What is SAP?

Definition of SAP ERP Software

SAP stands for Systems Applications and Products in Data Processing. It was Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira. SAP by definition is also name of the ERP (Enterprise Resource Planing) software as well the name of the company. SAP system comprises of a number of fully integrated modules, which covers virtually every aspect of the business management. SAP is #1 in the ERP market. As of 2010, SAP has more than 140,000 installations worldwide, over 25 industry-specific business solutions and more than 75,000 customers in 120 countries Other Competitive products in market are Oracle, Microsoft Dynamics etc.

What is an SAP- ERP? Why it is Required?

The very basic question is why Enterprise Resource Planning also called ERP is required ?To answer this , lets examine this typical business scenario Sales Team approaches the Inventory department to check for availability of the product. In case the product is out of stock ,the sales team approaches the Production Planning Department to manufacture the product.The Production planning Team checks with inventory department for availability of raw material If raw material is not available with inventory , the Production Planning team buys the raw material from the Vendors then Production Planning forwards the raw materials to the Shop Floor Execution for actual production. Once ready , the Shop Floor Team forwards the goods to the Sales Team , who in turn deliver it to the client. The Sales Team updates the Finance with revenue generated by sale of product Production planning Team update the finance with payments to be made to different vendors for raw materials.All departments approach the HR for any Human Resource related issue. That is a typical business process of in a manufacturing company Some Key Inferences one could derive from the scenario would be. A typical Enterprise has many Departments or Business Units. These Departments or Business Units continuously communicate and exchange date with each other. The success of any organization lies in effective communication, and data exchange, within these departments ,as well as associated Third Party such as Vendors, Outsourcers ,and Customers. Based on the manner in which communication and data exchanged is managed Enterprise systems can be broadly classified as 1) Decentralized System. 2) Centralized System which are also called as ERP. Lets look at Decentralized system first

In a company with Decentralized System of Data Management Data is maintained locally at the individual departments; Departments do not have access to information or data of other Departments

To identify problems arising due to decentralized Enterprise management system lets look at the same business process again. The Customer approaches the sales team for a product, but this time around he needs the product, on an urgent basis The Sales Team do not have real-time information access to the products inventory. So they approach the Inventory department to check the availability of the product. This process takes time and customer chooses another vendor Loss of Revenue and Customer Dissatisfaction. Now , suppose the product is out of stock and the Sales Team approaches the Production Planning team to manufacture the product for future use. Production Planning Team checks the availability of the raw materials required. Raw Material Information is separately stored by Production Planning as well as Inventory Department. Thus Data Maintenance Cost (in this case Raw Material) goes up. A particular raw material required to manufacture the product is available in the inventory ,but as per the database of the production planning team, the raw material is out of stock. So , they go ahead and buy the raw material. Thus, material as well inventory cost goes up. Once the raw material is available ,the shop floor department suddenly realize they are short of workers They approach the HR , who in turn hire temporary employees at higher than market rates. Thus LABOR Cost Increases. The production planning department fail to update the finance department on the materials they have purchased. The finance department defaults the payment deadline set by the vendor causing the company loss of its repute and even inventing a possible legal action. This is just a few of many a problems with decentralized systems. Some Major problems with the decentralized system are Numerous disparate information systems are developed individually over time which are difficult to maintain Integrating the data is time and money consuming Inconsistencies and duplication of data Lack of timely information leads to customer dissatisfaction , loss of revenue and repute High Inventory , material and human resource cost. These are some major drawbacks for which we need a solution. Well the Solution lies in Centralized Systems ie. ERP.

In a company ,with Centralized System of Information and Data Management 1) Data is maintained at a central location and is shared with various Departments. 2) Departments have access to information or data of other Departments.

Lets look at the same business process again to understand how a Centralized Enterprise System helps overcoming problems posed by a Decentralized Enterprise System In this Case , all departments update a Central Information System When Customer approaches the sales team to buy a product on an urgent basis The Sales Team has real-time information access to the products in inventory which is updated by the Inventory Department in the Centralized System Sales Team respond on time leading to Increased Revenue and Customer Delight In case , manufacturing is required , the Sales Team update the Centralized Database . Production Planning Department is auto updated by the Centralized Database for requirements. Production Planning Team checks the availability of the raw materials required via Central Database which is updated by the Inventory Department

Thus Data Duplication is avoided and accurate data is made available The Shop Floor Team update their Man Power Status regularly in the Central Database which can be accessed by the HR department. In case of shortage of workforce HR team starts recruitment process with considerable lead time to hire a suitable candidate at market price .Thus labor cost goes down Vendors can directly submit their invoices to the Central Enterprise System which can be accessed by the Finance Department. Thus payments are made on time and possible legal actions are avoided

The key benefits of the centralized system are It Eliminates the duplication, discontinuity and redundancy in data Provides information across departments in real time. Provides control over various business processes Increases productivity, better inventory management , promotes quality ,reduced material cost , effective human resources management, reduced overheads boosts profits Better Customer Interaction , increased throughput. Improves Customer Service Hence , a Centralized Enterprise Management System is required. SAP is a Centralized Enterprise Management System also know as Enterprise Resource Planning.

SAP R/3: is 3-tier architecture. In which all 3 layers [Presentation + Application +Database] are installed in three separate systems/server. (server One -Presentation, server Two - Application, Server Three - Database)
What is SAP R3? We know that SAP R/3 is software, it particular it is client-server software. This means that the groups/layers that make up a R/3 System are designed to run simultaneously across several separate computer systems. The "R" was for Realtime data processing" SAP R/3 is a client/server based application, utilizing a 3-tiered model. A presentation layer, or client, interfaces with the user. The application layer houses all the business-specific logic, and the database layer records and stores all the information about the system, including transactional and configuration data. SAP R/3 functionality is structured using its own proprietary language called ABAP (Advanced Business Application Programming). ABAP, or ABAP/4 is a fourth generation language (4GL), geared towards the creation of simple, yet powerful programs. R/3 also offers a complete development environment where developers can either modify existing SAP code to modify existing functionality or develop their own functions, whether reports or complete transactional systems within the SAP framework.

Presentation Server

The presentation server is actually a program named sapgui.exe. It is usually installed on a users workstation. To start it, the user double-clicks on an icon on the desktop or chooses a menu path. When started, the presentation server displays the R/3 menus within a window. This window is commonly known as the SAPGUI, or the user interface (or simply, the interface). The interface accepts input from the user in the form of keystrokes, mouse-clicks, and function keys, and sends these requests to the application server to be processed. The application server sends the results back to the SAPGUI which then formats the output for display to the user.
Application Server

An application server is a set of executables that collectively interpret the ABAP/4 programs and manage the input and output for them. When an application server is started, these executables all start at the same time. When an application server is stopped, they all shut down together. The number of processes that start up when you bring up the application server is defined in a single configuration file called the application server profile.

Each application server has a profile that specifies its characteristics when it starts up and while it is running. For example, an application sever profile specifies: Number Amount of of processes memory each and process their may types use

Length of time a user is inactive before being automatically logged off The application server exists to interpret ABAP/4 programs, and they only run there-the programs do not run on the presentation server. An ABAP/4 program can start an executable on the presentation server, but an ABAP/4 program cannot execute there. If your ABAP/4 program requests information from the database, the application server will format the request and send it to the database server.
Discovering the Database Server

The database server is a set of executables that accept database requests from the application server. These requests are passed on to the RDBMS (Relation Database Management System). The RDBMS sends the data back to the database server, which then passes the information back to the application server. The application server in turn passes that information to your ABAP/4 program. There is usually a separate computer dedicated to house the database server, and the RDBMS may run on that computer also, or may be installed on its own computer.

Clients in SAP R3 Concept of Client in SAP R/3

One of the most basic concepts in SAP is that of Client. A client is defined as a legally and organizationally independent unit within SAP R/3. For purposes of SAP R/3, a client can be company, corporation or even a business unit. One of the first things SAP asks for at the time of first logon is the client number. SAP R/3 comes inbuilt with three standard clients viz. 000, 001 and 066. Let us see all the three different clients in SAP R/3 in detail.

SAP Clients

Client 000 Client 000 is a special client in SAP since it has client independent settings. Client 000 in SAP R/3 comes with a simple organizational structure. It is a sort of test company. Client 000 contains all standard configurations, parameters, standard transactions, etc that are normally used in the SAP R/3 business environment.

Client 001 Client 001 is a copy of client 000. Client 001 also includes a test company. Client 001 can be customized to prepare it to move it into the production environment. However, once client 001 is customized, it does not behave like client 000. Client 066 Client 066 is used to perform Early Watch service for customer systems. One important thing to remember is that during SAP R/3 implementation, once SAP is installed, the first thing to be done is copy a standard client included in SAP R/3 package. With the help of this, SAP users can start using SAP for creating tests, training, or even start using it for customization.