What Is the SAP Software System?
What Is SAP ERP?
SAP is a German multinational software company known for making enterprise resource planning (ERP) software. ERP software allows organizations to manage business operations, and usually refers to suite of modular applications that collect and integrate data from different aspects of the business. While it is the sole focus of this article, SAP is just one provider of ERP software. Others include: Oracle, Microsoft, Infor Orbis, and Epicor.
Below is a general overview of SAP's modules for enterprise management, implementation methods, and where it stands amongst its competitors.
History of SAP
The product of five ex-IBM employees, SAP started in 1972 as a small software company in Germany with just one customer. The company's name stands for Systems, Applications & Products. Its founders had a vision of producing software that could process data when a user wanted it, rather than in overnight batches as earlier software did. Their first product was a modification of IBM's punch-card data storage, which stored data mechanically and required overnight processing. For their client, the German branch of Imperial Chemical Industries, SAP developed a real-time payroll and punch-card system in 1972.
SAP's ERP started as R/2, named for its real-time architecture and two servers. In later years it was called R/3, for three servers: the application server, production server, and database server. In 2006, SAP released the latest version, ECC 6.0, and in 2013 an Enhancement Package (EHP7) was released.
SAP's Enterprise Resource Planning Modules
SAP's Enterprise Resource Planning Modules
SAP is a leader when it comes to neatly integrated ERP software; its various departmental applications work symphonically. Beyond its basic models, SAP provides industry-specific add-on solutions. The SAP ERP suite contains an enormous number of modules, and the main categories are:
Accounting:
- Finance (FI)
- Investment Management (IM)
- Project Systems (PS)
- Controlling (CO)
- Enterprise Controlling (EC)
- Financial Supply Chain Management (FSCM)
Logistics:
- Material Management (MM)
- Sales and Distribution (SD)
- Logistics Execution (LO)
- Warehouse Management (WM)
- Plant Maintenance (PM)
- Customer Service (CS)
- Fleet Management (FM)
- Quality Management (QM)
- Production planning (PP)
- Environment, Health, and Safety (EH&S)
Human Resources:
- Organization Management (HR-OM)
- Personnel Management (HR-PM)
- Personnel Administration (HR-PA)
- Personnel Development (HR-PD)
- Personal Time Management (HR-PT)
- Payroll (HR-PY)
- Training and Event Management (HR-TE)
- Learning Solutions (HR-LSO)
- Compensation (HR-CM)
- Enterprise Compensation (HR-ECM)
- Benefits (HR-BN)
- Recruitment (HR-PB)
- Loan (HR-LN)
- Advance Business Application Programming (HR-ABAP)
Technology:
- Cross-Application (CA), includes classification systems and workflow
- Basic Components (BC or BASIS)
- Programming (ABAP)
- Security and Authorizations
Other Modules (requiring separate installation):
- Business Warehouse (BW)
- Business Intelligence (BI)
- Knowledge Warehouse (KW)
- International Demonstration and Education System (IDES)
- Customer Relationship Management (CRM)
- Master Data Management (MDM)
- Supplier Relationship Management (SRM)
- Exchange Infrastructure (XI)
- Process Integration (PI)
- Global Trade Services (GTS)
- Strategic Enterprise Management (SEM)
- Business Consolidation and Sourcing (BCS)
- Business Planning and Consolidation (BPC)
- Corporate Finance Management (CFM)
Some of these modules, particularly those in Finance and Investment Management, can be broken down into sub-categories of modules, such as Accounts Payable or Receivable, Investment Orders, or Investment Support. Specific business operations and industry requirements will determine which modules are needed.
Finance, Controlling, Sales and Distribution, Material Management, and Human Resources are some of the most important sub-modules in SAP. Depending upon the organization needs, a client can buy whatever modules needed. For example, a client can buy FI, SD and MM modules only without buying CO and HR modules.
SAP Modules
As I mentioned earlier, SAP is an ERP system that handles almost all department of an organizations. SAP handles an organizations's Finance , Controlling, Human Resource, Sales, Distribution, Material management, Warehouse, Production, Security, Research and many other departments. Not just that but SAP has a special industry specific solutions for almost all industries such as manufacturing, Pharmaceuticals, Insurance, Security, Finance, Treasury etc.
SAP FICO, SD and HR are most important modules. FI and CO modules controls finance and controlling respectively. SD controls sales and HR controls Human Resource departments. FICO is a base module which gets highly connected to SD, MM, HR and PS modules.
Let's just talk about some basic SAP modules those are useful for all domains.
Finance (FI), Controlling (CO), Sales & Distribution (SD), Material Management (MM) and Human resources (HR) are some of the most important sub modules in SAP. Depending upon the organization needs, a client can buy whatever modules needed. For example, a client can buy FI, SD and MM modules only without buying CO and HR modules.
What is the most important module in SAP according to you?
Key ERP Modules in Detail
FI: Finance
Finance is the base module. The vital areas it covers includes:
- General Ledger (GL):
- Accounts Payable (AP)
- Accounts Receivable (AR)
- Asset Accounting (AA)
Taken together, SAP FI and CO are known as FICO and are the most important and popular of the SAP modules.
CO: Controlling
Controlling is a kind of sister module for FI, used for internal reporting, documenting actual events, and informing management decisions by coordinating events with actual and plan data. It includes:
- Cost Center Accounting (CCA)
- Profit Center Accounting (PCA)
- Product Costing (PC)
- Profitability Analysis (PA)
- Internal Order (IO)
SD: Sales and Distribution
Sales and Distribution tracks sales and it is also heavily tied up with Material Management. Components of SD include:
- Customer Master Data
- Sales Inquiry
- Delivery and Goods
- Sales Organizations
- Sales Conditions
- Sales Order Processing
- Billing
Billing is also handled in the FI module.
HR: Human Resources
Human Resource modules handle all personnel information, such as hiring, salary, employee benefits, and so forth. It is highly integrated with FI and CO modules. Its components are:
- Organization Management (OM)
- Personnel Management (PM)
- Personnel Administration (PA)
- Personnel Development (PD)
- Personal Time Management (PT)
- Payroll (PY)
- Training and Event Management (THE)
- Learning Solutions (LSO)
- Compensation (CM)
- Enterprise Compensation (ECM)
- Benefits (BN)
- Recruitment (PB)
- Loan (LN)
PS: Project System
The Project System module assists with both large- and small-scale projects, such as a product launch, building a manufacturing facility, or holding a conference. PS comprises:
- Budgeting
- Planning
- Forecasting
- Work Breakdown Structure (WBS)
- Breaking down processes into individual activities (work packages)
- Distinguishing between externally and internally financed projects
Like HR, the PS module is highly integrated with the FICO modules.
SAP modules in details
Here I try to explain some of the top modules in more details.
SAP FI (Finance) : Finance module consider to be the base module. It covers vital areas such as General Ledger (GL), Account payable (AP), Account Receivable (AR) and Asset Accounting (AA). SAP FI and CO together known as FICO and it is consider as King of SAP modules.
Controlling (CO): Controlling is kind of sister module for FI. Controlling mostly use for internal controlling and internal reporting. It includes cost center accounting, (CCA), Profit center accounting (PCA) Product costing (PC), Profitability Analysis (COPA) and Internal Order (IO).
Sales & Distribution (SD): SD is predominantly controls sales and it is also heavily tied up with MM. It controls customer master data, sales, plants, sales organizations and sales conditions.
Human Resource (HR) : HR modules handles all human resource activities such as resource hiring, salary, employee benefits etc. It is highly integrated with FI and CO modules.
Project System (PS) : Project system module is a special for project related activities. It comprise budgeting, planning, forecasting, work breakdown structure for projects. PS module is again highly integrated with FICO modules.
SAP Implementation
What Is ASAP Methodology?
ASAP Methodology is a standardized road map forefficiently and completely implementing an SAP system. Generally, it consists of the following phases:
- Project Preparation: Initial planning, setting of goals and timelines, and identifying team members.
- Scope Validation: Achieve an understanding of how the organization intends to use SAP for their business goals, including the identification of business process delta requirements and how SAP can provide solutions for current processes. Consists of extensive process documentation.
- Realization: Once the business delta requirements have been defined, this phase moves forward with the implementation of those requirements. Also includes testing in time-boxed iterations before going live.
- Final Preparation: Completion of cutover activities, such as rehearsal and end-user training. Prepare to go live.
- Go-Live Support: SAP modules go live with sustained support.
- Operate: Fine tune applications and interactions with applications.
There are a few variations on the standard methodology, such as an Agile method which replaces the Scope Validation phase with a Lean Blueprint phase. The required method will depend on your organization's specific needs.
Market Share and Competition
ERP Market Share
SAP Market Share and Revenue
SAP is a leader in ERP industry. As recently as 2013, SAP controlled the largest single share of the worldwide ERP software market at 24 percent. Its closest rival was Oracle, with its 12 percent market share. The company's full-year revenue for 2014 was €17.56 billion, up 4% from 2013. According to Forbes, the growth could be attributed to a surge in cloud subscriptions as the company shifts its focus to cloud-based software.
Although Oracle is a leader in data storage, SAP is the best in integration among modules. Moreover, SAP's HANA product poses a strong challenge to Oracle's dominance in data storage. SAP ERP is most adaptable to different business models and needs. SAP is a reliable ERP system for both large multinational companies and small organisations.
Further Reading on SAP
This has been a general overview of SAP ERP software, including the available modules, implementation methodology, and its market share. The following articles go more in-depth into specific SAP issues:
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2013 ktnptl
Related
Comments
HI, CAN ANYONE HELP ME IN •Accounts Payable (AP)
I've got a list of street addresses in numerical order. Is there any functionality on the SAP system to put this list of street addresses in Alphabetical order?
Is there any feasibility to transfer the items automatically to another location which are become short expiry through the SAP system?
This website has given me a wonderfull knowledge...
so thanks
This information is of great use...........I thoroughly read it and found many hidden facts uncovered.........Thanx
How to download SAP EDUCATIONAL VERSION?
Can you please give me more sample of sap bec i had an interview for a job and they using the sap software, i dont know how to used it and i had no idea about sap, can you give me idea how to use it please thank you
Thanks
This article gives a good idea about SAP for a beginner, thanks.
Dear Sir
Thank you for this. May i know if there is any were to get training of this via online?
I'm quite new to this exciting world of IT & Business and quite frankly I'm seriously at a loss as to what and where exactly I fit in. I've been pondering on settling between SAP & Salesforce a d though I'm yet to decide, this article has been most enlightening and helpful. Grateful to have come across it, cheers.
Hi , I completed.B.Tech (EEE) I am working as electrical design engineer, I have 5 year experience, my job involves developing detail drawing, construction management, Now I am looking to switch over my domine to SAP , I planning do SAP MM , am I selected a right module please advise me . If not please suggest which is better suitable module
Thanks
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Could you add details about cloud related developments? (Like SuccessFactors in Sap hr)
Thank you, I used this article for a research paper but unfortunately have no name to attach for the author.
Great information.
I got clear information about SAP ....
i did graduation in B.a now i want to enter in SAP.. can you guide me what should i do which module ????
Really, good article for familiarization about SAP
HI what's the best way to get back into SAP HR after a career break of 7 years? What should I focus on learning in order to become hire able again?
Thx
Hi,
its a very good explanation to get an idea about what is a SAP and its modules. I request someone to share SAP fico material through which we can become experts. If possible please send me a copy to sanjaynidamanuri@gmail.com
Hi,
I went through all the conversation and found it very useful. I would like to than hub author for such a nice information and quick reply of queries.
I would like to ask few things. As I am preparing for sap sd and it is not any recognised institute. Once my course is completed then how and where can i apply for a freshers job? Also please share some SD related documents if posible.
My mail id- imanojdey@gmail.com.
Thanks & Regards
Manoj
its a very good explanation to get an idea about what is a SAP and its modules. I request someone to share SAP SD material through which we can become experts. If possible please send me a copy to sunilvaghela902@gmail.com
- AUTHOR
It all depends what's your interests are. If you are interested/experienced in accounting, then go for FICO if not and still have business process interest then choose SD/MM/PP/WM modules. If you are interested in technical reporting and coding then choose ABAP.
Please let me know your experience and education so I can better help.
- AUTHOR
Hello Chitta Sir,
From your accounting experience, it seems you are a perfect fit for FICO module. If you really want to get in SAP career, FICO will be a comfortable module. I will be emailing you some more details in couple days.
Regards
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For new starter ?what would be the best to start?
Dear,Sir, i have completed B.COM , and i am working as accountant since 5 year in TALLY . ERP 9 . which sap module is better and how can i achive this . give suggestion in my mail-id
nayakchitta11@gmail.com
can some one send me informations aabout sap, what is it,functions and applications especially in analytical chemical laboratory.
:oti-amoako@gmx.ch
Hi,
Can anyone please share the SAP - FI material with me?
its_isuri@yahoo.com
Thank you.
You are very thankful, today I Known in details about ERP,SAP & modules with explaination.
- AUTHOR
Hello Siri,
SAP HR is a hot module and I am sure you can excel with your MBA in SAP.
Earlier, companies were not keen to install SAP HR module but nowadays they want to implement it to be in sync with other departments. You can get better success in SAP HR than as an IT recruiter.
Hi,
Am done with my MBA with HR and Marketing as my specializations .
Could someone advise me what to take in HR module of SAP and what to be done further.
I have got some offers as IT recruiter but didnt go for it.
very nice explanation about SAP.
Thank you very much! You just saved my grades, no worries, I place the link and did not claim any of it
Thank you for your valuable information and suggestions..
It's very useful.
Thank you very much...
Your explanation, but I am new person, I want to learn SAP software. Give me some important tips for learning the SAP software.
- AUTHOR
Hello Priya,
ERP is a general term for many software. SAP, Oracle, PeopleSoft, JD Edward, Dynamics and many others considered as ERP software. In short, SAP is one of the ERP software. For example, Norton is an antivirus software. Let me know if you need more clarification on this.
- AUTHOR
Hello Brijesh, with MBA and 18 years experience in accounting is a great plus for SAP FICO. Actually you are in a great position to be in SAP FICO as you can easily get all the accounting entries. If you are in India, I suggest to go with a reputed institute which also help you get certification. To get a starting job in SAP, certification helps in a great way.
Hi i m priya studying MBA in agriculture i need ur help in understanding the difference between ERP & SAP. As my concept is new in SAP i want TO Know what is basic difference SAP & ERP. plz if you can provide me the answer or can mail me on tashu_singh18@yahoo.com
Very-very useful and to the point information. I was looking for some basic info on SAP but have got more than required now after reading your article. Nice piece of information and the right guidance spirits. I Salute you..
I'm MBA in finance and have 18+ experience in Accounts only..can you please help me to start with learning SAP..how should I go for it, best institutes with a reasonable fee..practical experience & all.
Plss email me on brijeshaneja@gmail.com
once again thanks for sharing on SAP..
- AUTHOR
Appreciate your understanding lyke.
- AUTHOR
Yes SAP has custom suit for all industries including medical field. Please check with SAP directly for getting more understanding and architecture diagram of the suit.
Wow! You really did justice to your explanation of SAP for beginners. Excellent articulation, perfect presentation and straight-to-the-point analysis. Welldone sir!
Hello is it to use sap in a large hospital
- AUTHOR
Hello Sudheer, SAP HR is a great field and it is in good demand nowadays. Unfortunately I have information and knowledge in SAP FICO , SD and MM only. But I recommend you to take a course/coaching instead just studying yourself. This way you will be better prepared for the job. Hope this is helpful.
Hi,
It is very useful for the beginners to know what exactly SAP is. Right now I am learning SAP HR. Please send the material and some important questions on it. If you have possibility, Please share the material and your views to sudheerreddy257@gmail.com. Have a good day.
Looking forward to hear from you...
What learn in sap???
I'm an MIS major and i am taking SAP test next semester , I am just wondering what are the most important point to pass this test with the minimum score that is accepted by the orgnizatons ?
I would be more thankful if you email them to amro-khan@hotmail.com !
I hope to hear from you sooner
there is any course available to learn sap
- AUTHOR
Thanks a lot Amruth
Hi I'm working at the Post office. And I wanna study FICO. N I'm also interested in HR.
My question is. Do I need to have a Finance or HR certificate/Diploma. In order to apply fo those posetions.
Thanx for the explanation of SAP
ya its really amazing to understand what is the sap what is role in industry thank q very much .
I have working in oil industry and I'm interested by SAP training, could you please advise me a center from which I can get the course and material to learn this ERP.
Please send me any information about SAP colbybfr@hotmail.com
Can you please send me information on SAP (sales & distribution)
Sirliko15@gmail.com
Thanks
- AUTHOR
Thanks.
- AUTHOR
Thanks Sudhin.
- AUTHOR
Hello Smruti, It really depends what's your interest. If you have some understanding in Finance /Accounting than SAP FICO, otherwise SAP SD, SAP MM are nice modules. But if you are more technical, go for SAP HANA. It will be a hotcake in future.
- AUTHOR
SAP has a warehouse solution. It is called SAP Warehouse or SAP WM. It is closely related to SAP material management (SAP MM) and SAP Production Planning (SAP PP).
Very good information to a beginner.
Good info...
sir, i am compliting my MCA,,,so i wang go with SAP,,,pl tell this is best for me or not...pl
That's not just logic. That's really sensbile.
Sir presently i am serving in air force and very soon i am going to leave this service after completion of 20 years and further i want to do some job related to sap/erp. Please suggeste me which module of sap will be helpful for me to find the related job.
Excellent articulation and very easy to learn basic thing on SAP for beginners:)
Please provide more details on SD and please email it to me my ID is akkinen161983@gmail.com
I would like to know basic information on CERPS and MERPS.
kindly request you to do the needful.
- AUTHOR
R/2 is two tier architecture while R/3 is three tier. There were R/2 before but it has been replaced by R/3 long ago.
Really its very important information ...But please give clear difference between R/2 & R/3
Really thank you for your clear and understandable explanation. I wonder if you can draw a picture of the relationship of 3 servers you mentioned in R/3 ,it will be very helpful for beginners to understand deeply the differences between R/2 and R/3.
Thank you
- AUTHOR
SAP is very powerful and robust ERP system. As I mentioned in the hub, it contains many different modules and industry specific solutions. Technical knowledge is not mandatory to learn SAP, rather you need to have good business sense and ability to learn new things. You can learn this software from SAP itself and from SAP authorized partners. SAP certification is not necessary but it can be useful for beginners to get job.Once you get a project, it all depends how you can learn from there. There are many materials available on net and I will try to provide some more materials via my hubs and blog. Hope you all succeed in what you do.
I also wanted to know abt sap more...& from where I complete the certification...in it pls tell me
I see SAP to be a very powerfull software which can lead most of us to become more better, if anyone cane send to me a copy of SAP Material or Modules, please send to me on this address: josemateus78@yahoo.co.uk
Very useful info.......could someone share his SAP FICO material with me ?
ievonlah@yahoo.com
Good info...
- AUTHOR
Thank you very much all who like my article. I am planning to post more articles on basic understanding of each modules such as FICO, SD and MM. Please let me know if you have any better suggestions.
thanks for sharing SAP information..
Very useful. Can we share the knowledge with your nearest representative in Est Africa Region,especially in Rwanda?
muhiregedeon031@ gmail.com.
Thanks for the information about SAP its help me a lot.
RITA
hi. am a BA student completed course in coress. wat kind of course s better fr me to get good job pls suggest.
I didn't know the existence of SAP till my friend told me he wants to learn Enterprise resource planning.But after reading this article,I know what is SAP,and what it can do.
Thanks
Hello! Thanks for sharing god information may i know what is the procedure to sit in exam? and which is most demanding module ?
Thanks
i want to know more abaout it and also want to know abaut all institutions in india which is cirtified.
e-mail id :subeersingh062@gmail.com
and thanks a lot
I got more knowledge about sap....thank u so much
Thanks for info!
My question: is it up to us which module we prepare or we need to study whole module? or also plz also give information how i get certification in SAP?
Want to join SAP course .
Please suggest me any institutions name where I can join course at Mumbai Chembur.
Jitendrapawar.1986@gmail.com
Hi,
its a very good explanation to get an idea about what is a SAP and its modules. I request someone to share SAP SD material through which we can become experts. If possible please send me a copy to lmoemba2000@yahoo.co.uk
Nice information,very use full to all those who wants to know about SAP.
Can you please share SAP-HR material?
Hi,
It was very good explanation about SAP. I am planning to learn SAP BO module. currently am working as Dot net developer. Am intrested to get into SAP. Because of low payscale, Can anyone suggest me........ Thanks.
l request some one to share SAP SD material through which we can become experts.If possible please send me a copy to zeal47@yahoo.com
It was very concise and well explained material... thanks for sharing the knowledge in a beautiful simple way
Hi,
it's a very good explanation to get an idea about what is a SAP and its modules. I request someone to share SAP MM material through which we can become experts. If possible please send me a copy to ashish.chavan8888@gmail.com.
Hi this is very fruitful plz share sap fico and it's sub modules or plz send Razab87@yahoo.com
Thanks
Thanks, this is what i needed realy
Excellent!! Introduction for SAP Aspirants.
I'am also doing my SAP SD in Bangalore. I like to be in the network of people who are already in the SAP SD, new comers and Experts. So below is my mail ID.
raveendra.hn1@gmail.com
I thank you once again for the author of this article and request you to share something more about SAP SD.
l request some one to share SAP SDmaterial through which we can become experts.If possilble please send me a copy to ruksanarazik@gmail.com
I request someone to share SAP SD material through which we can become experts. If possible please send me a copy to dheerajpathak21@gmail.com
I request someone to share SAP SD material through which we can become experts. If possible please send me a copy to mandar.shirodkar1691@gmail.com
Thanks for such a superb info and point to point info in such a user frndly language.. Is SAP tutorials available on youtube??
Sap has indroduces new version 0.9 can we know abou that version
Brief information about SAP for new beginners
Wow! A very detail and easy to understand article about SAP. Weldon.
I hope you will write about SD someday.
This is a good write up on SAP. Keep it up
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