What is SAP Software?
When a customer visits a website to purchase something, for example, a watch or a sunglass, he/she would have some idea of the brand, the quality, the price and other features that he/she needs. Once the customer makes his/her choice, there comes this disheartening message “the product is out of stock”.
This is a real turn off for the customer!
Wouldn’t it be good if the customer shops for only those products that are readily available for sale. It could be frustrating to know that the product is not available. This situation can be prevented if the product inventory is updated by the concerned department. You would be wasting the customer’s time if he has to wait until check out time to know the product is not available.
Have a look at the typical business process for any company that sells things:
- There would be several business units and departments, for example, the sales team, the inventory unit, the manufacturing unit and so on within the company.
- There should be proper communication between these departments, with timely exchange of data
- There should be effective communication between other third-party vendors and departments.
This is where Enterprise Systems come in. And Enterprise Resource Planning!
What is SAP?
SAP is the most popular name in the ERP market. SAP is not the name of any software as such, but a company that deals with ERP systems. SAP is short for Systems, Applications & Products in Data Processing.
Here is the situation
A client visits a website to make a purchase. The product request goes out to the sales team, where they will do an inventory to check if the product is available. This request will go out to the inventory department.
If the product is not available, the request will go out to the manufacturing team at the production planning department to develop the product.
If the raw materials are not available, the production planning team will then set out to buy them, and deliver the same to the production and manufacturing team. Once the product is manufactured it would be sent to the customer for purchase , and the client would purchase it, and the payments would go out to the different teams involved in the making of the product. This is how it happens with any company. And the business process is pretty much the same.
This can be done successfully only when there is a constant stream of communication between the different departments. There are two different ways in which communication and data exchange are done between the departments.
- Centralised systems, also called ERP
- Decentralised systems
Centralised systems aka ERP
In the Centralised system, there will be prompt data exchange between the different departments involved in the sales. The sales team will have direct access to the product inventory.
The information and data management will be managed locally in decentralised systems. The exchange of information between the departments will not happen in real time, and so the product inventory information in one department will not be available to the sales team automatically.
So when the customer visits the website to make an urgent purchase, information about the product availability takes time, and the customer might not wait, but move on to the next seller. This is a disadvantage with decentralised systems. Because it leads to both the horrors: Loss of revenue and Customer dissatisfaction.
How does this happen?
A chain of events actually lead to this situation because if the product is not available, the sales team will have to coordinate with the inventory team to get the raw materials, the purchase them, and possibly hire new workers to manufacture more products. If the incurred additional expenses are not updated to the financial department, the loss to the company gets even higher.
A lot of things are involved in collecting and consolidating data. Decentralised systems can lead to
- Data duplication
- Numerous disparate information
- Time consuming data collection, insufficient and inadequate data
- Customer dissatisfaction, Customer moving onto competitor
The answer to this problem is ERP systems!
Through ERP systems, there is centralised management of data between different systems, and shared between them all.
There will be a Centralised System where all the departments report their data too. When there is an update, it would be done in this centralised system
And SAP is a very powerful ERP system!
It would prevent instances like ‘product not available’, and you will not lose your customer.
SAP is an enterprise Resource Planning software that many companies use successfully. It began with the innovative idea that generated in the minds of a group of friends in Germany – Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther, and started as a private partnership in 1971. Eventually, it grew from being a mere German startup to a global leader in ERP solutions.
There are so many hundreds of fully integrated modules that would help with business management. Through SAP, it is possible to create a centralised system so the businesses can access and share data anytime they want. An SAP software can manage all your departments. – finance, sales, accounting, supply, production, assembly, HR, etc, all integrated intelligently digitally.
And with software like SAP S/4HANA, it is possible to leverage in-memory computing and process huge data volumes and at the same time, support advanced technologies like AI and ML.
Business benefits of implementing SAP in your business
We already know that switching to a decentralised system like SAP would help in saving costs. But the ERP software can control the operational and administration expenses because you get accurate information on time.
Innovative, future proof technology
With SAP, you always have the right tools and technologies that would prepare you for any business requirement in the future. You can leverage the next generation ERP solutions with SAP. It can even make certain forecasts if something needs to be changed in any department, for example, information about a faulty technology and sometimes, even insights on how revenue will shape up in the next year.
Helps automate business processes
Once the business grows, it would be next to impossible to manually assess the performance and measure profit ratios. This is where SAP can help because it can automate the process, and allow the staff to share the data without the hassle of manually recording the data. This accentuates decision making and generates essential information on important company metrics.
The bridge between the customer and the supplier is no longer there
Increase the value delivered to your customers and gain competitive edge with the help of updated data. Plan marketing campaigns targeting specific people and you can be assured that it reaches the right people.
The possibility of data duplication is nil
There is no more worry about data duplication because every shred of data is stored in a single database. The business transparency is taken to the next level, since the ERP system will track every single operation and task right from the product inventory level to billing and delivery.
You can hire an SAP consultant to get started with the process, or if you have been following a decentralised system and would like to switch.
The author: Sascha Thattil works at Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.