Origin and Growth of Sap

SAP Company was founded in Germany in year1972 by five ex-IBM engineers. SAP means Systems, application, products in Data Processing. So now you know! Being integrated in Germany, the full name of parent company is SAP AG. It is situated in Walldorf, Germany close to the beautiful town of Heidelberg. It has subsidiaries in over 50 countries all around the world from Argentina to Venezuela. The innovative five founders have been very successful that they have multiplied lots of times over such that SAP AG is now the third leading software manufacturer in the world, with more than 17,500 customers (including more than half the world’s 500 top companies). SAP employs larger than 27,000 people worldwide today, and had revenues of $7.34 billion and the Net Income of $581 million in FY01.Now there are 44,500 installations of SAP, in 120 countries, with 10 million users!

What made this company so victorious? Back in 1979 SAP released SAP R/2 (which also runs on mainframes) into the German market. SAP R/2 was the first incorporated, enterprise wide package and was an instant success. For years SAP remained within the German borders till it had penetrated practically every big German company. Looking for more and more growth, SAP expanded into Europe during the 80’s. Towards the end of 80’s, client-server architecture became so popular and SAP responded with the release of SAP R/3. The great success of SAP R/3 in North America has been nothing but very stunning. Within a period of 5 year, the North American market went from nearly zero to 44% of total SAP worldwide sales. SAP is available today in 46 country-specific versions, integrating 28 languages including Kanji and many other double-byte character languages. SAP is also coming in 21 industry-specific versions.

SAP R/3 is delivered to a client with selected standard procedure turned on, and many several other optional processes and features turned off. At the heart of SAP R/3 are nearly 10,000 tables that control the way the processes are carried out. Configuration is adjusting the settings of these tables to obtain SAP to run the way you desire it to. Imagine a radio with 10,000 dials to be tuned and you’ll get the picture. Functionality integrated is truly venture wide including: Financial Accounting (e.g. the general ledger or accounts receivable etc), Management Accounting (e.g. the cost centers or profitability analysis etc), Sales, Distribution, Production Planning, Manufacturing, Human Resources, Purchasing, and Payroll etc. All of these modules are firmly integrated which as you will find out is a big blessing but this brings with it special challenges. The SAP applications, built about their latest R/3 system, offer the capability to manage financial asset, and cost accounting, materials, production operations and personnel, plants, and archived documents. R/3 system runs on many platforms also including Windows 2000 and it also uses the client/server model. Latest version of R/3 includes a complete Internet-enabled package.

SAP applications are maintaining and increasing their domination above their competitors through combination of

– Implementation the internet with mySAP.com to head off i2 etc

– extending their solution with CRM to head off Siebel

– adding more functionality to their industry solutions