What Is SAP and What Are the Advantages of Using It?

By Indeed Editorial Team

Updated 2 September 2022

Published 6 June 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Enterprise resource planning (ERP) tools form the backbone of organisations in a variety of industries. SAP is one of the most widely used ERP tools globally. Understanding the features and functionalities offered by SAP has become an essential skill today. Developing SAP skills can help prepare you for a position at a company that uses this software. In this article, we discuss what is SAP, the advantages of using it and how SAP is being used in the workplace.

Related: Technical Skills: Definitions and Examples

What Is SAP?

What is SAP, can be described as an enterprise resource planning software. SAP is the most-used ERP software in the market and contains hundreds of fully integrated modules covering nearly every aspect of business management. Using SAP creates a centralised system for businesses that enables every department to access and share data to create a better work environment for every employee.

Related: What Is A SAP Course? (With Benefits And Job Opportunities)

Advantages Of SAP

Here are the key advantages of using SAP:

Data centralisation

SAP puts the data from different processes and business functions at a single centralised location. This makes sharing data and information across business units and departments easier. Departments such as sales, inventory, finance, production and human resources can access information from different departments and efficiently communicate the needs of their department. This also helps in reducing errors and delays in communication and improves overall efficiency. Any business's success relies on effective communication and data exchange among all departments and SAP as an enterprise resource planning software enables this communication and information exchange.

Related: What Is SAP Basis and What Do SAP Administrators Do?

Automation

SAP enables the automation of workflows and makes processes streamlined. Data from processes like account management, order management and vendor management flows automatically according to the approval and rejection guidelines defined in the system. This helps organisations become more efficient as the employees can focus on more productive tasks and the ERP system handles the mundane ones.

Accessibility

It is possible to deploy SAP through cloud or on-premise. This makes SAP ERP highly versatile and accessible. SAP also offers mobile-based applications for many of its features and applications. SAP supports all the major operating systems and devices like Windows, Linux, Android, iPhones and Mac. This means you, as a user, can access the ERP from anywhere on the go. With the best-in-class security features provided by SAP, any organisation's confidential data is always secure even when accessing it through mobile applications.

Globalisation

SAP provides support for a variety of different geographical locations. As an enterprise tool, SAP supports all the major currencies globally, making it useful for companies with international operations.

Visualisation

The reports and dashboards functionality offered by SAP lets you view all the important data pointers in an easy-to-understand format in real-time. Graphs and charts are easier to understand and go through as compared to large data files. This lets you decide on the next course of action swiftly and makes understanding the processes and related issues that much easier.

Overall revenue growth

The features offered by SAP make processes more efficient, free up the employees to work on important tasks and provide a holistic view of the operations to assess issues more easily. This increase in efficiency leads to the overall growth of revenue and profits for an organisation.

SAP Training And Certifications

If you want to equip yourself with SAP skills and add an extra achievement to your CV, consider SAP training and certification. SAP offers training for all of its modules and provides more than a hundred SAP certifications based on what skills you want to have competency in. Many SAP training modules are free and many more are there that you can pay for. SAP certifications cost money for each certification exam you apply for, so start with the certification that relates the closest to your dream job. Here are a few SAP certifications you can plan for:

  • Project management

  • Spend analysis

  • Integrated business planning

  • Manufacturing implementation

  • Sales implementation

  • Modelling and data management

  • Management accounting

  • Financial accounting

  • Commerce

  • System security architect

Related: On-the-Job Training for Efficient Staff Development

SAP In The Workplace

Many organisations around the globe use SAP, so the knowledge of SAP ERP and its various modules and functionalities can put you in an advantageous position when applying for jobs or even when looking for a promotion within your own organisation. Becoming an expert in SAP for your work area can help you achieve a management or leadership role. Here are a few industries and positions where you would use SAP ERP, along with the modules and functionalities available for each:

Human resource management

SAP ERP offers human resources professionals a variety of tools they would require for maintaining the HR department. Using SAP ERP, you can record all the information about an employee, from the time they apply for the job to the time they leave the company. Here are some HR modules offered by SAP:

  1. Organisational management: You can use this module for creating plans for workflow management.

  2. Personnel administration: You can use this module to perform tasks like recording important employee information. This information may include their hire date, personal data and payroll data.

  3. Personnel development: You can use this module to help develop the employees' skills in your organisation. Skill development helps in reducing employee turnover and increases the employee retention rate of a company.

  4. Time management: You can use this module to keep track of each employee's attendance-related data. This includes information about their shifts, schedules and any leaves or absences.

  5. Payroll: You can use this module to process employee payments and deductions like their salaries, benefits, taxes and company contributions.

Related: 65 Common SAP HR Interview Questions (With Example Answers)

Project management

SAP offers project managers a variety of tools to manage projects from initiation to deployment. Here are some project management modules offered by SAP:

  1. Project initiation module: This module offers features to handle project setup and project launch. You can work on steps like defining the project, creating the work breakdown structure, handling network activities, managing milestones and the overall project creation.

  2. Project planning module: This module includes features like cost planning, material planning, revenue planning, capacity planning, workforce planning and scheduling.

  3. Project execution module: This module includes features to handle the implementation and monitoring of a project. In this module, you can manage things like goods receipt, timesheet entry, goods issue, service entry, confirmations, billing and progress analysis.

  4. Project closure module: This module offers features that relate to the closure of a project.

Related: Management Skills: Definition and Examples

Warehouse management

SAP offers warehouse managers many tools to manage a warehouse successfully. Here are some warehouse management modules offered by SAP:

1. Inbound processing management

SAP makes inbound processing easy to manage by providing features like data validation for shipping notifications, acceptance of production receipts and optimised receipt processing.

2. Outbound processing management

This module lets warehouse managers handle activities like schedule packing and shipping and selecting stock based on attributes.

3. Storage and operations management

This module allows warehouse managers to have better control of their internal processes. These processes include cycle counting and physical inventory, stock visibility and handling equipment status.

4. Cross-functional management features

This module offers features that include batch management, dock appointment scheduling, serial number management, traceability processing and cross-functional analytics.

Related: What Is SAP MM? (Benefits, Components And Career Scope)

Customer relationship management

SAP offers a variety of tools for CRM professionals to help them automate and integrate all customer activities. These include sales, marketing, customer service and commerce. Here are the features of the CRM module:

1. Sales CRM

This module helps you provide a great experience to your customers through features such as AI-powered guided selling, sales strategy content recommendations, personalised quotes, sales negotiation workspaces, dispute resolution management platforms, real-time quota and plan modelling and revenue, billing and invoice management.

2. Marketing CRM

This module offers features like customer behaviour insights, unified customer profile access, seamless customer experience creation, team collaboration, marketing campaign management, multi-dimensional analysis and customer identification and targeting.

3. Customer service CRM

This module helps customer service representatives and managers provide great customer service. This module offers features like customer insights, issue diagnosis optimisation, service interaction history, on-demand network connection, conversation transferring and AI-assisted conversations.

4. Commerce CRM

This module offers features like component integration, order management, industry-specific capabilities, platform extension and transparent commerce processes.

Related: What Is SAP SD? (With Features and Important Components)

Financial management and accounting

SAP offers a complete financial management and accounting system. Here are a few of the features offered by this system:

  1. Financial planning and analysis: This module provides you with features such as strategic planning, forecasting, budgeting, performance management, analytics and reporting.

  2. Accounting and tax management: This module provides you with features such as financial accounting and reconciliation, reporting, disclosure, regulation compliance and closing process accounting.

  3. Treasury and cash management: This system includes features like corporate treasury management, cash management, cash flow forecasting, debt management, risk management and investment management.

  4. Accounts payable and receivable: This system provides modules like credit evaluation, risk management, collections, dispute management, billing and invoice management.

Related: Common SAP Interview Questions (With Example Answers)

Explore more articles