What Is SAP for Businesses?
Systems Applications and Products in Data Processing (SAP) is a company that produces computer software designed to help businesses implement enterprise resource planning (ERP). ERP is about managing a company's human, physical and financial resources. The target is data integration and process efficiency, providing for full visibility of product, project and even payment status in real time. With an ERP software solution such as SAP, data from all parts of a business enterprise, including sales, planning, purchasing, manufacturing, logistics and finance, is integrated into a common system. Rather than linking multiple databases that might use a variety of data formats, master data such as part numbers or customer names is entered once and shared across all business functions. Every department and geographic location can use one common system and one shared set of master data.
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ERP History
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ERP evolved from material requirements planning (MRP), introduced in the 1960s. MRP converts information from customer firm orders and sales forecasts to determine the quantity of materials needed. A bill of materials (BOM) identifies all components required, and calculations are performed to determine how much of everything, from raw material to final assemblies, will be needed to meet actual and forecasted customer demands. ERP is the next phase of evolution from MRP, bringing all business planning processes together into an end-to-end, integrated system that can follow a project from the first customer quote to customer payment on the final delivery.
SAP History
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SAP was founded in Germany in 1972 by five former employees of IBM. Their first project was financial accounting software. In the 1980s, SAP expanded into Denmark, Sweden, Italy and the United States, and its customers included 50 percent of Germany's largest industrial companies. As of 2010, SAP is used worldwide and its customer base includes companies such as General Motors, Lockheed Martin and Proctor & Gamble.
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Finance
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SAP ERP for finance helps companies manage cash flow and working capital, while also ensuring compliance to federal financial reporting requirements. The availability of data in one system also helps drive efficiencies and accelerate month-end closing processes.
Human Capital Management
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SAP ERP for human capital management helps companies forecast resource needs in direct relation to project planning. Management can identify and plan for competency needs to hire new employees or develop those already on staff. Administrative, financial and legal processes associated with human resources can also be managed through SAP.
Operations
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With SAP ERP for operations, a company can follow a project from the first customer quote to customer payment on the final delivery. This end-to-end business solution includes processes such as order receipt, shipping, receiving, invoicing and delivery. Additionally, companies can collaborate with their supply chain partners, communicating directly with customer, supplier and logistics systems.
Corporate Services
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SAP ERP for corporate services can help companies with aspects of their business that extend beyond a particular project, product or program. This software solution can be used for a range of items such as to manage company assets or coordinate travel requirements.
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References
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