services, leverage new business opportunities, and enable efficient acquisitions.
TransAlta: A Smoother Upgrade in Less Time TransAlta, a Canadian-based power generation company, operates 51 power plants throughout Canada, the United States, Mexico, and Australia. The company decided that acquiring the new functionality available with an SAP ERP upgrade would best position it for future growth. SAP ERP upgrade progressed more smoothly, required fewer people, and took less time than the previous upgrade.
Veeco Instruments: Saving Time Through AutomationVeeco Instruments is a high-tech manufacturing company with 1,200 employees. This company is using SAP ERP to automate its processes and achieve better business results.
Assessment of SAP’s business model and its impact on society
Utilizing SAP efficiently and optimizing its functionality is a daunting challenge. Based on the extensive usage and flexibility of SAP that can be leveraged for any industry sectors, I think that SAP is a great technology to drive multiple cross functional process and business into a single platform making it the most powerful ERP tool that exists. SAP has been conducting many review sessions and feedback from their end clients so as to make it more and more efficient. It reaches out to Subject Matter Experts from cross companies and cross platforms to reap the best benefits and include it within their product. With more than 35 years of experience, SAP supports more than 95,000 customers worldwide, with 140,000 installations in 120 countries. SAP's unique ecosystem consists of 47,598 team members, including 130,000 consulting and education employees and 7,700 service and support staff. And with 185,000 certified partner employees, 77 trainings centers, 7 global support centers, 9 custom development centers, and genuine 24/7 support, SAP can truly help you optimize your organizational and IT performance and maximize your business and IT success. I am sure that SAP would effect each and everyone in the society and every individual would get the benefits out of SAP. SAP is introducing new product for better usability of its products. SAP Business Suite is a bundle of business applications that provide integration of information and processes, collaboration, industry-specific functionality, and scalability. SAP Business Suite is based on SAP's technology platform called NetWeaver.
Built on an open, service-oriented architecture (SOA) – and powered by the SAP NetWeaver technology platform, SAP Business Suite offers companies an opportunity to transform business processes efficiently and integrate business processes that enable them to compete more effectively in their industry.
SAP Business Suite has five constituents:
• SAP CRM (Customer Relationship Management)
• SAP ERP (Enterprise Resource Planning)
• SAP PLM (Product Lifecycle Management)
• SAP SCM (Supply Chain Management)
• SAP SRM (Supplier Relationship Management)
List of ERP software packages