SAP is an ERP system that is used in the management of business processes in an organization.
The software was initially called Systemanalyse Programmentwicklung, which means System Analysis Program Development in German, but the name was later abbreviated to SAP.
The SAP software is an ERP software that is used to connect all the core parts of an organization into one by integrating the organizational business processes.
By what exactly is an ERP software?
ERP stands for enterprise resource planning. An ERP is a software application that is used to manage the core business areas in an organization, such as procurement, production, materials management, sales, marketing, finance, and human resources (HR).
But why do organizations use ERP software’s ?
Organizations use ERP software’s because other software applications work in silos. The standard software application works by decentralizing data management and storing its operational data in a separate database.
In order to manage the flow of data across these software’s, custom connections have to be made between these system.
If these connections are not built, the company employees would have to enter the same data in numerous systems. Which can lead to duplication of efforts, data duplication, erroneous data entry, data inconsistencies, process bottlenecks, numerous handoffs and increased employee frustration.
By centralizing the data management, the SAP software provides a single data entry option which would be source of the truth in the database. Once the data is entered by the end user then it accessible by all approved users in the organization and is can be used by the different departments in the organization.
This helps the organization to manage its business processes by allowing the employees to access to real-time organizational data.
This data can be used to create workflows that would help improve operational efficiency, increase productivity and improve the customer’s experience.
How how does the SAP software work?
SAP works by centralizing the data entry process.
For example, when a new vendor is accepted by the purchasing department, the purchasing assistant would input the vendor’s details into the SAP software.
When a purchase is made from that vendor, the vendor data that was inputted by the purchasing assistant would be used by the purchasing assistant to purchase the goods, used by the warehouse assistant to receive the goods and used by the finance office to pay the vendor.
This reduces the need for all these department to reenter the vendor’s details in the application. Which reduces potential data entry error, duplication of effort, duplication of data and data inconsistencies.
With the SAP software, all employees can make updates to the same data and view the data entered by other departments in real time which helps improve operational efficiency.
Another example of how the SAP application can improve the organizational business processes is the Production process:
When a customer wants to purchase some products, the sales agent can immediately check the SAP ERP application to see if there is enough stock to fulfill the customer’s order.
If there is sufficient stock, the sales agent can quickly confirm the sale. Once the sales order is placed, the ERP system can automatically start a customer billing process in the finance department and also automatically update the inventory information in real time.
If the inventory levels fall below the minimum acceptable levels due to the customer’s purchase then the production team would get an automatic notification and they can schedule to manufacture new products.
If the production team would need any additional resources in order to produce the products they can send in a request to the human resources department.
Concurrently i the raw materials levels fall below some preset acceptable level due to the planned production activity, the procurement team would receive an automatic alert requesting for more raw materials and they can preemptively purchase the materials.
By integrating the business processes across different business functions, each department is updated about upcoming requirements as soon as possible, which results in a more efficient business processes and increased customer satisfaction.
So what are the available SAP solutions ?
SAP offers numerous solutions based on the customers needs and they include the following :
- ERP and Finance.
- CRM and Customer Experience.
- Network and Spend Management.
- Digital Supply Chain.
- HR and People Engagement.
- Digital Supply Chain.
- Experience Management.
- Business Technology Platform.
- Digital Transformation.
