SAP ERP

SAP ERP solutions have been in use for decades. Not only do they encompass all the core processes required to run a company and integrate them into a central system, but they also provide the basis for the development of a new, integrated business model. The latest products from the leading software provider create efficiency and transparency in all areas. The latest technologies have greatly simplified the flow of real-time data, allowing each department to control its activities immediately and data-driven.

What ERP systems are there?

ERP systems can be divided into categories according to several criteria. They may differ in terms of the technology used (programming language, operating system, database). Another variant is the distinction between Open Source ERP and Closed Source Software (also proprietary software). With open source software, the source code is freely accessible so that it can be modified by any developer. In closed source software, which also includes SAP, the source code is protected. It can also be subdivided according to target industries. In addition to universal ERP systems, there are also industry solutions for industry, trade and the service sector.

One of the most important distinguishing features today is also the deployment model. The following characteristics are to be mentioned here:

• ERP in the Cloud
• On-Premise ERP
• Hybrid ERP

Due to their high strategic and monetary significance, we would like to describe these three variants of technical provision in more detail below.

ERP in the Cloud

Despite some reservations on the part of German companies, the trend in the ERP environment is clearly towards the cloud. We are also talking about Software-as-a-Service, or SaaS for short. In the classic case, the ERP software is not hosted, operated, maintained and updated in the own company, but in a data center of the provider. The costs are usually paid in the form of a (monthly) rent, which covers all these services. High investments in your own IT infrastructure (e.g. servers and rooms) are no longer necessary. In addition, there is no need for specialized IT personnel to operate and support the ERP system.

Cloud-ERP takes into account current requirements such as scalability, flexibility, mobile working and cross-company collaboration through the architecture mostly to a special degree.

On-Premise ERP

On-Premise-ERP is the classic licensing and usage model for enterprise resource planning. In this case, the software is installed and operated locally, i.e. on the user company's own servers. This offers the advantage that the data remains within the company, which plays a role in the event of pronounced data protection concerns or risks. For an on-premise ERP, licenses must be purchased whose price often depends on the number of users and the scope of functions. Due to the high initial investments, the on-premise variant of ERP systems is aimed more at large companies. Often, however, the ability to customize is also higher than with cloud products.

Hybrid ERP

More and more decision makers want to benefit from the advantages of the cloud, but still prefer to leave critical data on their own servers. Other companies want to gradually move to the cloud. In both cases, hybrid environments represent a compromise. The hybrid cloud is characterized by sensitive data being stored in a private cloud environment with limited access. All other applications and data are in the public cloud. Depending on the software, however, the core application can also be operated in-house. Required additional components are then booked from the cloud.

SAP ERP systems for companies of all sizes

In the past, SAP ERP was almost exclusively used in large companies and corporations for its complexity and pricing. In the meantime, however, the orientation of the Walldorf-based software provider has changed. The portfolio now includes solutions for companies of all sizes:

• SAP products for small businesses: SAP Business One
• SAP products for midsize companies: SAP S/4HANA Cloud, SAP S/4HANA, SAP Business ByDesign and SAP Business One
• SAP products for large enterprises: SAP S/4HANA Cloud, SAP S/4HANA, SAP ERP

Let us take a closer look at the solutions in these three categories.

SAP ERP software for small businesses

There are several variants of the SAP ERP software available for medium-sized companies. SAP Business One can also be used here. SAP Business ByDesign is also a possible option.

The latest SAP ERP generation is also available: SAP S/4HANA or the SaaS variant SAP S/4HANA Cloud. At its core, SAP S/4HANA has a comparable range of functions to the classic SAP ERP. However, the data model has been simplified considerably.

SAP S/4HANA

In contrast to previously available technologies, SAP S/4HANA uses in-memory databases and thus creates the basis for the digitization of companies. In-memory technology makes it possible to analyze large amounts of data in a matter of seconds. In terms of data integration, SAP has also taken a significant step forward with its latest ERP system. With SAP S/4HANA, different formats such as image, video and text can now be integrated without the data having to be transferred to SAP.

As part of the new product generation, SAP Fiori provides personalizable, role-based interfaces that were previously only known from the consumer world. Switching to systems such as a Business Warehouse or manual steps outside the SAP system are no longer necessary to create individual reports.

It can therefore be said that SAP S/4HANA clearly focuses on factors such as personalization and intuitive operation. In addition, the system creates the technological prerequisites for the analysis of large amounts of data (Big Data), the connection of Internet of Things objects and for cross-company networking.

The essential functions and advantages at a glance:

• Digitalization of financial processes, real-time analysis of financial results
• Digitisation of the logistics chain
• Machine learning to optimize production, logistics, plant management and supplier management
• Efficient control of the entire product life cycle across company boundaries
• Company-wide gain in transparency
• Delivers meaningful sales, service, and marketing data for more proactive working
• Numerous industry solutions available

SAP S/4HANA can be operated as an on-premise installation and via a public cloud. Content, localization, functionality and support are the same as in SAP Business Suite. Since 2017, the software has also been offered as a cloud solution under the name SAP S/4HANA Cloud. With this variant, SAP takes over the operation and updating of the system. The core functions of S/4HANA and S/4HANA Cloud are comparable.

SAP Business ByDesign

SAP Business ByDesign can be described as the middle course between the "flagship" SAP S/4HANA and the comparatively lean SAP Business One. The target group are medium-sized companies on the one hand, and corporations that want to integrate subsidiaries or branches into their existing SAP landscape on the other. In contrast to other solutions for medium-sized businesses, SAP Business ByDesign is offered exclusively as Software as a Service in the cloud rental model. All functions are provided via the Internet. Access is either via browser or mobile via tablet and smartphone.

SAP Business ByDesign also uses in-memory technology to access current data in real time. Integrated analysis functions are also available. Important modules and their advantages are:

• Finance: Core processes in accounting, controlling liquidity and cash flow, real-time analyses
• Customer relationship management (CRM): integration of front and back office processes, control of all processes in marketing, service and sales
• Human Resources (HR): Organization and personnel management, employee self services such as time recording
• project management
• Procurement: Purchasing and contract management including strategic purchasing, quotation processing and supplier control
• (SCM): Value Chain Integration, Cost Transparency, Real-Time Inventory Valuation

SAP ERP software for large enterprises and corporations

The SAP ERP Central Component (SAP ECC or SAP ERP for short) and SAP S/4HANA solutions are aimed at large companies and corporate groups. As of 2025, SAP will completely discontinue support for SAP ECC. For user companies, this means that they must switch to SAP S/4HANA by this time. Due to the high distribution we would like to deal with SAP ECC and its components on this page.

What is SAP ECC?

SAP ECC is a classic on-premises system for enterprise resource planning. It is often simply referred to as SAP ERP. As with any other ERP system, the central task of SAP ECC is to consolidate data from all areas of the company. This creates a unified view of resources that enables managers to make data-driven decisions to optimize business processes.

SAP ECC is the basis of the so-called SAP Business Suite, which comprises modules such as SCM (Supply Chain Management) and CRM (Customer Relationship Management). The term "module" no longer exists since the change from the predecessor system SAP R/3 to SAP ECC. Since then, the Walldorf-based software group has been talking about "components". However, both terms refer to parts of the program that were developed to depict business processes in areas such as accounting, sales, or materials management. All components are directly linked so that the departments can work together smoothly and on the basis of common data. In total, SAP ECC consists of ten functional components (modules), which we would like to describe briefly below.

Which components does SAP ECC contain?

With SAP ERP (ECC 6.0) the business processes of different industries can be mapped. The most frequently used components include FI (Financial Accounting), CO (Controlling), MM (Materials Management) and SD (Sales and Distribution). However, companies themselves decide which of the existing components they want to use. For example, it is also possible to leave function modules such as PS (Project System) unused. Let's take a closer look at the most common components and their most important features.

FI (Financial Accounting)

The FI component is responsible for entering all financial transactions in the company. This also includes accounts receivable and accounts payable accounting. Both receivables and payables as well as cash and bank transactions are managed here.

CO (Cost Accounting, Controlling)

Cost Center Accounting, Profit Center Accounting and Financial Planning take place in CO. Controlling is also supported by internal orders. Manufacturing companies also use product cost accounting, which compares actual costs with simulated costs.

SD (Sales, Sales and Distribution)

The Sales component is responsible for controlling all sales processes. This includes direct sales to national and international customers as well as sales via distribution networks. Other important functional areas of SD are billing, returns management and credit allocation.

H3 MM (Materials Management)

The MM component covers the areas of procurement and inventory management. In Inventory Management, the module is responsible for goods receipts, goods issues and stock transfers of material. Inventory counts and reconciliations are also carried out in MM.

PP (production planning and control, production planning and control)

PP supports companies in coordinating requirements and production capacities. This results in optimised planning for production, sales and distribution. Production planning and control from SAP can be used both in individual production and in process and series production.

QM (Quality Management)

The QM component of SAP ERP extends far into the processes of production, sales, procurement and maintenance. It allows the management of external and internal business processes, analyses of quality problems and continuous quality improvement.

PM (Plant Maintenance)

The aim of PM is to ensure that plants, machines and premises are ready for operation. For this purpose, the component monitors the relevant objects and warns in the event of malfunctions. Plant Maintenance covers processes such as maintenance, repair and inspection.

CS (Customer Service)

Maintenance services for customer plants are managed in the customer service module of SAP ERP. In addition, services rendered will be invoiced via CS.

PS (Project System)

PS supports the management of large, complex projects. This can be, for example, the construction of new production facilities. For this purpose, the component bundles all project-related procurements or productions. This ensures the correct allocation of costs to a project. In addition, this allows the project budget to be monitored.

HCM (Human Resources, Human Capital Management)

In HCM, personnel master data is managed, payroll accounting is created and working times are managed. In addition, functions are available for personnel development, business trip management and occupational safety.

Technical Components of SAP ECC

Finally, SAP ECC has two technical components that must be implemented: ABAP and NetWeaver. The ABAP programming language is used, among other things, to create individual reports and develop applications in the SAP environment. NetWeaver, on the other hand, is the development and runtime environment for SAP applications. The platform also serves to integrate databases and business processes.