Systems, Applications and Products in Data Processing
Founded in 1972 in Walldorf, Germany by five former IBM systems engineers, SAP is the leading global provider of client/server business application solutions for all types of industries.
SAP originally had two major products: R/2 (released in 1979) for the mainframe environment and R/3 (released in 1992) for open client/server systems. Both systems allowed customers to install the core system and one or more of the functional components, or purchase the software as a complete package. SAP's current core product is now known as SAP ERP (for Enterprise Resource Planning) or just simply SAP (for both the company and its product). SAP's main strength lies in real-time integration, linking a company's business processes and applications. The software supports immediate responses to business change on a departmental, divisional or global scale.
Since the introduction of web interfaces and a scalable, Internet-ready architecture in 1996, SAP has worked with companies making the transition to the Internet business model. The ability of SAP to deliver customer-centric, open, personalized and collaborative inter-enterprise solutions led to the foundation of the SAP Business Suite. This includes SAP ERP as well as other applications such as CRM (Customer Relationship Management).
SAP has been a public company since 1988 and is listed on several stock exchanges including the Frankfurt stock exchange - where it is listed on the DAX, the German index of blue-chip companies - and the New York Stock Exchange under the symbol SAP.
Statistics at a Glance
In addition to its main headquarters in Walldorf, SAP has development labs in Palo Alto, California; Bangalore, India; São Leopoldo, Brazil and several other locations around the world.
Customers include the British Broadcasting Corporation (BBC), Coca-Cola, ConAgra Foods, Deutsche Telekom, eBay, Hallmark, Kraft Foods, Lenovo, Medtronic, Pacific Drilling, Royal Bank of Scotland, Siemens, Swarovski, Texas Instruments, Unilever, Vodafone Group and many others.
SAP ERP has three main application categories: Logistics, Accounting and Human Resources. Additionally, there are central functions such Workflow. The categories are further broken down into functional components or modules, as the following chart indicates.
SAP Functional Components
SD Sales & Distribution
MM Materials Management
PP Production Planning
QM Quality Management
PM Plant Maintenance
HR Human Resources
FI Financial Accounting
AM Asset Management
PS Project System
IS Industry Solutions
Logistics is the process of planning, implementing and controlling the efficient and cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption, for the purpose of conforming to customer requirements.
The logistics process is often known as supply chain management (SCM) - ensuring the right goods reach the right place at the right time.
Materials Management models the business processes involved in Purchasing, Inventory Management, and Invoice Verification. Purchasing deals with the procurement of materials and services. Inventory Management encompasses both aspects of managing materials on a quantity basis as well as on a value basis. Invoice Verification posts vendor invoices and passes on payment data to Financial Accounting.