Have you ever driven a BMW? Many would agree it's a fantastic piece of German engineering where every intricate detail has been planned like tapestry on a Persian carpet. No I am not writing an article, advertising BMW, but underlining the amazing products that are produced by Germany, and one such product I would like to talk about is 'SAP'.
I have been working with SAP for many years now and am somewhat embarrassed to admit that I am not entirely sure what it means, or what the acronym stands for. Although after researching online I came up with the answer--Systeme, Anwendungen und Produkte in der Datenverarbeitung-in German, and a translation of it in English would be 'Systems, Applications and Products'. There have been many funny names given to it like 'Say a Prayer' or 'Stop all Production', but in my involvement with SAP I have experienced anything but that. So, what really is SAP?
'SAP' is an ERP application, or 'Enterprise Resource Planner', that integrates all internal and external activities across an organisation to maximise efficiencies with lesser human resources in a paperless environment. In other words, it's a software that is used to manage businesses to become more competitive and commercial. 'SAP' is the brainchild of a group of former IBM engineers who put their act together many years back in Walldorf, Germany. It is used in a wide range of industry, such as manufacturing, finance, retailing, oil & gas, chemical and many others. 'SAP' has already captured a major share of the market as compared to its main competitor, Oracle. Its revenues in 2010 were approximately 17 billion dollars, and a rich human resource of more than 50,000 employees the world over.
Basically, 'SAP' integrates all operational activities of an organisation through an interfacing of distinct modules relating to Sales and Distribution, Purchasing, Finance, Projects, Production Planning, Human Resources, Reporting, etc. The greatest advantage of having a software like 'SAP' is to have an online access to a huge database that can be instantly used to make knowledgeable, coherent and transparent decisions. It is big on accountability and visibility and is getting increasingly popular with the auditors. Most importantly, it provides a set standard across an organisation.
Most of the 'SAP' customers are big companies, like Wal-Mart, GE, Exxon Mobil, Cooper Industries, Caterpillar, and many more. In Pakistan, companies like Shell, Pakistan State Oil, Pakistan Petroleum Limited, and Engro Chemicals use 'SAP'. This software, with its full features, would require a huge investment at the implementation phase. Even the operational cost is substantial. However, with the passage of time, 'SAP' has come up with cheaper solutions for the small and medium size businesses with limited budgets. Companies also have the flexibility to implement certain modules to control parts of their crucial business operations instead of procuring the whole solution.
What is marvellous about 'SAP' is the fact that it provides so many opportunities to people from diverse academic backgrounds. It provides specialised modules for technical and non-technical purposes, and yet all functions could be easily integrated with each other to have a wonderful business system as a whole. So, think of 'SAP' as a virtual world where everyone is connected and the time and distance become irrelevant. An example of it would be that a salesman in China can access information from the Marketing Department located in the USA without going through ten different people for booking orders for the company. In any fast moving business activity, competition is always tough and, therefore, speedy access to accurate and discernible information plays a vital role that is amply available in 'SAP'.
To operate 'SAP', a company needs to purchase the applicable licences which are available from 'SAP'. Many of you who use computers and software applications are familiar with the software licensing model which is similar to buying a licence key from Microsoft for MS Office although with 'SAP' it's on a more complex and larger scale.
Companies like Siemens ('SAP' partners) provide 'SAP' implementation services in the form of resources such as functional consultants, developers and people with different technical and business expertise. In Pakistan, companies like IBM, Siemens and Abascus Global provide these services.
I also want to share some of my experiences as a 'SAP' consultant since I have worked with this ERP for over 5 years now in different roles such as implementation and client support. 'SAP' projects in their implementation phase bring enormous pressure and sleepless nights to those who are putting the jigsaw puzzle together. I have seen the highs and lows during such periods and believe me there is a deluge of challenges on a routine basis. I have seen people literally cry when their efforts went down the drain, and I have seen people ecstatic about 'SAP' when their hard work fell in line with the road map. After implementation of 'SAP', the ownership is transferred to the users in a company who are by nature rigid and averse to any kind of change.
Their backlash is a part of the project and needs a lot of patience and persuasion in getting them on board. The difference between a good 'SAP' implementation and a bad one is not only in how you plan it but more importantly on how it is communicated within the organisation. It is all about managing expectations of the people and creating a sense of awareness and ownership in them as smoothly as possible.
'SAP' is an amazing invention that has revolutionised the business trends all over the world. Being a top of the line ERP system, it is quite costly at the moment. Moreover, it is still going through a transitional phase as upgraded versions of different modules are introduced in the market and the user companies are lured to get their systems upgraded by making further investments. Nevertheless, this product has the capacity and potential to set a standardised system of doing business globally.