What is SAP R/3

SAP in English stands for Systems Applications and Products in Data Processing. "R" in R/3 represents Real Time Integration and “3” stands for 3 tier architecture.

SAP allows an enterprise to integrate all their business operations in one system for Planning , Controlling, and Monitoring. The SAP R/3 system consists of application modules that support business transactions and are integrated real-time. Because of integration, a change in one application module will result in an automatic update of the data in the other application modules involved. All application modules have common architecture and user interface. In other words, a person familiar with one module, will have little difficulty in understanding other SAP modules. The SAP screens in general, across modules, have same “look & feel” and navigation.

Some of the commonly used SAP R/3 application modules are:

• Financial accounting and Controlling (FICO)
• Materials management (MM)
• Sales and Distribution (SD)
• Production Planning & Control (PP)
• Asset management (AM)
• Project system (PS)
• Human resources (HR)
• Plant maintenance (PM)
• Quality management (QM)
• Warehouse Management (WM)

SAP also has Industry Solutions which combine the SAP R/3 framework and application modules alongwith additional industry-specific functionalities. Special processes, techniques and modules have been developed for almost all different industry types such as oil and gas, mining, pharmaceuticals, retail, banking etc. which makes SAP relevant for all kinds of businesses.

What is an ERP

ERP stands for Enterprise Resource Planning. The word enterprise means a business, a company or an industry, all its processes and functions in entirety. Resources stand for people, raw material, finished goods, capacity, factory, money etc. of the said industry or business. In any organization there is usually a constraint on resources; Planning therefore represents the activity of utilizing resources to the extent possible so as to maximize the enterprise benefits.

ERP is business support software which is used enterprise wide. It captures all the enterprise processes across all functional tracks in one single data base. Entire organization runs on one software.

ERP solutions have a modular structure. Each of the business functional tracks is usually represented by a separate module. For instance, Materials Management, Human Resources, Finance and Controlling, Sales and Distribution, Transportation Management are separate modules in an ERP solution.

ERP – Characteristics

• All data available in central database. It is updated and available real-time.
• One point entry of data
• Best business practices inbuilt
• Modular system. This enables to implement only required functions. Other functions can be integrated later.
• Transparency and Control to extent required
• Managers can utilize more time in analysis and less in coordination

ERP Vendors
There are several vendors which provide ERP solution. Some of the leading ones are as under,

• SAP
• Oracle Applications
• Microsoft Dynamics
• The Sage Group
• Ramco Systems etc.

SAP is the market leader in ERP solutions. Its closest competitor is Oracle Applications which stands as a distant second to SAP.