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SAP Full Form & Definition of SAP ERP Software

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SAP Full Form & Definition of SAP ERP Software

What is SAP

SAP stands for Systems Applications and Products in Data Processing (English) and in German SAP abbreviation isSysteme, Andwendungen, Produkte in der Datenverarbeitung (German).

SAP by definition is also an ERP (Enterprise Resource Planning) software. Founded by Hopp, Hector, Plattner, Wellenreuther and Tschira in the year 1972, the SAP system features numerous fully integrated modules. As you continue reading, you will learn to define SAP and understand what SAP software is used for.

  • SAP aspects are well-designed to take care of almost all types of business management problems.
  • SAP has found its way to the Forbes 2018 list pertaining to "The World's Largest Public Companie." SAP ranked as the 12th-largest technology-enabled company and presented revenue of $27.4 billion IN 2017.
  • SAP has its headquarters in Walldorf, Germany.
  • The 25 plus industry-specific SAP business software solutions available in the marketplace have positively impacted over 75,000 ,000 customers across 120 countries (as of 2010).
  • According to a corporate fact sheet released by 2018 by the Company itself, SAP had 404,000 customers spread across 180 countries. More than 80% of these customers are small- and-medium sized businesses (SMBs).
  • It boasts of 140,000 installations worldwide.
  • SAP serves to be at the top of the list in the ERP market.
  • The company provides hybrid, on-premises and cloud deployment models.
  • SAP cloud computing options are the core area of interest and form the Company's future business strategies.
  • It strongly rubs shoulders with SAP competitors like Microsoft Dynamics, Oracle, etc.
  • The initial release of the SAP accounting software was known as R/2 on a Mainframe.
  • Later on, R/3 was released by SAP as Client Server Software; the R stands for real time in R/3.
  • The latest release by SAP is SAP Hana.
  • The new dimension products of SAP are based on Netweaver.
  • According to estimates, 77% of total global business transactions are influenced by the solutions offered by SAP systems.

Why SAP?

SAP system provides integrated software solutions for processing all functionalities of business organization with a view of providing unified solutions. New and innovative standards related to business information management applications and solutions have been provided by the SAP R/3 enterprise application suite that is applicable for open-ended client/server systems.

What is SAP? Definition of SAP ERP System

Originally, SAP was designed to help clients interact and use a common corporate database that supported a wide range of applications. Over time, SAP products and applications have been compacted and they are also being used by corporate giants like IBM and Microsoft for running their business operations.

SAP makes usage of ABAP (Advanced Business Application Programming) that is categorized as a 4th Generation Programming Language. The Company is responsible for the development of SAP ABAP, which is a high-level programming language with syntax similar to COBOL. SAP ABAP presents the features of several other programming languages of the likes of Visual Basic, Power Builder and C.

What is SAP Experience?

SAP serves in the capacity of a table-drive, customization software.

  • Businesses can make rapid changes with respect to their business requirements by making use of a common set of SAP programs.
  • SAP offers user-exits for businesses; they serve as additional source codes.
  • SAP tools help users set fields attributes to display, hide or act as mandatory fields.
  • The standard tables/ programs offered by SAP should not be altered too often to save on SAP upgrading costs.
  • Generally, the standard business applications provided by SAP software go a long way in saving the money and time involved in testing and developing different programs.
  • Therefore, companies prefer to utilize the tools and features provided by SAP rather than go for other software programs/ systems.
  • SAP applications provide efficient financial, asset, cost and other accounting solutions along with taking care of production operations/materials, plants, personnel and archived documents.
  • SAP has released smartly-designed applications/ programs like ByDesign & BusinessOne for SMEs and SMBs.

Definition of SAP ERP System

The SAP ERP Central Component (SAP ECC) or SAP ERP System as it is commonly called, contains a set of technical and functional modules. These modules help big and small businesses manage their business processes effectively via a unified system. For small-sized organizations, SAP provides its impressive Business One ERP platform. ECC serves as the on-premises SAP version that is extremely helpful for large and medium-sized companies. The main modules of SAP ERP are further divisible as subsets of its technical and functional modules.

Architecture of SAP R/3

There are three layers of the SAP R/3 Architecture.

  • Presentation in which the user works with the Graphical user interface via the application layer.
  • Application layer allows the user to interact between the presentation and database layer.
  • Database layer which is known as the central database meant for storing all data of the ERP SAP Systems.

What is SAP? Definition of SAP ERP System

Various phases of SAP Software Implementation project:

  • Phase 1- Project preparation
  • Phase 2- Business blueprint
  • Phase 3- Realization
  • Phase 4- Final preparation
  • Phase 5- Go Live and support

What is SAP? Definition of SAP ERP System

Who uses SAP Software?

What is Full form of SAP?


  • For small and medium enterprises SAP has released ByDesign & BusinessOne.

History and Growth of SAP:

  1. SAP the company was founded in Germany in 1972 by five ex-IBM engineers Wellenreuther, Hopp, Hector, Plattner and Tschira.
  2. Initial Release was called R/2 on a Mainframe.
  3. SAP Later released R/3 as Client Server Software, the R in R/3 stands for Real time.
  4. New Dimension Products based on Netweaver.
  5. SAP Latest release is SAP HANA.

SAP Versions

1. SAP R/1: This was the very first time that SAP system was launched in 1972. The one-tier architecture offered real-time tools and features for data processing.
2. SAP R/2: Introduced in 1979, this second version of SAP was a dialogue-based, database -oriented business solution.
3. SAP R/3: This version of SAP was designed to be compatible with open client/server systems. The new standards laid down by SAP R/3 provides the best solutions with respect to business information management. It is more successful because:

  • The information provided to it remains secure.
  • SAP R/3 functions in multi-currency.
  • The best business practices are put to use by SAP R/3.
  • SAP R/3 is well-accepted by most types of enterprises.
  • Real time processing tasks are very efficient in terms of server/client applications.
  • The SAP R/3 application serves to be multi lingual.
  • The SAP R/3 system utilizes the client/server model and is compatible with various platforms like Windows 2000.
  • The latest version of R/3 features comprehensive Internet-enabled capabilities.

4. SAP ERP Central Component (ECC) 6.0
5. SAP HANA: In 2011, SAP HANA was launched by the Company.

  • SAP HANA serves as an effective in-memory database platform.
  • HANA is a major development project for the Company and forms an important part of its future strategy.
  • It is expected that HANA will take over the position held by traditional SAP databases in context to its business applications.
  • SAP has positioned HANA as a very effective deployment option for the Business Suite.
  • S/4HANA was released in the year 2015 as a rewrite of the Business Suite that has been optimized for the SAP HANA platform.

Advantages of SAP

  • Duplication of data is absent in SAP Technology.
  • The presence of standardized business processes makes SAP convenient, quick and easy to use.
  • The SAP software has made scheduling, planning, management, tracking of different processes much easier than before.
  • SAP allows for integration with e-commerce capabilities.
  • SAP is cost effective and reduces the administrative charges of client organizations.
  • The tasks related to monitoring projects and flexible reporting have been automated via SAP.
  • SAP provides consistency across different divisions of business operations/ processes.

List of SAP Module and Products

SAP Transforms S/4HANA HCM Support

SAP provides different cloud adoption programs for bringing services and the latest tools under a single umbrella to aid the cause of data integration.

  • SAP professionals are now making safe cloud HR migrations with SAP changing S/4HANA HCM support to minimize data loss and compliance risks.
  • S/4HANA serves as the Company’s in-memory version related to SAP ERP Business Suite platform.
  • S/4HANA runs on SAP and is designed to reduce complexity and eventually replace SAP ECC.


SAP C/4 HANA offers cloud-based customer experiences. This SAP e-commerce platform was introduced recently in June 2018. SAP C/4 HANA comprises of 5 component applications:

  • SAP Marketing Cloud
  • SAP Customer Cloud
  • SAP Sales Cloud
  • SAP Service Cloud
  • SAP Customer Data Cloud.

SAP Leonardo

It is a well-integrated system of services and software encompassing next-generation technologies like Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), big data, 3-D printing (additive manufacturing), advanced analytics, blockchain, etc. – all under the umbrella of the SAP Cloud Platform.

SAP Fiori

SAP Fiori consists of a well-integrated line of SAP apps. Among these apps, the first 25 were introduced in 2013. Fiori addresses the limited concerns of SAP user experiences and/or UI complexities in the best possible manner. Different Fiori apps are known to run exclusively on the S/4HANA platform. SAP Fiori and S/4HANA platforms are expected to intertwine more closely as they evolve in future.

Functional Modules of SAP

Some of the most popular SAP functional modules are given below and define SAP programs in the best possible way:

  • SAP PP (Production Planning)
  • SAP SD (Sales and Distribution)
  • SAP FICO (Financial Accounting and Controlling)
  • SAP HR (Human Resources)
  • SAP MM (Material Management)
  • SAP WM (Warehouse Management)
  • SAP QM (Quality Management)
  • SAP LIS (Logistics Information System)
  • SAP EHS (Environment Health and Safety)
  • SAP PLM (Product Life Cycle Management)
  • SAP PS (Project Systems)
  • SAP Human Capital Management (HCM)

SAP Cross-application Components

The cross-application components of SAP ERP are capable of being implemented along with all main modules, these include:

  • Document Management System
  • Classification
  • Product Lifecycle Management

SAP Technical Modules

Examples of SAP knowledge in terms of technology modules are best observed in:

  • SAP Netweaver
  • SAP XI (Exchange Infrastructure)
  • SAP ABAP (Advanced Business Applications Programming)
  • SAP BW (Business Warehousing)
  • SAP IS (Information Systems) Management
  • Sap Business Intelligence (BI)

SAP Industry-specific Applications

The various SAP industry-specific programs and applications support business processes that are unique to specific industries, these include:

  • SAP for Utilities
  • SAP for Oil and Gas
  • SAP for Insurance
  • SAP Healthcare

SAP Business Suites

The SAP Business Suite is a collection of business applications that effectively manage the integration of business, processes and industry-focused functionality. The Business Suite of SAP possesses SAP ERP as its foundation. It also includes modules to support customer relationship management, supply chain management, product lifecycle management and supplier relationship management. It is possible for SAP customers to run its Business Suite with the help of the SAP HANA platform. SAP provides different applications featuring the tools/ functions of SAP ERP to meet customer requirements, these are as follows:

  • SAP SCM (Supply Chain Management)
  • SAP SRM (Supplier Relationship Management)
  • SAP BI (Business Intelligence)
  • SAP APO (Advanced Planning and Optimization)
  • SAP CRM (Customer Relationship Management)
  • SAP SEM (Strategic Enterprise Management Software)
  • SAP PLM (Product Life Cycle Management)


Now that you have a better idea of SAP meaning, its versions, features and functionality, you may want to assess the SAP program or application that is best suited for your business needs. In case you have further inputs or queries regarding SAP system definition or the definition of SAP modules / submodules, do write to us in the comments section below – we will wait to hear from you.