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ERP
Developer(s) Written in Type Website SAP AG ABAP/4 ERP SAP ERP

The SAP ERP application is an integrated enterprise resource planning (ERP) software manufactured by SAP AG that targets business software requirements of midsize and large organizations in all industries and sectors. It allows for open communication within and between all company functions.
Contents
[hide]

1 Overview 2 Development 3 Implementation 4 Deployment and maintenance costs

4.1 Security

4.1.1 Communications

5 ERP advantages and disadvantages

6 See also 7 References 8 External links

[edit]Overview SAP AG was founded by five former IBM engineers in Mannheim, Baden-Wrttemberg (Dietmar Hopp, Klaus Tschira, HansWerner Hector, Hasso Plattner, and Claus Wellenreuther) asSystemanalyse und Programmentwicklung (in English, "System Analysis and Program Development") in June 1972. It uses the concept of modules (individual programs that can be purchased, installed, and run separately, but that all extract data from the common database). [1] SAP AG, the company that provides the enterprise resource planning solution has upgraded the package and launched it as SAP ERP Central Component (ECC) 6.0 in 2005. The purpose of positioning it as ECC is to enable SAP to build and develop an environment of other products that can function upon the foundation of the central component. SAP's ERP solution includes several modules that support key functional areas, including: SAP Enhancement Packages (Currently available: EHP 5) Logistics Consulting SAP Business One SAP Business Suite - Foundation Topics Home (End-User Experience Monitoring) SAP Supplier Relationship Management (SRM) SAP Enterprise Performance Management (EPM) SAP Customer Relationship Management (CRM)

SAP Product Lifecycle Management (PLM) SAP ERP 6.0 Upgrade (ERP Upgrade) SAP Test Data Migration Server SAP Human Capital Management (HCM) SAP Supply Chain Management (SCM) SAP Financials (ERP Financials) SAP Cost controlling and Profitability Analysis (ERP COPA) SAP Mobile (Mobile) SAP Supply Chain Management (ERP SCM)

SAP Sosio Atatchrment Program(EPM)

[edit]Development SAP R/3 through version 4.6c consisted of various applications on top of SAP Basis, SAP's set of middleware programs and tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the SAP Web Application Server. Extension sets were used to deliver new features and keep the core as stable as possible. The Web Application Server contained all the capabilities of SAP Basis. As a result of marketing changes and changes in the industry, other versions of SAP have been released that address these changes. The first edition of mySAP ERP was launched in 2003 and bundled previously separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM) and extension sets. The SAP Web Application Server was wrapped intoNetWeaver, which was also introduced in 2003. A complete architecture change took place with the introduction of mySAP ERP edition 2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC). The SAP Business

Warehouse, SAP Strategic Enterprise Management and Internet Transaction Server were also merged into SAP ECC, allowing users to run them under one instance. Architectural changes were also made to support an enterprise services architecture to transition customers to a services-oriented architecture. SAP HANA which is a combination of Inmemory software and hardware can improve data processing at extremely high speeds. [edit]Implementation SAP ERP consists of several modules including: utilities for marketing and sales, field service, product design and development, production and inventory control, human resources, finance and accounting. SAP ERP collects and combines data from the separate modules to provide the company or organization with enterprise resource planning. Although there can be major benefits for customers of SAP ERP, the implementation and training costs are expensive. Many companies experience problems when implementing SAP ERP software, such as: failing to specify their operation objectives, absence of a strong commitment or positive approach to change, failing to deal with organizational differences, failing to plan the change to SAP ERP properly, inadequate testing. All these factors can mean the difference between having a successful implementation of SAP ERP or an unsuccessful one. If SAP ERP is implemented correctly an enterprise can go from its old calculations system to a fully integrated software package. Potential benefits include: efficient business process, inventory reduction, and lead time reduction. IEEE scholar journal reports an industrial case in which the senior management successfully dealt with a troubled SAP R/3 implementation

in an international fast moving consumer goods (FMCG) company during 2001 and 2002.[2] [edit]Deployment

and maintenance costs

SAP ERP systems effectively implemented can have cost benefits. Integration is the key in this process. "Generally, a company's level of data integration is highest when the company uses one vendor to supply all of its modules." An ourtrtertertert-of-box software package has some level of integration but it depends on the expertise of the company to install the system and how the package allows the users to integrate the different modules.[1] It is estimated that "for a Fortune 500 company, software, hardware, and consulting costs can easily exceed $100 million (around $50 million to $500 million). Large companies can also spend $50 million to $100 million on upgrades. Full implementation of all modules can take years," which also adds to the end price. Midsized companies (fewer than 1,000 employees) are more likely to spend around $10 million to $20 million at most, and small companies are not likely to have the need for a fully integrated SAP ERP system unless they have the likelihood of becoming midsized and then the same data applies as would a midsized company. [1] Independent studies have shown that deployment and maintenance costs of a SAP solution can greatly vary depending on the organization. For example, some point out that because of the rigid model imposed by SAP tools, a lot of customization code to adapt to the business process may have to be developed and maintained.[3] Some others pointed out that a return on investment could only be obtained when there was both a sufficient number of users and sufficient frequency of use.[4] [5] Deploying SAP itself can also involve a lot of time and resources.[6] [edit]Security [edit]Communications

SAP systems - including client systems - communicate with each other using SAP-specific protocols (e.g., RFC and DIAG) and the http and https protocols. These systems do not have encrypted communications out of the box; however, SAP does provide a free toolkit for server-toserver communications[7]. With the recent acquisition of relevant parts of SECUDE[8], SAP can now provide cryptography libraries with SAP ERP for Secure Network Communications and Secure Socket Layer. [edit]ERP

advantages and disadvantages

Advantages Allows easier global integration (barriers of currency exchange rates, language, and culture can be bridged automatically) Updates only need to be done once to be implemented companywide Provides real-time information, reducing the possibility of redundancy errors

May create a more efficient work environment for employees[1]

Vendors have past knowledge and expertise on how to best build and implement a system Disadvantages Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high Inflexibility - vendor packages may not fit a company's business model well and customization can be expensive

Return on Investment may take too long to be profitable Implementations have a risk of project failure[1]

[edit]See

also

SAP R/3 SAP NetWeaver SOA List of ERP software packages SAPgui Secure Network Communications Secure Socket Layer Profitability Analysis

[edit]References
1.

^ a b c d e Monk, Ellen F.; Wagner, Brej J. (2009). Concepts in enterprise resource planning (3rd ed.). Boston: Thomson Course Technology. pp. 2334. ISBN 978-1-4239-0179-2. Lui, Kim Man (January 2008). "Rescuing Troubled Software Projects by Team Transformation: A Case Study With an ERP Project". IEEE Transaction on Engineering Management 55 (1): 171 184.doi:10.1109/TEM.2007.912933. Everett, Cath (2008-02-13). "Companies warned over custom SAP costs". UK: zdnet. Retrieved 2009-03-08. "Around 90 percent of European SAP customers could save six- or seven-figure sums each year by avoiding the creation of bespoke code on top of the ERP platform, an IT consultant has claimed" Vance, Ashlee (2003-03-31). "SAP costs too much customers ROI challenged". UK: The Register. Retrieved 2009-03-08.
Achieved a Positive ROI". Nucleus Research. 2003-03-31. Retrieved

2. ^

3. ^

4. ^

5. ^ "Nucleus Research finds 57 percent of SAP Reference Customers have not

2009-03-08. "Customers will see benefits after lengthy implementations, but many deployments anchored down by excessive consulting costs"
6. ^ "How much does SAP costs me?".

UK: web-geeks. Retrieved 2009-03-

08.

7. ^ SAP Cryptographic Library 8. ^ SAP to Acquire Software Security Products and Assets from SECUDE

- Gargeya, VB 2005, Success and failure factors of adopting SAP in ERP system implementation, Business Process Management Journal, Vol.11, No.5, pp501516, Retrieved 21/04/2010. - In White Paper Review, Industry Week OCT 2009, ERP Best Practices: The SaaS Difference, Plex Systems, Retrieved 21/04/2010. - Malhorta, A & Temponi, C 2010, Critical decisions for ERP integration: Small business issues, International Journal of Information Management, Vol. 30, Issue No.1, Pages 2837, 21/04/2010, Science Direct.

SAP ERP
BUSINESS BENEFITS
SAP ERP delivers a comprehensive set of integrated, cross-functional business processes. With SAP ERP, you can gain the following benefits:
Improve alignment of strategies and operations Run your enterprise in accordance with strategy and plans, accessing the right information in real time to identify concerns early. Pursue opportunities proactively. Achieve corporate objectives by aligning workforce and organizational objectives. Find the best people and leverage their talent in the right job at the right time.

Improve productivity and insight Leverage self-services and analytics across your organization. Improve operational efficiency and productivity within and beyond your enterprise.

Reduce costs through increased flexibility

Use enterprise services architecture to improve process standardization, efficiency, and adaptability.

Extend transactions, information, and collaboration functions to a broad business community.

Support changing industry requirements Take advantage of the SAP NetWeaver platform's latest open, Web-based technology to integrate your end-to-end processes seamlessly.

Reduce risk Solve complex business challenges today with SAP, your trusted partner for longterm growth, with 30 years of experience working with organizations of all sizes in more countries than any other vendor. Join SAP's world-class partner network, uniquely qualified to support the best business practices in more than 25 industries.

Improve financial management and corporate governance Gain deep visibility into your organization with financial and management accounting functionality combined with business analytics. Increase profitability, improve financial control, and manage risk.

Optimize IT spending Integrate and optimize business processes. Eliminate high integration costs and the need to purchase third-party software. Deploy other SAP Business Suite applications incrementally to improve cash flow and reduce costly borrowing.

Gain higher ROI faster Install SAP ERP using rapid-implementation techniques that cost less than half what traditional approaches cost. Leverage preset defaults and prepackaged versions available for specific industries.

Retain top performers Retain your top performers through clearly defined career and development plans.

Link employees' performance to compensation programs such as variable pay plans and long-term incentives.

Provide immediate access to enterprise information Give employees new ways to access the enterprise information required for their daily activities.