what is "SAP"

SAP stands for Systems Applications and Products in Data Processing. Designed and developed by 5 IBM engineers during the 1970s as a standards based software alternative to custom built ERP software, SAP has come a long way. SAP has been in the forefront of ERP software ever since.

SAP develops ERP products to be used by companies to manage their enterprise. This includes managing their day to day operations, logistics, finances, month end, quarter end and yearly activities, reporting, HR etc. Although there are a couple of other ERP vendors who do the same, the key differentiator for SAP is the way in which SAP integrates all these operations and makes for a seamless system that is both easy to use and at the same time sophisticated enough to include all kinds of complex activities that are needed for any kind of enterprise. Examples of some of these activities could, be running Material resource planning, recruiting and managing an employee’s lifecycle, disbursing payrolls, recording all financial transactions and drawing balance sheets and P/L statements of the company etc. Now imagine a single system that takes care of all these diverse activities and still keep them well integrated.

SAP was initially designed to be run on the mainframe and was called that release was called R/2 (Release 2). SAP quickly caught on to the client server model with a later release called R/3 and this was the most popular version of SAP. After R/3, later versions of their core software were launched called Enterprise Central Component (ECC).

The automation needs of an enterprise are endless. SAP soon realized that corporations needed business intelligence to mine data from their daily operational data and extract meaningful trends that could enable further business opportunities. SAP BW was born and morphed into BI after buying out Business Objects (BO).

After the hugely successful R/3, SAP created more and more niche software like Customer Relationship Management (CRM), SRM, XI (now called Process Integration or PI) and once again living up to the standards of SAP by maintaining tight integration with their core ECC software.

Through the process of developing these software components, SAP has slowly moved from standard client server architecture to a completely web-based architecture where every transaction can be run from just a browser. These new dimension products developed on the web standards based framework (NetWeaver) are all under new umbrella called mySAP.
What’s in it for me ?

SAP is all-powerful software and everything, but you might ask “How does it help me?” Roughly more than 70% of all Fortune 100 and more than 50% of all Fortune 500 companies use SAP as their core ERP software.

What this gives you is tremendous job opportunities with these companies. These companies have enormous appetite for qualified IT consultants in the field of SAP. These jobs are not just for computer engineers or the likes of them. There are multiple tiers of consultants working in SAP for these companies. SAP is one of the very few software’s where there is a clear distinction between functional and technical areas of expertise. For companies, this means that there is a clear and logical division of the type of work performed and hence leads to increased productivity and efficient implementation and maintenance lifecycles. For individuals like you, this means more jobs and more specialization required for the same.

We can classify them as

Functional Consultants: These are folks who have tremendous industry experience in their respective area (Like HR, Finance, Logistics modules like Sales, Procurement etc ) . An example would be a hard-core sales manager with extensive Sales domain experience, working as an SAP SD functional consultant. Another example would be a CPA working to configure an SAP FICO system in a company. The strength of these consultants would like in their deep understanding of the core business processes that are key to the enterprise. A CPA would understand the General Ledger, Balance Sheet or a reconciliation account more than somebody with just pure technical knowledge.

Technical Consultants: These are folks who have very good engineering or other academic backgrounds and have a very strong understanding of programming languages. SAP’s own 4th General Programming language is called ABAP. ( Advanced Business Application Programming). In the mySAP suite of products, programming can be done in Java as well. Also there are specialized skills like configuring and customizing SAP’s own middleware XI(Exchange Infrastructure), MDM ( Master Data Management) etc.

System Administration: This is managing the SAP software itself (The Netweaver Core ). These folks are called SAP Basis consultants and they come from some kind of System Administration background (*NIX, Windows or Database Administrators). The job includes, installation, upgrades, patching and general maintenance of the SAP system. They also take care of maintaining the entire system landscape.




1990s saw a tremendous change in SAP. Early 1990 is when SAP’s R/3 captured the ERP market. The core ERP product comprised of the following modules.

FICO – Finance & Controlling
SD – Sales & Distribution
MM – Materials Management
PP – Production Planning
SM – Service Management
QM – Quality Management
WM – Warehouse Management
TM – Transportation Management
HR – Human Resources
PS – Project Systems

In the later part of 1990s, SAP diversified into many niche products expanding beyond just its core ERP product space and venturing into new dimension products. Some of these products are mentioned here. They were grouped under the term SAP Business Suite.

CRM – Customer Relationship Management
SRM – Supplier Relationship Management
APO – Advanced Planner and Optimizer
PLM – Product Lifecycle Management
SCM – Supply Chain Management e-Procurement
FSCM – Financial Supply Chain Management
EHS – Environment Health and Safety
SEM – Strategic Enterprise Management
BI – Business Intelligence
PI – Process Integration
EWM – Extended Warehouse Management
and counting….

Parallelly, SAP has been working on Industry specific solutions (SAP – IS ) which are written with collaboration with specific industries. For example, SAP implements at Nike and has gathered tremendous information on how the footwear and apparel industry works. Naturally SAP has come up with a version of ERP called SAP – IS AFS (Apparel & Footwear). SAP also has many other Industry solutions.