This series of articles provides a comprehensive look at the popular Enterprise Resource Planning (ERP) system known as SAP. It is suitable for individuals who are unfamiliar with SAP, or those who have some experience with it, and is particularly directed at consultants, developers, business analysts, and end users.
In this article, we will explore several introductory areas of SAP. We will focus on an historical overview to explain the evolution of SAP from its original form to what it is today. We will also discuss the concept of real time processing and the architecture of the SAP R/3 Business Suite. Then, we will explore the SAP Netweaver Technology platform, followed by a discussion of where SAP fits in the present ERP software market and where it is headed in the future.
History of SAP
SAP began in Germany in the early 1970’s as a project undertaken by five former IBM employees. They founded an enterprise, naming it System Analysis and Program Development, which they later changed to Systems, Applications, and Products in Data Processing. Now, SAP is the most recognized ERP product in the world.
Here are the three essential elements formed the fundamental basis of the SAP concept:
- Real-Time Processing – Actions immediately effect enterprise-wide processes.
- Standard Software – Market product standard version of SAP software customizable during implementation.
- Integration – Data integration for all existing business processes of an enterprise.
Among the earliest versions of SAP was SAP R/1, which was a financial accounting system. The R in R/1 referred to real-time. In the early 1980’s, SAP R/2 appeared as a mainframe business application. Later, SAP R/3 emerged in 1992 as the client server version of the software. The most recent version of SAP is SAP ECC, which stands for ERP Central Component, Version 6.
Real Time Processing
The first element mentioned above, real time processing, was one of SAP’s earliest and most attractive features. It refers to facilitating immediate business transactions and data processing. Transactions are completed efficiently, and clients experience quicker order turnarounds and the ability to bring products to the market faster.
Real time processing lets a business order, ship, and make determinations in an efficient and expedient manner. It makes data accessible to everyone in a company that needs it, and provides it immediately when it is needed.
The advantages of real time processing are manifold: inaccuracies are reduced, and obsolete information is quickly eliminated. Data processing times are also shorter, and all forms of data across the various platforms are kept up-to-date for access by those users and departments who need them. It allows for easier processing of high volumes of information for immediate access.
SAP R/3 Structure
The 3 in SAP R/3 can be explained as follows:
This breakdown can be further explained in terms of the three layers of the SAP client server concept:
- Presentation layer
- Application layer
- Database layer
This particular layer refers to an application running on an end user’s PC. This layer can also be referred to as “the front end.” It is used within a networked environment, and displays information screens to the users. The users can then interact with the SAP system itself. It represents the client portion of the client-server relationship.
The application layer refers simply to that layer where applications are processed for display to the end user on the presentation layer.
The SAP system uses the data that is stored on the database layer. Data at this level is created and edited based on requests received from the application layer, then displayed on the GUI at the presentation layer. This layer is really the nuts and bolts of the SAP system.
This three-layered client-server architecture has a number of advantage:
SAP NetWeaver Platform
In the progression from SAP R/3 to ERP 6, an important innovation emerged with the introduction of the NetWeaver Platform. This platform is an integration application that provides functionality for accessing SAP systems via an Internet browser rather than having to install the SAP GUI on a desktop. It forms the technological basis for four primary areas described below.
Utilizing the NetWeaver Platform, users can collaborate and share information via a portal, which facilitates collaboration in an on-demand environment, taking place anytime and anywhere the portal is accessed. At the people integration level, users utilize multi-channel access.
This level of integration provides business intelligence and knowledge management capabilities in order to provide integrated work processes.
The process level of integration operates as a data integrity broker. It pulls from master data sources and document workflow.
The technical basis across all SAP applications is the application integration. Customers are able to develop their own applications using the JAVA and ABAP programming languages.
New technologies have opened up new channels of communication between customers and enterprises, and SAP was not left behind: NetWeaver allowed it to evolve and maximize the usage of the web. It now allows users to access the SAP system from different channels, including the portal, mobile phones, tablets, and other remote access points.
It provides the technical basis for an SAP system and required applications, allowing business processes to be mapped across several business areas. This creates seamless integration across all participating and authorized departments in a particular business.
The Future of SAP
The current focus for SAP is expansion into new markets, particularly small and mid-sized businesses. They have increased acquisitions over the past several years, obtaining companies such as Business Objects and Success Factors, in order to leverage new technologies such as cloud computing and mobile capabilities. At present, SAP has around 47,000 employees worldwide and is the most recognized global enterprise software company on the market. SAP is now used by over 41,200 companies across 25 industries in 120 different countries.