What we will be learning
- How the SAP Journey Began
- Link to What is ERP
- Why SAP Works for Most Fortune 500s
- Which Industries use SAP
- What are the Benefits of SAP
- How do I learn SAP
Let’s Start with How the SAP Journey Began
In 1972, the SAP Journey began by five ex IBM employees (interesting that they are not the topic consulting firm for implementing SAP according to Gartner). Fun fact, SAP started and is still headquartered in Germany. This is why I would assume if I spoke native German maybe some of the naming of SAP products/functions make more sense in German. SAP had the idea of taking all the manual office tasks and automating them with software & integrating finance/procurement/sales/manufacturing etc. In the early days they sat hand in hand with companies identifying the business process and building a software to manage it. The emergence of this software is what is now known as ERP (enterprise resource planning)
What exactly is ERP?
ERP (Enterprise Resource Planning) is a software solution that SAP provides that can integrate end to end business processes. As the rise of business software occurred there were often a software for sales, a separate software for procurement, a separate software for finance/accounting and these software’s would need to be integrated to get the most efficiency. ERP software bundled all these business processes into a single highly integrated software that can do all major business processes. The key ERP business processes are:
- Finance (controlling/accounting)
- Procurement (purchasing/sourcing)
- Sales & Distribution (sales capture, order processing, delivery)
- Manufacturing (Process or Discreet)
- Inventory/Warehouse Management (Managing different inventory, warehouse processes)
- Human Resources (most popularized usage after acquiring Success Factors)
- Master Data Management
As a metaphor I would consider Facebook the ERP of social media. What do I mean by this? Let’s boil this down slightly but imagine Twitter is only for providing status updates, Instagram is only for sharing pictures, whatsapp is to only send text messages. Let’s assume in this example they aren’t all connected and owned by the same company for the most part in the background. Each software has it’s own purpose but Facebook is just the big jumble where you can post a status, post a picture, use the messenger feature, use an events page. It’s basically a one stop shop, that’s the same with SAP ERP it encompasses all the business features needed in a single stable software.
Why Does SAP Work for Most Major Fortune 500s
SAP software is in itself mainly a shell that has built in ability to run all the major business processes but is highly customizable. SAP has what is called configuration, in it’s simplest form imagine entering a data field and you can control which drop down values are available. However, the complexity of customizing is much more far reaching, you can customize for example whether or not a sales order needs specific information. There are thousands of standard settings available that make it nearly impossible to implement SAP without a team of consulting experts each with knowledge of a different area of the software. A key concept in SAP is when the standard settings provided fall short of the business need you can have developers write their own code and insert it into the SAP software. Developments fall within a familiar categorization called RICEFWs: (Reports, Interfaces, Conversions, Enhancements, Forms, Workflows). Due to the highly customizable nature with a solid backend & very stable database SAP has become the go to ERP for large major fortune 500s. SAP has a global presence and over the years has built out their software to be able to manage the complexities of most major countries where companies do business.
Which Industries use SAP?
SAP is SAP started out in the manufacturing/consumer packaged goods industry. However, as the customer base grew they branched out into oil & gas, utilities, fashion, retail etc. Each industry solution has an add on of features that support that specific industry. For the most part SAP tries to keep the baseline product as similar as it can while supporting specific industries. For the most part SAP presence can be seen in all industries with the exception of financial services & communications, media & technology. These two industries might use SAP for some areas of their business such as procurement but it is rare for these industries to use SAP end to end.
What are the Benefits of using SAP?
SAP has really become the bedrock of most major fortune 500 companies. The unique ability of SAP to manage real time inventory, provide accurate delivery dates, reduce supply shortages by predicting upcoming sales activity and automating the purchasing/manufacturing process has made SAP a must have for the modern business. It also provides a wealth of business data that modern analytics tools can harvest to give a pulse on the business. The native integration with finance is a key factor as it reduces time to close the books since transactions occurring in inventory/purchasing/sales all automatically perform financial transactions in the system. SAP brands itself as the digital core of a business.
How Do I Learn SAP?
Now I know what you’re thinking, this is so cool! How do I learn SAP? Well to start with I would recommend some overview courses to give you an idea of all the different business processes and data that work together in SAP. It’s also essential to learn the organization structure of SAP and how it maps to a company. I will start going over all of this in future blogs but keep in mind as an SAP professional until you’re the level of solution architect you usually stick with one of the SAP Modules and learn:
- FICO (Financial Accounting & Controlling) Module
- MM (Materials Management) Module (Also known as Procure to Pay)
- SD (Sales & Distribution) Module (Also known as Order to Cash)
- PP (Production Planning) Module (Also known as Plan to Manufacture)
- QM (Quality Management) Module
- PM (Plant Maintenance) Module
- MDM/MDG (Master Data Management/Governance) Module