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In the ERP market, SAP is considered number one. SAP has been installed more than 140,000 times worldwide over 25 industry-specific business solutions and more than 75,000 customers in almost 120 countries. These are the records till the year 2010.
There are some products in the market that are competitors of SAP custom development solutions. Those products are Oracle, Microsoft Dynamics, etc.
Why is SAP required?
Before looking at why SAP is required and how it can help in business processes, below is a step-by-step guide that will make businesses understand how different departments are involved in the overall business process.
The process followed by business units:
- The clients contact the sales team to check product availability.
- The sales team approaches the inventory department to check product availability.
- The sales team approaches the production department in the case when the product goes out of stock; this is done to get the product manufactured.
- For the availability of raw materials of the product, the production planning team checks with the inventory department.
- The production planning team buys the raw material from the vendors in case the raw material is not available with the inventory department.
- For actual production, the raw material is forwarded to the shop floor execution by the production planning department.
- The goods are sent to the sales experiences team by the shop floor team once they are ready.
- The goods are delivered to the clients by the sales team.
- Updates about the revenue generated by the product's sale are provided to the finance team by the sales team. Updates about the payments needed to be made to various vendors for raw materials are provided to the finance team by the production planning team.
- For any issue that is related to human resources, all the departments approach HR.
Every business that is running all over the world needs some technology. Technology has now become the backbone of all phases of business operations. Enterprises use many software programs and some cloud computing services for critical applications to handle different procedures. Are they interconnected, and can they seamlessly work together? Maybe not. Many businesses need help to create a unified ecosystem that meets all their current needs. If surveys are to be believed, an average enterprise uses:
- Approx 90 services from the cloud for HCM Functions.
- Approx 60 tools for finance and accounting.
- 43 CRM/sales tools.
- 41 software development services
The numbers depicted above may seem staggering, but if it is looked at from a different perspective, then all the departments in an enterprise have their software solutions and operate independently from each other. And even within the departments, there may be separate software for specific functions, software that might not be integrated with other rest of the software setup in the enterprise. Big data solutions and hybrid cloud environment computing service solutions are vital to the SAP implementation process. The businesses will get many additional benefits by including them with the modules.
SAP software solutions differ from what the enterprise knows about them; they are much more.
Cloud software solution companies like Microsoft Azure are also providing SAP custom development solutions to enterprises.
Understanding why a business would want to implement SAP through an Example
We will now look at an example to understand why businesses worldwide would want to implement SAP with the help of a model.
Let us consider one big challenge that is faced by a product business.
There are multiple functions in the area of logistics, material document management, sales and distribution, management of the warehouse, customer service provider, and volume management of the fleet are few examples of the functions in the area of logistics.
Different and separate technologies are used for operation in each department. The main question when there are various technologies used for all the departments is how these departments communicate with each other. Without communication, it isn't easy to integrate and analyze. With all that, there will be a problem in making sound business decisions based on the researched and integrated data.
So this problem can be solved by using SAP software. An SAP software can integrate all the functions that provide data by giving stakeholders access. Once all the parts have been integrated, the process of making a decision (a sound business decision) will become easy and will result in the following:
- For the full support of business cloud applications, single integrated platforms are implemented, and TCO reduction is made.
- Sales are reduced (revenue is increased) because of less stock usage.
- There are a lot of savings on the cost, and delays are also reduced because of more efficient and reliable purchasing of the materials.
- There are very few delays in the delivery process, which improves the level of customer satisfaction.
- The freight and distribution costs are reduced.
A business may be in some other niche than manufacturing. Still, for any company worldwide, there is an SAP data archiving model for their business operation that will help them improve flexibility and full integration of all the functions and offer efficient and cost-saving solutions at every stage of the lifecycle of a product.
The SAP software is beautiful as only those modules can be secured if a business needs that. Those modules can also be implemented - providing customized solutions.
Solutions offered by SAP
All the primary modules that are included in an entire SAP system performance are shown in the below list, along with the logistics module above. Each module will address challenges that are faced by the specific business operations; alongside them, there are add-on solutions for customization:
- Enterprise Resource Planning
- For Sales and Marketing, CRM
- Sales and Distribution
- Financial Management
- Human Resources
- Asset Management
- Management of Product life cycle
- Control of the supply chain
For almost all the niches, industry-specific solutions are provided by SAP; those niches are manufacturing, pharmaceuticals, healthcare, insurance, finance, etc. The ability to purchase only the modules that can "fit" can be termed as two of the most significant advantages of using SAP for any business of any type and size.
Who uses SAP Solutions?
There are almost 2,00,000 businesses worldwide that take the help of some or a complete set of SAP modules, which is done in more than 150 countries. There is a belief that it has become common nowadays that only big enterprises need SAP software. Still, about 80% of small-to-medium-sized enterprises are also on board and using SAP software.
A company's bottom line determines the success of the SAP software they use. And the bottom line results from excellent efficiency, more streamlined operations, and making better decisions for the business.
A continuous yearly growth rate of 25% is enough for proof for a mid-sized company such as electric and supply, producer, and retailer of lighting and other home goods.
According to an esteemed enterprise's of operations and finance, "Without SAP, the businesses simply wouldn't have any competitive lead ties and because of that, they wouldn't be able to fill orders as fast as they do by using SAP. SAP does much more than enable growth for an enterprise. It makes the models of businesses that are small-medium sized possible to exist in the global market."
There is a large enterprise named Siemens, and it provides technical solutions to a variety of industries such as construction, energy, healthcare, etc. The challenge faced by them was to consolidate and simplify complex and disjoint processes. Their executives wanted to speed up the processes and access to the information that would inform their decision-making.
They turned to an SAP solutions company and recently migrated to the SAP HANA platform for additional benefits; it can also be paired seamlessly with Microsoft Azure. Enterprises can now enjoy increased productivity through rapid processes and real-time data insights. This has also lowered the cost of the enterprises for both hardware and data-processing centers, and business integrations and continuity have been improved very much as enabled in the enterprises by SAP.
If the enterprises are looked at from the perspective of improved operations, then a 24% reduction in the size of the database has been observed in Siemens, and a 60% increase in productivity is observed. And as much as 90 times faster performance has been reported. If someone wants to understand why companies need and use SAP, these reported statistics should provide all the answers.
Read the blog - Why Is SAP Better Than Other ERP Solutions?
Implementation of SAP: Key to Success or Failure
Implementation of SAP for any enterprise can only occur after the decision is made to incorporate any SAP software solution. Enterprises face big failure if they implement and deploy SAP solutions too quickly and without expertise.
Let's consider two enterprises implementing SAP solutions, have identified SAP software as their solution for various issues with operations and other areas, mainly problems of warehouse and inventory, logistics, especially distribution to retailers, and usually slow business processes.
Ent A launched one project to integrate SAP ERP over five years; this will result in a new warehouse management system and help improve the structure of its distribution centers.
While the recommendation for Ent B was an implementation over five years, the enterprise insisted upon 2.5 years, reducing the implementation time by half. They had to sacrifice system testing and cutover other activities to make this happen. The cutover was planned during the enterprise's busiest season - a big mistake. As a result, the distribution suffered, and B's reputation declined. As a result, it saw a drop in its stock value.
The process of implementation of SAP data is essential and critical. Any mistake made during it will result in enormous losses for the enterprise. The SAP development company should let the experts implement SAP, and they should not interfere with the time or other vital constraints in the implementation process. Suppose the SAP is implemented accurately as it should be. In that case, it will give the enterprises many benefits and will improve the process of production and also improve operations. But if the implementation process is altered, the results, like a drop in the stock value, can be observed.
Phases of Implementation
1. Discover
The solution's capabilities are investigated by active encouragement at this stage; this means the business values are established, and the business that can be generated through it is determined. Common grounds are to be found, and the development of an adoption plan and roadmap is done by both the C-level executives and managers, along with those responsible for implementation.
SAP allows businesses to take advantage of SAP 5/4HANA to explore the solution's capabilities and provides many excellent tools for making decisions, such as SAP 5/4HANA Journey map and SAP 5/4 HANA Community Network.
2. Prepare
The execution of the initial phase is done in this stage, and the preparations for the implementation process are done. The businesses should allocate time for finalizing plans, assessing responsibility to the teams, and provisioning the starter system.
The businesses need to encourage their teams to go through a few iterations to fine-tune the plans of the project and to make sure that they are aligned with respective activities of the project that include:
- Project goal's confirmation
- High-level scope
- Clearly defining project roles and responsibilities
- Strong governance of the whole process to steer the lifecycle of the project.
Planning effectively is the backbone of implementation; it is the only way to achieve success in this phase. Businesses should ensure that their project plans account for the possible risks that may affect the implementation of SAP software solutions.
A starter system should be requested at this stage for SAP 5/4 HANA cloud monitoring customers, and a user-id should be created for all the team members. The businesses also need to ensure that all employees complete the onboarding process.
- Explore: Fit-to-standard analysis should be performed at this stage to validate the solution functionality listed in the project scope and to confirm that all the requirements of the businesses are met.
- Realize: After the Explore stage, it is time to deploy a series of Agile spirits to configure, build and test the newly integrated environment for business and the systems. This should be done once all the scenarios and process requirements are identified.
- Deploy: In this stage, the teams assume the setup of the production design and confirmation of the enterprise's readiness to take the business operations to a new environment. The project manager is still the project manager in charge of crossing out all the tasks within the list and offering risk and issue management. The learning of the end-user and onboarding preparation are the key deliverables of this stage. A clearly defined learning plan must be there. There should be a cutover plan in place as well; it will outline the essential tasks to be performed, like the go/no-go decision point and migration/creation of data, and setup of the non-transportable object.
- Run: At the end of the implementation process, it is time to continue adopting and implementing the new solution throughout the enterprise. The businesses should start adding new users and encourage them to execute business transactions and activate the software's functionality if needed. Regression testing should be run in the background by the development team for quarterly upgrades to ensure the latest version of the system.
Conclusion
All SAP development companies try their best to provide enterprises with the best service solutions. But the proper implementation of SAP depends not only on the SAP development companies but also on the enterprises that want to use the SAP.
SAP is integrated with big data public cloud solutions, cloud software solutions, and cloud services provider to facilitate the smooth functioning of an enterprise's business operations. The enterprises can also go for SAP custom development to get specially made SAP software solutions. The main reason behind the failure or success of the implementation of SAP system performance is planning and executing it accordingly if there is any change in the plan that the companies formulate.
