Even the smallest organizations are complex entities with many moving parts to manage — a factor that could degrade the overall performance of a business when the parts are not interacting efficiently. Without a centralized solution, information flows less freely between different components of an enterprise, and resources become increasingly wasted on paperwork or procedures. Every business, especially those dealing in information technology, needs a central nervous system.
Enter SAP — the leading provider of Enterprise Resource Planning (ERP) software, which enables businesses to streamline internal processes like accounting, human resources, and operations.
An ERP is usually made up of a common framework to be used enterprise-wide, with individual modules dedicated to more specific business processes or types of tasks. The framework enhances cross-sectional compatibility and interaction between wider processes, while the modules help employees and managers work more efficiently within the scope of their responsibilities. With SAP, organizations experience this functionality plus the added benefit of a cloud-based ERP.
What is SAP?
SAP is a leading provider of ERP systems in the software industry. To better understand this company and the importance of these tools, it’s valuable to explore examples and benefits, evaluate them within the context of a cloud-based future, review salient products and modules, some history, and finally how these tools integrate into existing systems. SAP the company and SAP the software are not interchangeable, here’s the distinction:
- The Company: SAP SE is an international software corporation which sells products for tracking customer interactions and business processes. The SAP acronym stands for Systems, Applications and Products (SAP). The company’s flagship offering is an ERP system that it provides to groups across dozens of countries and industries.
- The Software: SAP ERP is a set of integrated software for planning and managing all functions of an organization, from financials to operations. It is built from one central component (SAP ECC) and extended by various modules depending on the application. Utilizing this service-oriented architecture (SOA), SAP ERP can be agnostic to technology, other vendors, products, and business verticals. Both the company and the ERP software are often simply referred to as ‘SAP’.
SAP ERP allows businesses to run better, simplify their operations, and derive greater value from customers all while saving resources. Today, getting ahead of the competition means utilizing all kinds of data to derive salient business insights, and SAP SE’s various software offerings help millions of users and managers do just that.
A history of SAP SE
SAP began in Germany as a private partnership in 1972, incorporated by five former AI engineers from IBM. Initial clients and products were focused on software for financial accounting and payroll, including the first generation platform, which would eventually evolve into SAP ERP.
In 2004, SAP ERP underwent major infrastructural changes and integrations, introducing the central component and rolling other components together to support an SOA model. The last major release of the software in 2006 crystalised the platform in its present state, and is still supported with updates and new packages to-date.
Meanwhile, SAP SE’s many acquisitions, expansion to new markets, and embracing of the cloud and real-time analytic requirements, have all greatly expanded its portfolio of other software as well as its business network. Today, SAP is generally acknowledged as the largest multinational enterprise software company in the entire world, with a record user-base and established leadership in the ERP space.
SAP ERP: Smarter planning, agile decisions
SAP is one of the world’s largest software houses, an almost unquestioned leader in ERP systems, hence trusted to build the most stable, well-supported, and powerful platform. SAP ERP in particular leverages vast data enterprise assets, transforming them through their lifecycle into business value. This means improvements to the initial outlining of internal processes, as well as the proactive adjustments which modern businesses must make.
Take for example Plastic Omnium, a global automotive supplier with additional manufacturing specialization in sustainable and waste-management products. This company’s international reach complexifies requirements in its IT systems, while activity and growth in multiple verticals has meant a need to stay flexible.
For Plastic Omnium, improvements first came with the adoption of SAP systems allowing the development of custom interfaces, then with their standardization and automated integration thanks to Talend. Now Plastic Omnium’s managers can access fast, reliable, and valuable business information worldwide, and developers need not waste time on costly adjustments to their custom interfaces.
7 SAP ERP benefits to improve your business
The primary capability of any ERP system lies in the integration and regularization of business processes, translating to direct savings in manpower, time, and resources. However, this core function also leads to other advantages. SAP’s ERP provides organizations with the following benefits.
ERP platforms, like SAP ERP, break down barriers between individuals and processes by centralizing business data. This unification means faster company-wide updates and less need for costly synchronizing between groups and systems.
Global companies having to deal with differences in culture, currency, or language within their structure can effectively use an ERP to integrate better. An ERP also goes hand in hand with other paradigms, such as data modeling, and generally leads to important wider integrations within businesses.
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ERP systems generally operate near or in real time, giving users a live view into the mechanisms powering their business. A system with no latency reduces the risk of redundancy, whether in data, in the organization, or in an end-product. The built-in automation of various tasks also clearly contributes to greater efficiency.
Although the implementation of SAP ERP can be a significant investment in time and resources, vendors have decades of experience deploying these systems with deep knowledge of best practices. This technology’s maturity means that even initial adoption can be a smooth and efficient transition.
Process, financial, and legal controls often apply in every part of a business. SAP ERP implementations also come with the inherent benefit of fortifying adherence to rules and regulations, thanks to a common and accessible source of truth. The initial building out of an ERP platform also brings the attention of stakeholders to compliance, whereas other kinds of business planning might not.
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4. Empowering employees
Modules help individuals save time on frustrating rote work by automating tasks previously done manually. These individuals are then more available to improve efficiency by focusing on their role at hand and completing tasks. Thereby, a robust ERP system, like SAP, can be a powerful tool for employee morale, and for building confidence in a company’s success.
Having transparent business data readily available also helps with decision making at higher levels. Managers can make more informed choices for their employees, in turn lowering friction that may come from disconnection between roles.
5. Security and safety
Sensitive information can be at risk when data storage and exchange is not controlled by common standards. SAP ERP improves security by consolidating procedures into one structure, which is easy to audit and evaluate.
By encoding processes, SAP also reduces many kinds of human error and mistakes, which in turn inevitably reduces liabilities and enhances security.
The plug-and-play nature of most ERP software makes it highly customizable, empowering the end-user to dictate the product’s structure and interfaces. SAP is no different. Modules may be added or removed as business needs evolve. Vendors offer deployments hosted on private or hybrid cloud, on-premises, as a service, and more.
All of these options and extendability make SAP ERP perfectly suited for transitioning any company to more agile, adaptable models.
7. Transparency and collaboration
A single common and integrated platform means employees spend less time learning to use disparate sets of tools. This lowers the barrier to entry for many kinds of internal and external communication, leading to a more collaborative environment.
SAP ERP removes “islands of information” and brings wider legitimacy to business processes. For example, SAP helps deliver reporting more easily and transparently across an organization, and does away with confusion borne from problems like unstandardized naming conventions.
SAP, ERP, and the cloud
The many advantages in ERP all align with the modern trends of cloud storage and computing. If the goal is to make business data accessible anywhere and in real time, a distributed system makes a lot of sense. And once a business is satisfied with how it runs internally, typically make it easier to advance with more sophisticated business intelligence.
SAP SE, like many vendors, has embraced changes in architectural paradigms and the evolving software landscape. Its products and services have grown from the era of mainframe computing, through the increasing popularity of client-server architectures, and now into the cloud.
SAP’s current platforms and software are already offered in the cloud. Moreso, SAP’s headlining future technologies are focused on entirely eliminating any need for on-premise IT or in-house resources.
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SAP ERP modules and how they work
SAP SE develops a variety of applications as part of its business network, as well as a rich software ecosystem within platform-level products such as SAP ERP.
A programmable run-time environment and server, SAP Netweaver, sits at the core of the architecture. It is SAP’s main platform, in which clients may adopt or build a wide variety of applications. Mature modules number in the dozens but can be broken down into broad categories including:
- Finance: The FI high-level module includes various accounting applications, such as general ledger accounting (FI-GL), accounts receivable (FI-AR), or travel management (FI-TV). The CO high-level module contains financial costing, management, and analytic modules, for example: for product costing (CO-PC), overhead orders and project accounting (CO-OM-OPA), or profitability analysis (CO-PA). Other finance modules include those for investment management (IM), public sector management (PSM), real estate management (RE), and strategic enterprise management (SEM).
- Logistics: Many well-integrated and supported logistics modules also exist, from warehouse management (WM), to sales and distribution (SD), to customer service (CS), to product lifecycle management (PLM). This category also includes quality and compliance modules such as those for environment, health and safety (EHS), and quality management (QA).
SAP HANA, an in-memory database platform launched in 2011, is the center of SAP SE’s future strategy and offerings. The intention is for this technology to replace SAP’s older platforms, including a complete re-factoring of their ERP systems and business suite optimized for HANA (S4/HANA), first deployed in 2015. The second version of HANA is a next-generation platform fully supported on several public cloud infrastructures.
SAP’s business network and supported applications, often added and integrated through acquisition, include:
- Concur Technologies, for expense management and business travel organization
- Success Factors, for cloud-based human resource management<
- Qualtrics, for experience research and management
- And many more, such as Ariba, BusinessObjects, CallidusCloyd, and Fieldglass
SAP Integrations: Connecting modern with legacy
SAP products clearly cover a lot of ground when it comes to the information needs of businesses, but an ERP is still just one part of most IT infrastructures. The vast number of different applications and use cases supported by SAP software make third-party integration a necessity. Beyond this, a general commitment to customization and extensibility must produce options for connecting and integrating external resources.
Talend appreciates the importance of this interplay between SAP and other enterprise data systems. Moreso, Talend Data Fabric offers various ways for users to move information between these systems, and provides useful integrations with SAP software to help your business manage its resources and plan for future growth.
For example, Business Application Programming Interfaces (BAPI) can be used to directly pull SAP business objects into the Talend repository, with calls accepting single, table, or structure input. Support also exists for SAP’s IDoc formats in the Talend SAP RFC server. Finally, many Talend components are available for generating Open SQL to query SAP tables.
If you’re ready to power up your business and jump into the world of SAP, try Talend Data Fabric today.