What is ERP?
ERP is an abbreviation for Enterprise Resource Planning. As the name suggests ERP is all about resource planning whatever the resources may be: – material, manpower, or services.
ERP helps an organization, an enterprise, or a company to run its business effectively by planning its resources efficiently. ERP integrates various business functions to eliminate any duplicate entry, keep a record of all business functions that the users perform, and generates a report which helps any business or organization to make better decisions.
A company’s ERP system empowers its customers to run their business processes, including production, accounting, sales, human resources, and finance, in an integrated environment.
An ERP system also called an ERP suite, is made up of integrated business applications or modules that share a common database and talk to each other. Various modules in the ERP suite are responsible for the efficient management of various departments – right from manufacturing, finance, services, HR, supply chain, procurement, and others. It is often referred to as the ‘central nervous system’ of the organization.
With cloud technology prevailing, today’s ERP systems are delivered on the cloud and use the latest technologies such as machine learning and artificial intelligence (AI) to provide greater efficiency, intelligent automation, and instant insight across the day-to-day operations of the business. Day-to-day operations here means that each department truly needs it – sales need ERP to manage all customer orders, finance requires an ERP to quickly close the books, logistics depends on well-running ERP software to deliver the right services and products to customers on time, accounts department needs ERP to pay suppliers correctly and on time, management needs clear visibility into the company’s performance to make timely decisions, shareholders and banks require accurate financial records hence they rely heavily on ERP system for dependable data and analysis.
SAP, which stands for Systems, Applications & Products in Data Processing, is the most popular and leading vendor of Enterprise Resource Planning (ERP) software and related enterprise applications. The name stands for both, the company that developed it and also the administrative and online financial software.
SAP is a German software company whose software modules permit businesses to track business intelligence and client. Using SAP Software organizations and companies of all sizes run their businesses profitably, and smoothly, grow sustainably, and adapt continuously to changing needs.
SAP is a complete package of different modules that perform various organizational system tasks. The orderly integration of SAP guarantees easy and smooth information flow between different SAP components and helps with implementing legal controls and financial processes. SAP modules are divided into two, Functional SAP modules and Technical SAP modules
Functional SAP ERP Modules:
- Project System (SAP PS)
- Human Resource Management (SAP HRM)
- Production Planning (SAP PP)
- Sales and Distribution (SAP SD)
- Quality Management (SAP QM)
- Material Management (SAP MM)
- Financial Supply Chain Management (SAP FSCM)
- Financial Accounting and Controlling (SAP FICO)
- Plant Maintenance (SAP PM)
Technical SAP ERP Modules:
- SAP Security
- SAP Basis
- SAP Solution Manager
- Advanced Business Application Programming (SAP ABAP)
- High-Performance Analytic Appliance (SAP HANA)
- SAP NetWeaver
- Customer Relationship Management (SAP CRM)
- Information Systems Management (SAP IS)
- Exchange Infrastructure (SAP XI)
Benefits of ERP
SAP software brings together a single view of different business functions by centralizing data management which in turn helps companies in better management of various processes by providing employees of different departments easy access to real-time data across the enterprise.
The main reason businesses implement ERP systems is to reduce IT expenses, reduce labor costs and improve interactions between staff resulting in the overall improvement in internal processes and business performance.
Let’s have a look at some advantages of an ERP system:
1. Total Visibility – The biggest selling point of SAP is this feature, total visibility, which allows complete access to all important processes by making data easily available from every department to all involved people.
2. Improved Reporting and Planning – By implementing an ERP suite across departments results in a single, unified reporting system for every process which can generate real-time useful reports and analytics at any time across the organization.
3. Complete Customisation – Every business organization has different needs hence SAP offers customization of applications that can be implemented according to business needs.
4. Improved Efficiency – Implementing SAP properly can reduce and eliminate repetitive manual processes thus reducing the time and effort required by the workforce to do their daily activities. This results in reducing IT and training costs and the team members can focus on other revenue-affecting tasks.
5. Data Security and Quality – The heart of any ERP is its Data; hence data security is an important aspect to be looked at. Sharing data across various departments like sales, marketing, customer service, and business development leads to better coordination and enhances collaboration throughout the company but at the same time, widespread data access is controlled to who can see and edit data. In SAP intrinsic controls and permissions are there to ensure the security of data.
There are many benefits of implementing an ERP system but let’s discuss a few disadvantages also before taking a decision whether to opt for SAP software or not.
Some of the disadvantages include:
1. The cost of the ERP Software – In the long term there’s no doubt that implementing any ERP software will be very profitable for an organization but initially it’s a big investment as the upfront cost of the software is very high hence cost is a big factor to be considered in making the transition from traditional method to SAP implementation.
2. The cost of implementation and maintenance – While the cost of software is a major investment but along with it the implementation cost of SAP software is also quite expensive hence the businesses have to consider and take into account the cost of manpower and time required for a successful deployment.
3. The customization processes – Customisation is the best feature of SAP but it can quickly get out of hand as third-party applications do not integrate well with SAP and there are a lot of complex integration processes hence it consumes a lot of time, expertise, effort, and time.
4. The complexity. SAP software solutions have numerous features, but that also makes them complex and difficult to use. At times lack of specialized skills required by SAP developers also slow down project delivery and also if the implementation is not planned properly can sweep off a company.
Now as we have discussed all aspects of SAP, the advantages, and the disadvantages let’s discuss the future of SAP
Future of SAP
Above we have seen the advantages and disadvantages of SAP, they are like two sides of the coin and go hand in hand but generally, the advantages outweigh the disadvantages and over the years it has been observed that organizations and business which implements SAP have seen a tremendous boost in productivity, business functions have streamlined and become flawless which has led to smooth business operations and multi-fold profits and growth.
SAP is a pioneer and global leader in ERP solutions; therefore, it will aggressively continue its development and growth in the future, and here at Softgen Infotech we are looking to support this growth by providing the best talent for businesses that use SAP technology by providing SAP training in BTM, Bangalore.
With digitalization, the amount of data to be handled has increased manifolds and thus the demand for professionals have increased who can manage the resource of the enterprise such as client resource management, sales, customer service, purchases, data of employees, and many more. Hence, having SAP training would always be beneficial when applying for a job.
Implementing SAP in an organization is a complex process and requires SAP Training and technical knowledge to achieve the benefits. SAP training helps one to gain expertise in software and different SAP modules.