Enterprise resource planning (ERP) systems have already cemented their place in the realm of organizational infrastructure. Featuring multiple tools and centralized data flows, ERP has served as the technological cornerstone of several companies, big and small.
There are numerous types of ERP systems available in the market, such as PeopleSoft, HP Microsoft, and Oracle. One of the most dominating ERP software, however, is SAP. The SAP ERP system is famous for comprising 80% of the systems used by Fortune 500 companies, including Pfizer and Johnson & Johnson.
To elaborate further, read on and learn more about what makes SAP stand out against competitors in the ERP market.
SAP stands for Systems, Applications & Products in Data Processing. It is developed by a Germany-based company that bears the same name. SAP’s most prominent feature lies in its service-oriented architecture, making it accessible to all business sizes and types. Finding an SAP partner is also easy to accomplish with accredited vendors stationed across more than a hundred countries. In 2020, it ranked 22nd in the Forbes list of the world’s most valuable brands.
As mentioned earlier, SAP’s most prominent feature lies in its ability to cater to all types of businesses, no matter how small or big they are. Bear in mind that this is not common in the ERP market, where systems usually target a specific business size.
The main feature behind this ability lies in SAP’s modularity and customizable system type. It comprises different modules, which are further divided into technical modules and functional modules. As such, clients can mix and match to find the most suitable module combination for their company’s needs.
Growing pains is a common problem for a lot of developing companies. As transactions increase and business operations transform, it is critical to have a strong technological backbone that can adjust to these changes.
SAP’s three-tier, client-server architecture gives the system a lot of leeway in terms of flexibility. Since SAP is modular and customizable, clients have the option to acquire new features and upgrade their current systems to address new business demands.
ERP systems are notoriously complex and for a good reason. These systems are massive, processing and storing countless amounts of data at the same time.
However, having more functionality does not immediately translate to better results. Contrarily, having too many functions—which may not be necessary to the business—only lengthens the learning curve for employees. After all, the more complex the system, the longer it will take for company personnel to get used to it.
One impressive aspect of SAP is that, despite its complex features, it remains simple and user-friendly. By conducting an in-depth case study beforehand and eliminating unnecessary functions, clients will be able to shorten the learning curve and still enjoy all of the SAP features the company needs.
Another formidable aspect SAP boasts is its out-of-the-box functionality. The implementation process is straightforward, and unlike many other ERP systems, it does not need as much customization.
Additionally, clients can also connect the SAP ERP system to third-party services. For example, SAP has cloud solutions that enable companies to use complimentary services like PayPal and Google. In this manner, performing tasks across the enterprise—whether locally or internationally—becomes possible and more efficient.
As stated before, ERP systems are often designed to cater to select industries. For example, TradeGecko, an Australia-based company, is more suitable for retail with its inventory and order management features. On the other hand, Ellucian ERP caters to the educational sector specifically.
It is uncommon to find an ERP system that crosses industry limits, which makes SAP all the more impressive. For companies venturing outside of their industries and expanding product lines, it is particularly useful to have an SAP system. With its wide selection of customizable features, clients can scale up their ERP and minimize the adjustment period for the rest of the company.
Several companies may hesitate to use SAP due to its price tag. In the ERP market, it is the second most expensive ERP system behind Oracle. However, SAP also provides the fastest financial payback in the industry.
Compare the numbers. According to the research conducted by the Panorama Consulting Group, the average time it takes for companies to see a return on investment is 2.7 years. Meanwhile, the average time it takes for SAP to show these benefits is only nine months.
The numbers speak for themselves. It becomes quite clear why SAP is one of the leading ERP systems worldwide, used by industry giants and smaller businesses alike.
While SAP boasts a nearly complete out-of-the-box functionality, it is still quite complex to install alone. Hence, the guidance of ERP consultants and reliable system providers are crucial for a successful implementation. Make sure to conduct research first on verified SAP partners like ANSI, and find the SAP system configuration that best suits your company.