SAP ERP is an

enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of business management software—typically a sui ...

software developed by the German company

SAP SE Sap is a fluid transported in xylem cells (vessel elements or tracheids) or phloem sieve tube elements of a plant. These cells transport water and nutrients throughout the plant. Sap is distinct from latex, resin, or cell sap; it is a ...

. SAP ERP incorporates the key

business function A business process, business method or business function is a collection of related, structured activities or tasks by people or equipment in which a specific sequence produces a service or product (serves a particular business goal) for a parti ...

s of an organization. The latest version of SAP ERP (V.6.0) was made available in 2006. The most recent SAP enhancement package 8 for SAP ERP 6.0 was released in 2016. It is now considered legacy technology, having been superseded by SAP S/4HANA.

Functionality

Business Processes included in SAP ERP are: * Operations (

Sales Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the goods or services, completes a sale in r ...

Distribution Distribution may refer to: Mathematics * Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations *Probability distribution, the probability of a particular value or value range of a vari ...

, Materials Management, Production Planning,

Logistics Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...

Execution, and

Quality Management Quality management ensures that an organization, product or service consistently functions well. It has four main components: quality planning, quality assurance, quality control and quality improvement. Quality management is focused not on ...

), * Financials (

Financial Accounting Financial accounting is the field of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. Stockholders, ...

Management Accounting In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions. Definition One simple definition of management accounting is th ...

, Financial

Supply Chain Management In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and st ...

), * Human Capital Management (

Training Training is teaching, or developing in oneself or others, any skills and knowledge or fitness that relate to specific useful competencies. Training has specific goals of improving one's capability, capacity, productivity and performance. I ...

Payroll A payroll is the list of employees of some company that is entitled to receive payments as well as other work benefits and the amounts that each should receive. Along with the amounts that each employee should receive for time worked or tasks pe ...

, e-Recruiting) and *

Corporate Services Corporate services or business services are activities which combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) ...

(

Travel Management Corporate travel management is the function of managing a company’s strategic approach to travel (travel policy), the negotiations with all vendors, day-to-day operation of the corporate travel program, traveler safety and security, credit-car ...

Environment, Health and Safety Environment (E), health (H) and safety (S), EHS is an acronym for the set that studies and implements the practical aspects of protecting the environment and maintaining health and safety at occupation. In simple terms it is what organizations must ...

, and Real-Estate Management).

Development

An ERP was built based on the former SAP R/3 software. SAP R/3, which was officially launched on 6 July 1992, consisted of various applications on top of SAP Basis, SAP's set of

middleware Middleware is a type of computer software that provides services to software applications beyond those available from the operating system. It can be described as "software glue". Middleware makes it easier for software developers to implement ...

programs and tools. All applications were built on top of the

SAP Web Application Server SAP NetWeaver Application Server or SAP Web Application Server is a component of SAP NetWeaver which works as a web application server for SAP products. All ABAP application servers including the message server represent the application layer of t ...

. 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. An architecture change took place with the introduction of mySAP ERP 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. The SAP Web Application Server was wrapped into SAP

NetWeaver SAP NetWeaver is a software stack for many of SAP SE's applications. The SAP NetWeaver Application Server, sometimes referred to as WebAS, is the runtime environment for the SAP applications and all of the mySAP Business Suite runs on SAP WebA ...

, which was introduced in 2003. Architectural changes were also made to support an enterprise service architecture to transition customers to a

Service-oriented architecture In software engineering, service-oriented architecture (SOA) is an architectural style that focuses on discrete services instead of a monolithic design. By consequence, it is also applied in the field of software design where services are provid ...

. The latest version, SAP ERP 6.0, was released in 2006. SAP ERP 6.0 has since then been updated through SAP enhancement packs, the most recent: SAP enhancement package 8 for SAP ERP 6.0 was released in 2016.

Implementation

SAP ERP consists of several modules, including Financial Accounting (FI), Controlling (CO), Asset Accounting (AA), Sales & Distribution (SD),SAP Customer Relationship Management (SAP CRM), Material Management (MM), Production Planning (PP), Quality Management (QM), Project System (PS), Plant Maintenance (PM), Human Resources (HR), Warehouse Management (WM). Traditionally an implementation is split into: * Phase 1 – Project Preparation * Phase 2 – Business Blueprint * Phase 3 – Realization * Phase 4 – Final Preparation * Phase 5 – Go Live Support

Deployment and maintenance costs

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. Independent studies have shown that deployment and maintenance costs of a SAP solution can 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. Some others pointed out that a

return on investment Return on investment (ROI) or return on costs (ROC) is a ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably ...

could only be obtained when there was both a sufficient number of users and sufficient frequency of use.

SAP Transport Management System

SAP Transport Management System (STMS) is a tool within SAP ERP systems to manage software updates, termed '' transports'', on one or more connected SAP systems. The tool can be accessed from transaction code STMS. This should not be confused with SAP Transportation Management, a stand-alone module for facilitating logistics and supply chain management in the transportation of goods and materials.

SAP Enhancement Packages for SAP ERP 6.0 (SAP EhPs)

The latest version (SAP ERP 6.0) was made available in 2006. Since then, additional functionality for SAP ERP 6.0 has been delivered through SAP Enhancement Packages (EhP). These Enhancement Packages allow SAP ERP customers to manage and deploy new software functionality. Enhancement Packages are optional; customers choose which new capabilities to implement. SAP EhPs do not require a classic system upgrade. The installation process of Enhancement Packages consists of two different steps: * Technical installation of an Enhancement Package * Activation of new functions The technical installation of business functions does not change the system behavior. The installation of new functionalities is decoupled from its activation and companies can choose which business functions they want to activate. This means that even after installing a new business function, there is no change to existing functionality before activation. Activating a business function for one process will have no effect on users working with other functionalities. EhP8 served as a foundation to transition to SAP's new business suite: SAP S/4HANA.

References

Sources

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Institute for Defense Analyses The Institute for Defense Analyses (IDA) is an American non-profit corporation that administers three federally funded research and development centers (FFRDCs) – the Systems and Analyses Center (SAC), the Science and Technology Policy Institute ...

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Institute of Electrical and Electronics Engineers The Institute of Electrical and Electronics Engineers (IEEE) is a 501(c)(3) professional association for electronic engineering and electrical engineering (and associated disciplines) with its corporate office in New York City and its operation ...

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Communications of the ACM ''Communications of the ACM'' is the monthly journal of the Association for Computing Machinery (ACM). It was established in 1958, with Saul Rosen as its first managing editor. It is sent to all ACM members. Articles are intended for readers wi ...

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IEEE The Institute of Electrical and Electronics Engineers (IEEE) is a 501(c)(3) professional association for electronic engineering and electrical engineering (and associated disciplines) with its corporate office in New York City and its operati ...

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Association for Computing Machinery The Association for Computing Machinery (ACM) is a US-based international learned society for computing. It was founded in 1947 and is the world's largest scientific and educational computing society. The ACM is a non-profit professional member ...

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Interfaces Interface or interfacing may refer to: Academic journals * ''Interface'' (journal), by the Electrochemical Society * '' Interface, Journal of Applied Linguistics'', now merged with ''ITL International Journal of Applied Linguistics'' * '' Int ...

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External links

* {{Authority control ERP software Computer-related introductions in 1972 Cloud applications Cloud platforms Automation software Accounting software Project management software Enterprise software Business software Human resource management software Customer relationship management software ERP