The History and Progress of SAP

By: Issac in SAP Tutorials on 2008-11-08

The History and Progress of SAP You would have heard this word quite a number of times "SAP". This word (or an abbreviation) which brightens many an eye. For a IT professional it symbolizes a dream career, for a customer a sigh of relief, for SAP partner a sigh of joy. "SAP" rather a small word but it has become a part or cause of life for many in a short span of time, what is it? What it does? Is what we are going to see in this article

The birth and progress of SAP

SAP is a company which was founded in Germany in 1972 by five people who were working in IBM before that, it is a dream of these people to develop a common package for many a business processes made SAP possible

SAP stands for Systeme, Andwendungen, Produkte in der Datenverarbeitung (these are German words which - translated to English - means Systems, Applications, Products in Data Processing)

The company is incorporated in Germany; with the name SAP AG (it is the parent company). It is located in Walldorf, Germany which is close to the beautiful town of Heidelberg. SAP has subsidiaries in over 50 countries around the world from Argentina to Venezuela. SAP Labs India is SAP's second largest Research & Development and Global Services & Support center in the world. Founded in November 1998, SAP Labs India is one of the four global development hubs (Germany, US and Israel being others) of SAP that contribute to all areas of the SAP product value chain- Research & Breakthrough Innovation, Product Development, Global Services & Support and Customer Solutions & Operations. It is located in Bangalore, India

The original five founders have been so successful that they have multiplied many times over such that SAP AG is now the third largest software maker in the world, with over 17,500 customers (including more than half of the world's 500 top companies). SAP employs over 27,000 people worldwide today, and had revenues of $7.34 billion and Net Income of $581 million in FY01. SAP is listed in Germany (where it is one of the 30 stocks which make up the DAX) and on the NYSE (ticker: SAP).

There are now 44,500 installations of SAP, in 120 countries, with more then 10 million users!

Why SAP is so successful?

Let us look in to the success story of SAP and find out what made it so successful. Back in 1979 SAP made inroads in German market and released SAP R/2 (which runs on mainframes). SAP R/2 was the first integrated, enterprise wide package it was an immediate success.

SAP stayed within the German borders until it had penetrated practically every large German company. SAP expanded into the remainder of Europe during the 80's. Towards the end of the 80's, client-server architecture became popular and SAP responded with the release of SAP R/3 (in 1992). This turned out to be a killer application for SAP, especially in the North American region into which SAP expanded in 1988.

The success of SAP R/3 in North America has been nothing short of stunning. Within a 5 year period, the North American market went from virtually zero to 44% of total SAP worldwide sales. SAP America alone employs more than 3,000 people and has added the names of many of the Fortune 500 to its customer list (8 of the top 10 semiconductor companies, 7 of the top 10 pharmaceutical companies etc). SAP today is available in 46 country-specific versions, incorporating 28 languages including Kanji and other double-byte character languages. SAP also comes in 21 specified industry versions

What is done with SAP?

SAP R/3 is delivered to a customer with selected standard process turned on, and many other optional processes and features turned off. At the heart of SAP R/3 are about 10,000 tables which control the way the processes are executed. Configuration is the process of adjusting the settings of these tables to get SAP to run the way you want it to. Think of a radio with 10,000 dials to tune and you'll get the picture. Functionality included is truly enterprise wide including: Financial Accounting (e.g. general ledger, accounts receivable etc), Management Accounting (e.g. cost centers, profitability analysis etc), Sales, Distribution, Manufacturing, Production Planning, Purchasing, Human Resources, Payroll etc All of these modules are tightly integrated which - as you will find out - is a huge blessing ... but brings with it special challenges.

How SAP is still a leader?

SAP are maintaining and increasing their dominance over their competitors through a combination of

- embracing the internet with mySAP.com (a confusing name we believe) to head off i2 etc - extending their solutions with CRM to head off Siebel - adding functionality to their industry solutions

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Reasons for a company to implement SAP for its business process >>