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SAP Full Form & Definition of SAP ERP Software

SAP Full Form & Definition of SAP ERP Software

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What does SAP Stand for

SAP stands for Systems Applications and Products in Data Processing (English) and in German SAP abbreviation system, Andwendungen, Produkte in der Datenverarbeitung (German).

What is SAP

SAP, by definition, is also an ERP (Enterprise Resource Planning) software. Founded by Hopp, Hector, Plattner, Wellenreuther, and Tschira in the year 1972, the SAP system features numerous fully integrated modules. As you continue reading, you will learn to define SAP and understand what SAP software is used for.

Key Points of SAP Software

  • SAP aspects are well-designed to take care of almost all types of business management problems.
  • SAP has found its way to the Forbes 2018 list about “The World’s Largest Public Companie.” SAP ranked as the 12th-largest technology-enabled company and presented revenue of $27.4 billion IN 2017.
  • SAP has its headquarters in Walldorf, Germany.
  • The 25 plus industry-specific SAP business software solutions available in the marketplace have positively impacted over 75,000,000 customers across 120 countries (as of 2010).
  • According to a corporate fact sheet released by 2018 by the Company itself, SAP had 404,000 customers spread across 180 countries. More than 80% of these customers are small-and-medium-sized businesses (SMBs).
  • It boasts of 140,000 installations worldwide.
  • SAP serves to be at the top of the list in the ERP market.
  • The company provides hybrid, on-premises, and cloud deployment models.
  • SAP cloud computing options are the core area of interest and form the Company’s future business strategies.
  • It firmly rubs shoulders with SAP competitors like Microsoft Dynamics, Oracle, etc.
  • The initial release of the SAP accounting software was known as R/2 on a Mainframe.
  • Later on, R/3 was released by SAP as Client-Server Software; the R stands for real-time in R/3.
  • The latest release by SAP is SAP Hana.
  • The new dimension products of SAP are based on Netweaver.
  • According to estimates, 77% of total global business transactions are influenced by the solutions offered by SAP systems.

Why SAP?

SAP system provides integrated software solutions for processing all functionalities of business organisation with a view of delivering unified solutions. New and innovative standards related to business information management applications and solutions have been provided by the SAP R/3 enterprise application suite that is applicable for open-ended client/server systems.

Initially, SAP was designed to help clients interact and use a common corporate database that supported a wide range of applications. Over time, SAP products and applications have been compacted, and they are also being used by corporate giants like IBM and Microsoft for running their business operations.

SAP makes usage of ABAP (Advanced Business Application Programming) that is categorized as a 4th Generation Programming Language. The Company is responsible for the development of SAP ABAP, which is a high-level programming language with syntax similar to COBOL. SAP ABAP presents the features of several other programming languages of the likes of Visual Basic, Power Builder, and C.

Read here: What is SAP Experience?

Definition of SAP ERP System

The SAP ERP Central Component (SAP ECC) or SAP ERP System, as it is commonly called, contains a set of technical and functional modules. These modules help big and small businesses manage their business processes effectively via a unified system. For small-sized organisations, SAP provides its powerful Business One ERP platform. ECC serves as the on-premises SAP version that is extremely helpful for large and medium-sized companies. The main modules of SAP ERP are further divisible as subsets of its technical and functional modules.

The Architecture of SAP R/3

There are three layers of the SAP R/3 Architecture.

  • Presentation in which the user works with the Graphical user interface via the application layer.
  • The application layer allows the user to interact between the presentation and database layer.
  • The database layer, which is known as the central database meant for storing all data of the ERP SAP Systems.

Various phases of SAP Software Implementation project:

  • Phase 1- Project preparation
  • Phase 2- A Business blueprint
  • Phase 3- Realization
  • Phase 4- Final preparation
  • Phase 5- Go Live and support

Who uses SAP Software?


  • For small and medium enterprises, SAP has released ByDesign & BusinessOne.

History and Growth of SAP

  1. SAP, the company was founded in Germany in 1972 by five ex-IBM engineers Wellenreuther, Hopp, Hector, Plattner, and Tschira.
  2. Initial Release was called R/2 on a Mainframe.
  3. SAP Later released R/3 as Client-Server Software, the R in R/3 stands for Real-time.
  4. New Dimension Products based on Netweaver.
  5. SAP Latest release is SAP HANA.

SAP Versions

1. SAP R/1: This was the very first time that the SAP system was launched in 1972. The one-tier architecture offered real-time tools and features for data processing.
2. SAP R/2: Introduced in 1979, this second version of SAP was a dialogue-based, database-oriented business solution.
3. SAP R/3: This version of SAP was designed to be compatible with open client/server systems. The new standards laid down by SAP R/3 provides the best solutions concerning business information management. It is more successful because:

  • The information provided to it remains secure.
  • SAP R/3 functions in multi-currency.
  • The best business practices are put to use by SAP R/3.
  • SAP R/3 is well-accepted by most types of enterprises.
  • Real-time processing tasks are very efficient in terms of server/client applications.
  • The SAP R/3 application serves to be multilingual.
  • The SAP R/3 system utilises the client/server model and is compatible with various platforms like Windows 2000.
  • The latest version of R/3 features comprehensive Internet-enabled capabilities.

4. SAP ERP Central Component (ECC) 6.0
5. SAP HANA: In 2011, SAP HANA was launched by the Company.

  • SAP HANA serves as an effective in-memory database platform.
  • HANA is a significant development project for the Company and forms an essential part of its future strategy.
  • It is expected that HANA will take over the position held by traditional SAP databases in context to its business applications.
  • SAP has positioned HANA as a beneficial deployment option for the Business Suite.
  • S/4HANA was released in the year 2015 as a rewrite of the Business Suite that has been optimized for the SAP HANA platform.

Advantages of SAP

1) Online Integrated Graphics

One of the crucial benefits of SAP is Online Integrated Graphics; if the user wants to save his time and effort as well as wants to make your information significant, you must have to use Online Integrated Graphics, this will further help you to generate full-colour 2D or 3D graphics that belong to your data.

In any case, if you want to alter data, you would be able to see it frequently, which will further affect the graphics you have chosen, and next, you would be able to work on your mouse to update the graphics manually.

2) Functionality

The next advantage is functionality. It means the R/3 system will provide you with a software solution that will further shield all your processes that are related to commercial purposes and the transactions generally stirring within a company or a cluster of companies.

3) Linking Companies

Another advantage is integration which will help you in linking all the cluster of companies using data and functions with the help of the R/3 system and the related work processes

4) User-Friendly

One of the most practical advantages is that the SAP R/3 system is user-friendly; the related R/3 system consists of a Graphical User Interface for all the application areas.

5) Individual Solutions

System-controlled modifying events will offer you to generate solutions from a wide variety of prepared application variants to gratify single supplies. Another significant advantage is that the SAP R/3 system is mainly a flexible structure, whether in a departmental group or on the granary or factory floor, alteration is the only surface of your business that will not differ. Flexibility must be unique, and the R/3 System’s supple edifice and deep integration help make that calmer.

6) Enterprise-Wide Integration

SAP’s enterprise-wide R/3 System solutions encounter the requirements of continuously varying, recurrently developing businesses. The R/3 System’s application mechanisms are fully combined. Transaction-related process chains activate the next activity as desirable from engineering to resources management, to production planning, to sales and distribution. The R/3 System’s full combination twitches your initiative composed, endorsing data access, suppleness, and efficiency. No other product or suite of products delivers the R/3 System’s functional links amongst procedures that increase the power of each person’s work.

7) Realtime Information

The R/3 System’s capacity to “drill down” to whatever level of feature you need is mythological. More than any other product, the R/3 System offers up-to-the-minute, realtime information wherever and whenever you need it.

8) Mission-Critical Business Processes

You will come to know that SAP has something around 20 years of experience in the well behaved sophisticated application software for the backbone and business process. You will be glad to know that 9 out of the top ten fortune 500 companies use SAP software. Mainly SAP established a maximum of the R/3 System’s functionality in nearby cooperation with these customers. Therefore, it has combined the best business practices of the world’s most successful companies into the R/3 System.

9) Best of Breed

Users need standard software as well as normal business procedures and supervision on how to implement them successfully. With the R/3 System, you get the “best of breed” for all current business processes. You do not need to compromise on flexibility. If you need or want to fine-tune or tailor your R/3 system, the capability is there.

10) Enterprise-wide three-tiered Architecture

The R/3 scheme leftovers the solitary enterprise-wide, three-tiered architecture. The R/3 System’s three-tiered client/server architecture divides the system into areas dedicated to the database, application functionality, and desktop production. This structure encourages the greatest flexibility, the flexibility of submission constituent choice, and the proficiency to change and add to the scheme as your association augments. The development of the Internet, encompassing the World-Wide World Wide Web, pledges to make dramatic changes in communications between businesses and customers. SAP is employed with some partners to develop enhanced Internet additions for the R/3 System.

11) Concurrent Engineering

Concurrent engineering cuts time-to-market by stacking up enterprise methods whenever purposes can take location concurrently rather than consecutively. The R/3 System’s flexibility and integration help you pattern the realtime workflow application connections needed for concurrent engineering.

12) Lean Implementation

The R/3 system encourages thin implementation through its modular structure. By selecting key portions of the R/3 scheme for the first-time implementation, and minimising customisation, new users bring the full power of the R/3 scheme to address their business issues with large hasten, at a reasonable cost. One time running, the R/3 scheme makes it very simple to add more functional parts. Tools on various scheme grades permit you to fine-tune all R/3 System purposeful modules.

13) Desktop Integration

Desktop integration in the R/3 system means that whenever you want data moved into a desktop PC application, it is a mouse-click away. Download or export a file to your PC’s hard drive and then open it in your favourite spreadsheet or word processor. No awkward or failure-prone communications between hardware or to hinder hinders your productivity.

14) Online Integrated Graphics

Online integrated graphics in the R/3 system save you time and effort while making your data more significant. From most locations in the R/3 scheme, you can instantly conceive full-colour 2-D or 3-D graphics from your facts and figures. If you change any facts and figures, you can immediately see it affect the graphics you have chosen. You can also use your mouse to adjust graphics manually.

Other Basic Advantages of SAP

  • Duplication of data is absent in SAP Technology.
  • The presence of standardised business processes makes SAP convenient, quick, and easy to use.
  • The SAP software has made scheduling, planning, management, tracking of different processes much more comfortable than before.
  • SAP allows for integration with e-commerce capabilities.
  • SAP is cost-effective and reduces the administrative charges of client organisations.
  • The tasks related to monitoring projects and flexible reporting have been automated via SAP.
  • SAP provides consistency across different divisions of business operations/ processes.

List of SAP Module and Products

SAP Transforms S/4HANA HCM Support

The SAP provides different cloud adoption programs for bringing services and the latest tools under a single umbrella to aid the cause of data integration.

  • SAP professionals are now making safe cloud HR migrations with SAP changing S/4HANA HCM support to minimise data loss and compliance risks.
  • S/4HANA serves as the Company’s in-memory version related to the SAP ERP Business Suite platform.
  • S/4HANA runs on SAP and is designed to reduce complexity and eventually replace SAP ECC.


SAP C/4 HANA offers cloud-based customer experiences. This SAP e-commerce platform was introduced recently in June 2018. SAP C/4 HANA comprises of 5 component applications:

  • SAP Marketing Cloud
  • SAP Customer Cloud
  • SAP Sales Cloud
  • SAP Service Cloud
  • SAP Customer Data Cloud.

SAP Leonardo

It is a well-integrated system of services and software encompassing next-generation technologies like Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), big data, 3-D printing (additive manufacturing), advanced analytics, blockchain, etc. – all under the umbrella of the SAP Cloud Platform.

SAP Fiori

SAP Fiori consists of a well-integrated line of SAP apps. Among these apps, the first 25 were introduced in 2013. Fiori addresses the limited concerns of SAP user experiences and UI complexities in the best possible manner. Different Fiori apps are known to run exclusively on the S/4HANA platform. SAP Fiori and S/4HANA platforms are expected to intertwine more closely as they evolve in the future.

Functional Modules of SAP

Some of the most popular SAP functional modules are given below and define SAP programs in the best possible way:

  • SAP PP (Production Planning)
  • SAP SD (Sales and Distribution)
  • SAP FICO (Financial Accounting and Controlling)
  • SAP HR (Human Resources)
  • SAP MM (Material Management)
  • SAP WM (Warehouse Management)
  • SAP QM (Quality Management)
  • SAP LIS (Logistics Information System)
  • SAP EHS (Environment Health and Safety)
  • SAP PLM (Product Life Cycle Management)
  • SAP PS (Project Systems)
  • SAP Human Capital Management (HCM)

SAP Cross-application Components

The cross-application components of SAP ERP are capable of being implemented along with all main modules; these include:

  • Document Management System
  • Classification
  • Product Lifecycle Management

SAP Technical Modules

Examples of SAP knowledge in terms of technology modules are best observed in:

  • SAP Netweaver
  • SAP XI (Exchange Infrastructure)
  • SAP ABAP (Advanced Business Applications Programming)
  • SAP BW (Business Warehousing)
  • SAP IS (Information Systems) Management
  • Sap Business Intelligence (BI)

SAP Industry-specific Applications

The various SAP industry-specific programs and applications support business processes that are unique to specific industries; these include:

  • SAP for Utilities
  • SAP for Oil and Gas
  • SAP for Insurance
  • SAP Healthcare

SAP Business Suites

The SAP Business Suite is a collection of business applications that effectively manage the integration of business, processes, and industry-focused functionality. The Business Suite of SAP possesses SAP ERP as its foundation. It also includes modules to support customer relationship management, supply chain management, product lifecycle management, and supplier relationship management. SAP customers can run its Business Suite with the help of the SAP HANA platform. The SAP provides different applications featuring the tools/ functions of SAP ERP to meet customer requirements; these are as follows:

  • SAP SCM (Supply Chain Management)
  • SAP SRM (Supplier Relationship Management)
  • SAP BI (Business Intelligence)
  • SAP APO (Advanced Planning and Optimization)
  • SAP CRM (Customer Relationship Management)
  • SAP SEM (Strategic Enterprise Management Software)
  • SAP PLM (Product Life Cycle Management)


Now that you have a better idea of SAP meaning, its versions, features, and functionality, you may want to assess the SAP program or application that is best suited for your business needs. In case you have further inputs or queries regarding SAP system definition or the definition of SAP modules/submodules, do write to us in the comments section below – we will wait to hear from you.


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