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What is SAP (System Applications Products)

What is SAP (System Applications Products)?

The following articles guides you everything about SAP ERP Systems. The first question which arises in our mind “what is SAP” ? and what is SAP ERP software?, which is the best SAP module and which module has a best scope for bright future ?? 

What does SAP stands forSAP stands for Systems, Applications and Products in data processing.

  • SAP is the fourth largest software company in the world.
  • The SAP R/3 system is a business software package designed to integrate all areas of a business.
  • It provides end to end solutions for financials, manufacturing, logistics, distribution etc.
  • All business processes are executed in one SAP system and sharing common information with everyone.
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 SAP is an Enterprise Resource Planning (ERP) system by SAP AG, company based out of Walldorf in Germany. AG is derived from the German word AKtiengesellschaft.  According to German Language SAP Stands for Systeme, Anwendungen und Produkte in Der Datenverarbeitung. SAP software suite that is being implemented as part of re-engineering and Provides end to end solutions for financial, logistics, distribution, inventories. Present scenario large number of companies are using sap software for their day to day business activities.

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. The newest version of the suite is SAP ECC 6.0.

SAP History 

SAP Founded in and around 1972 by five IBM engineers Hopp,  Wellenreuther, Hector, Tschira and Plattner.

SAP R/1 : The first version of SAP software was launched in and around 1972  known as the “R/1 system. R” stands for real-time data processing. it is one tier architecture in which three layers Presentation, Application and Database are installed in one system/server

(one – Presentation + Application + Database)

SAP R/2 : In 1979 second version of SAP R/2 was released. with IBM’s database and a dialogue-oriented business application. SAP R/2 to handle different languages and currencies. R/2 is 2 tier architecture in which three layers Presentation, Application and Database are installed in two separate server.

(Server one – Presentation, Server two – Application + Database

SAP R/3 : SAP upgraded R/2 to R/3. SAP R/3 is the client/server version of the software and it is 3 tier architecture in which three layers Presentation, Application and data base are installed in three server/system.

Server one – Presentation, Server Two – Application, server Three – Database

Products of SAP

  • SAP R/3 and R/3 Enterprise
  • mySAP Business Suite
  • SAP Industry Solutions
  • SAP xApps
  • SAP Solution Manager

Industry Solutions of SAP

What is SAP? ERP System Definition

SAP R/3 – Modules & Integration

What is SAP? ERP System Definition

SAP Functional Modules

SAP Technical Modules

  • ABAP – Advanced business applications programming
  • XI – Exchange Infrastructure
  • Net viewer
  • Basis
  • BIW – Business Information Warehousing

What is SAP FICO ? 

SAP FICO Stands for FI (Financial Accounting) and CO (Controlling). SAP FICO is the imp module of ERP and both Finance and Controlling modules stores the financial transactions data. The ‘FI (Financial Accounting)’ records, collects, and processes financial transactions or information on a real-time basis to provide the necessary inputs for external (statutory) reporting purpose. SAP CO plays an important role for the management decision making purpose and for the internal reporting purpose. Read More for SAP FICO

FICO contains the following sub-modules.

General Ledger accountingCost Element Accounting
Accounts ReceivablesCost Center Accounting
Accounts PayableProfit Center Accounting              
Asset AccountingInternal Orders
Bank AccountingProduct Cost Controlling
ConsolidationProfitability Analysis
Special Purpose Ledger 
Travel Management 

What is SAP MM ?

SAP MM ( Material Management ) is one of the imp module in SAP ERP software and it supports the procurement and inventory functions occurring in day-to-day business operations. This MM module contains many aspects such as purchasing, goods receiving, material storage, consumption-based planning, and inventory. SAP MM module is fully integrated with other modules in the SAP R/3 System such as FICO, SD, QM, PM, PP, and WM. Read More for SAP MM


The Production Planning  application module is used to plan and control the manufacturing activities of a company. consists of all system configuration, master data, , and complete solution to Produce process. Read more for SAP PP Training


SAP SD ( Sales and Distribution ) is important module of SAP and it is a part of logistics.  The main activities of SD are sales order handling, distribution of shipments to customers, billing process, customer invoice, delivery. SD module is fully integrated with other modules in the SAP R/3 System such as Finance, Purchasing(MM), Production Planning(PP). Read Mor for SAP SD

What is SAP HR ?

SAP Human Resources manages complete employee life cycle and payroll. All aspects are covered from training to appraisal. Read more for SAP Human Capital management

Advantages of SAP :-

  • SAP software manages these business management tasks in modules that all work together in one system by sharing information.
  • Promoting consistent practice across an entire division
  • No duplicate data
  • Automate Project Monitoring and Multi dimensional and flexible reporting
  • Standardization of business processes
  • Make Planning, Scheduling, Tracking and Management easier leaving more time for you to perform value-added work
  • Ability to provide clear cut job roles with authorizations
  • Enabling integration with e-commerce
  • Cost Savings on overheads such as Stationery, File Storage, etc

Why – SAP R/3 software has been successful

  • Multi-Lingual
  • Secure Information
  • Multi-Currency
  • Best business Practice
  • Enterprise-Wide
  • Real time processing with an integrated suite of client/server applications

SAP R/3 Architecture

SAP Systems contains three layers such as Presentation Layer, Application Layer and Database Layer.

  • Presentation: – It is a layer where the user work with SAP GUI. It interacts with database layer via Application layer.
  • Application: – It interacts between presentation and database layer
  • Database: – It is a central database that stores all the data of ERP SAP Systems.

SAP Business Suites

SAP offering various applications along with the ERP SAP to meet the customer requirement. The important applications of SAP are as follows.

Phases of SAP Implementation project

  • Phase 1 – Project Preparation,
  • Phase 2 – Business Blueprint,
  • Phase 3 – Realization,
  • Phase 4 – Final Preparation,
  • Phase 5 – Go-Live and support 

project phases - What is SAP ERP System Definition

>>>> If you are new to SAP, read our SAP training tutorials step by step with screen shots >>>>