SAP ERP
Content
SAP ERP is part of the applications in the SAP Business Suite (and SAP Business All-In-One
software)
Development[edit]
SAP ERP was built based on the former SAP R/3 software. SAP R/3 through version 4.6c
consisted of various applications on top of SAP Basis, SAP's set of middleware programs and
tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the
SAP Web Application Server. Extension sets were used to deliver new features and keep the
core as stable as possible. The Web Application Server contained all the capabilities of SAP
Basis.
As a result of marketing changes and changes in the industry, new versions of SAP have been
released. The first edition of mySAP ERP was launched in 2003 and bundled previously
separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM)
and extension sets. The SAP Web Application Server was wrapped into NetWeaver, which was
also introduced in 2003.
A complete architecture change took place with the introduction of mySAP ERP edition in
2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC).
The SAP Business Warehouse, SAP Strategic Enterprise Management and Internet Transaction
Server were also merged into SAP ECC, allowing users to run them under one instance.
Architectural changes were also made to support an enterprise service architecture to
transition customers to a services-oriented architecture. SAP HANA which is a combination of
In-memory software and hardware can improve data processing at extremely high speeds.
Implementation[edit]
SAP ERP consists of several modules, including utilities for marketing and sales, field service,
product design and development, production and inventory control, human resources, finance
and accounting. SAP ERP collects and combines data from the separate modules to provide the
company or organization with enterprise resource planning.
An article in the IEEE Transaction on Engineering Management journal reports an industrial
case in which senior management successfully dealt with a troubled SAP R/3 implementation
in an international fast moving consumer goods (FMCG) company during 2001 and 2002.[3]
Deployment and maintenance costs[edit]
Effectively implemented SAP ERP systems can have cost benefits[citation needed]. Integration
is the key in this process. "Generally, a company's level of data integration is highest when the
company uses one vendor to supply all of its modules." An out-of-box software package has
some level of integration but it depends on the expertise of the company to install the system
and how the package allows the users to integrate the different modules.[4]
It is estimated that "for a Fortune 500 company, software, hardware, and consulting costs can
easily exceed $100 million (around $50 million to $500 million). Large companies can also
spend $50 million to $100 million on upgrades. Full implementation of all modules can take
years," which also adds to the end price. Midsized companies (fewer than 1,000 employees)
are more likely to spend around $10 million to $20 million at most, and small companies are
not likely to have the need for a fully integrated SAP ERP system unless they have the
likelihood of becoming midsized and then the same data applies as would a midsized
company.[4] Independent studies have shown that deployment and maintenance costs of a
SAP solution can greatly vary depending on the organization. For example, some point out that
because of the rigid model imposed by SAP tools, a lot of customization code to adapt to the
business process may have to be developed and maintained.[5] Some others pointed out that
a return on investment could only be obtained when there was both a sufficient number of
users and sufficient frequency of use.[6][7] Deploying SAP itself can also involve a lot of time
and resources.[8]
SAP Basis[edit]
After extensive developments in SAP, it is now divided into two subgroups stating Basis into
one and Security into other (previously Basis consultants used to work on both basis as well as
Security issues)
ERP advantages and disadvantages[edit]
AdvantageAllows easier global integration (barriers of currency exchange rates, language, and
culture can be bridged automatically)
Updates only need to be done once to be implemented company-wide
Provides real-time information, reducing the possibility of redundancy errors
May create a more efficient work environment for employees[4]
Vendors have past knowledge and expertise on how to best build and implement a system
User interface is completely customizable allowing end users to dictate the operational
structure of the product
DisadvantagesLocked 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 well and customization
can be expensive
Return on Investment may take too long to be profitable
Implementations have a risk of project failure[4]
software)
Development[edit]
SAP ERP was built based on the former SAP R/3 software. SAP R/3 through version 4.6c
consisted of various applications on top of SAP Basis, SAP's set of middleware programs and
tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the
SAP Web Application Server. Extension sets were used to deliver new features and keep the
core as stable as possible. The Web Application Server contained all the capabilities of SAP
Basis.
As a result of marketing changes and changes in the industry, new versions of SAP have been
released. The first edition of mySAP ERP was launched in 2003 and bundled previously
separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM)
and extension sets. The SAP Web Application Server was wrapped into NetWeaver, which was
also introduced in 2003.
A complete architecture change took place with the introduction of mySAP ERP edition in
2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC).
The SAP Business Warehouse, SAP Strategic Enterprise Management and Internet Transaction
Server were also merged into SAP ECC, allowing users to run them under one instance.
Architectural changes were also made to support an enterprise service architecture to
transition customers to a services-oriented architecture. SAP HANA which is a combination of
In-memory software and hardware can improve data processing at extremely high speeds.
Implementation[edit]
SAP ERP consists of several modules, including utilities for marketing and sales, field service,
product design and development, production and inventory control, human resources, finance
and accounting. SAP ERP collects and combines data from the separate modules to provide the
company or organization with enterprise resource planning.
An article in the IEEE Transaction on Engineering Management journal reports an industrial
case in which senior management successfully dealt with a troubled SAP R/3 implementation
in an international fast moving consumer goods (FMCG) company during 2001 and 2002.[3]
Deployment and maintenance costs[edit]
Effectively implemented SAP ERP systems can have cost benefits[citation needed]. Integration
is the key in this process. "Generally, a company's level of data integration is highest when the
company uses one vendor to supply all of its modules." An out-of-box software package has
some level of integration but it depends on the expertise of the company to install the system
and how the package allows the users to integrate the different modules.[4]
It is estimated that "for a Fortune 500 company, software, hardware, and consulting costs can
easily exceed $100 million (around $50 million to $500 million). Large companies can also
spend $50 million to $100 million on upgrades. Full implementation of all modules can take
years," which also adds to the end price. Midsized companies (fewer than 1,000 employees)
are more likely to spend around $10 million to $20 million at most, and small companies are
not likely to have the need for a fully integrated SAP ERP system unless they have the
likelihood of becoming midsized and then the same data applies as would a midsized
company.[4] Independent studies have shown that deployment and maintenance costs of a
SAP solution can greatly vary depending on the organization. For example, some point out that
because of the rigid model imposed by SAP tools, a lot of customization code to adapt to the
business process may have to be developed and maintained.[5] Some others pointed out that
a return on investment could only be obtained when there was both a sufficient number of
users and sufficient frequency of use.[6][7] Deploying SAP itself can also involve a lot of time
and resources.[8]
SAP Basis[edit]
After extensive developments in SAP, it is now divided into two subgroups stating Basis into
one and Security into other (previously Basis consultants used to work on both basis as well as
Security issues)
ERP advantages and disadvantages[edit]
AdvantageAllows easier global integration (barriers of currency exchange rates, language, and
culture can be bridged automatically)
Updates only need to be done once to be implemented company-wide
Provides real-time information, reducing the possibility of redundancy errors
May create a more efficient work environment for employees[4]
Vendors have past knowledge and expertise on how to best build and implement a system
User interface is completely customizable allowing end users to dictate the operational
structure of the product
DisadvantagesLocked 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 well and customization
can be expensive
Return on Investment may take too long to be profitable
Implementations have a risk of project failure[4]
