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

the raw material is out of stock. Now . Thus. 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. but this time around he needs the product. material as well inventory cost goes up.the shop floor department suddenly realize they are short of workers They approach the HR . The Customer approaches the sales team for a product. material and human resource cost. Thus LABOR Cost Increases. This is just a few of many a problems with decentralized systems.• In a company with Decentralized System of Data Management – Data is maintained locally at the individual departments.but as per the database of the production planning team. on an urgent basis The Sales Team do not have real-time information access to the products inventory. Well the Solution lies in Centralized Systems ie. suppose the product is out of stock and the Sales Team approaches the Production Planning team to manufacture the product for future use. The production planning department fail to update the finance department on the materials they have purchased. So . . 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. Once the raw material is available . they go ahead and buy the raw material. Production Planning Team checks the availability of the raw materials required. 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 . So they approach the Inventory department to check the availability of the product. A particular raw material required to manufacture the product is available in the inventory . These are some major drawbacks for which we need a solution. who in turn hire temporary employees at higher than market rates. This process takes time and customer chooses another vendor Loss of Revenue and Customer Dissatisfaction. Thus Data Maintenance Cost (in this case Raw Material) goes up. Raw Material Information is separately stored by Production Planning as well as Inventory Department. ERP.

2) Departments have access to information or data of other Departments. manufacturing is required . SAP is a Centralized Enterprise Management System also know as Enterprise Resource Planning.Thus labor cost goes down Vendors can directly submit their invoices to the Central Enterprise System which can be accessed by the Finance Department. .with Centralized System of Information and Data Management 1) Data is maintained at a central location and is shared with various Departments. Improves Customer Service Hence . the Sales Team update the Centralized Database . In case of shortage of workforce HR team starts recruitment process with considerable lead time to hire a suitable candidate at market price . discontinuity and redundancy in data Provides information across departments in real time. Production Planning Department is auto updated by the Centralized Database for requirements. Thus payments are made on time and possible legal actions are avoided • • • • • • • • The key benefits of the centralized system are It Eliminates the duplication.• In a company . Provides control over various business processes Increases productivity. effective human resources management. better inventory management .reduced material cost . promotes quality . a Centralized Enterprise Management System is required. reduced overheads boosts profits Better Customer Interaction . 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. • • • • • • • 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 . increased throughput.

including transactional and configuration data. When an application server is stopped. and function keys. The "R" was for Realtime data processing" SAP R/3 is a client/server based application. The application layer houses all the business-specific logic. To start it. geared towards the creation of simple. or ABAP/4 is a fourth generation language (4GL). interfaces with 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. or the user interface (or simply. Server Three . or client. The interface accepts input from the user in the form of keystrokes. utilizing a 3-tiered model. and sends these requests to the application server to be processed. 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. 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.exe. It is usually installed on a user’s workstation. In which all 3 layers [Presentation + Application +Database] are installed in three separate systems/server. whether reports or complete transactional systems within the SAP framework.Application. This window is commonly known as the SAPGUI. A presentation layer. it particular it is client-server software. (server One -Presentation. mouse-clicks.Database) What is SAP R3? We know that SAP R/3 is software. they all shut down together. the user double-clicks on an icon on the desktop or chooses a menu path. Presentation Server The presentation server is actually a program named sapgui. When started. When an application server is started. The application server sends the results back to the SAPGUI which then formats the output for display to the user. the presentation server displays the R/3 menus within a window. and the database layer records and stores all the information about the system. . the interface). yet powerful programs. ABAP. SAP R/3 functionality is structured using its own proprietary language called ABAP (Advanced Business Application Programming). server Two . This means that the groups/layers that make up a R/3 System are designed to run simultaneously across several separate computer systems. these executables all start at the same time.SAP R/3: is 3-tier architecture.

These requests are passed on to the RDBMS (Relation Database Management System). but an ABAP/4 program cannot execute there. . 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. or may be installed on its own computer. The application server in turn passes that information to your ABAP/4 program. and they only run there-the programs do not run on the presentation server. Discovering the Database Server The database server is a set of executables that accept database requests from the application server. and the RDBMS may run on that computer also. The RDBMS sends the data back to the database server. An ABAP/4 program can start an executable on the presentation server. There is usually a separate computer dedicated to house the database server. which then passes the information back to the application server.Each application server has a profile that specifies its characteristics when it starts up and while it is running. If your ABAP/4 program requests information from the database. the application server will format the request and send it to the database server. For example.

Client 001 can be customized to prepare it to move it into the production environment. A client is defined as a legally and organizationally independent unit within SAP R/3. . 000. SAP Clients Client 000 – Client 000 is a special client in SAP since it has client independent settings. parameters. Client 000 contains all standard configurations. 001 and 066. One important thing to remember is that during SAP R/3 implementation. For purposes of SAP R/3. Client 000 in SAP R/3 comes with a simple organizational structure. the first thing to be done is copy a standard client included in SAP R/3 package. a client can be company. training. Client 001 also includes a test company. SAP R/3 comes inbuilt with three standard clients viz. it does not behave like client 000. With the help of this. standard transactions. corporation or even a business unit. once client 001 is customized. etc that are normally used in the SAP R/3 business environment. One of the first things SAP asks for at the time of first logon is the client number. SAP users can start using SAP for creating tests. or even start using it for customization. It is a sort of test company.Clients in SAP R3 – Concept of Client in SAP R/3 One of the most basic concepts in SAP is that of “Client”. once SAP is installed. However. Let us see all the three different client’s in SAP R/3 in detail. Client 001 – Client 001 is a copy of client 000. Client 066 – Client 066 is used to perform “Early Watch” service for customer systems.

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