How SAP evolved and changed ERP?

The impact of SAP on today's business is humungous, The world is witnessing its ease of supporting to one's business in various departments. Let's see the cool stats😮 about SAP.

• SAP is implemented in >4,00,000 companies and in >180 countries
• In 2019 SAP turnover has recorded a staggering figure of 27.55 billion euros
• Currently SAP supports 25 modules

• SAP customers include:
  92% of the Forbes Global 2000 companies

  98% of the 100 most valued brands

  97% of the greenest companies(Newsweek)

• SAP customers distribute 78% and 82% of the world’s food and medical devices respectively

But this is not possible in overnight, The vision🔭 of SAP is sparked among a group of 5 friends before 48 years from now (2020).

1. History of SAP🔬

Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus Tschira, and Claus Wellenreuther are former employees of IBM they noticed that all the companies are using similar business applications with minute varied requirements. So, They proposed to create standard business applications to eliminate reworks, errors-prone incidents, cost factor and to improve effectiveness. However, IBM didn't buy the idea and consequently, In 1972 they founded a company Systemanalyse und Programmentwicklung (System Analysis and Program Development) and later renamed it to Systeme, Anwendungen und Produkte in der Datenverarbeitung (Systems, Applications and Products in Data Processing) which is shortly called as SAP.

2. Evolution of SAP🧬

The first client for SAP is a German chemical company where SAP provides mainframes programs for payrolls and accounting programs. In 1972 SAP launched its first commercial system SAP R/1 which is a single-tier system and in 1979 SAP updated its business by launching SAP R/2 which is a two-tier system, R/2 was a great hit and bought fame for the company.

2.1 SAP R/3 Client-Server architecture

Adding boost to the SAP R/2, In 1992 SAP introduced SAP R/3 which is a Client-server architecture

Here, SAP maintained separate hardware for 3 individual systems.

They categorized the business into 3 layers

a. Presentation layer:
Presentation layer is typically a client system eg: SAP GUI, where the data is displayed in a user-friendly fashion.

b. Application layer:
Application layer mediates the data flow between the presentation layer and Database layer. It performs Read/Write operations with Database layer and presents the results to the presentation layer

c. Database layer:
Database layer stores the data in the form of tables and supports R/W operations to application layer

On a success note, Client-Server architecture bought a lot of success and made many business companies to look at SAP.

The same R/3 architecture was also implemented by various systems namely Oracle, MySQL, Mango DB, Micrsoftsqlserver etc.

SAP R/3 classified their business modules into 2 types

Technical Modules: All the technical and coding related stuff will be developed by SAP ABAP and SAP BASIS.

Functional modules: All the functionalities in real-time business are carried out by 11 main modules.

To have a glimpse😉 of SAP functional modules visit here

2.1.1 SAP R/3 4.6c and 4.7c

After the stable version of SAP R/3, SAP R/3 4.6c was the next version in R/3 class which includes Business plugins, Infructure addons.

Following 4.6c version, In the early 1990s due to the business movement to web application servers, SAP introduced one more version for R/3 class which is SAP R/3 4.7c and renamed the Basis module to Application web servers announcing that their latest support to application servers. This support is released via extension packs📦 instead of releasing a new next-generation ERP systems.

2.2 MySAP ERP 2003 and SAP NetWeaver 2003

In 2003, SAP introduced MySAP ERP Edition which is a huge Business suite and its a combination of SAP R/3 Enterprise, SAP NetWeaver along with some additional components related to the business.

At the same time, SAP SE implemented J2EE engine thanks for its ability to develop web applications and platform-independence. Due to this availability of Java programming SAP-integrated many integration components like SAP CRM, SAP Enterprise Portal and SAP Exchange Infrastructure, and SAP grouped components like XI, BW, EP and KP and named it as SAP NetWeaver.

2.3 MySAP ERP 2004 and SAP Netweaver 2004

In 2004, SAP introduced Enterprise Web Service. Stating briefly, A lot of web services should be run for a single process. For instance, Creation of a PO(placing an order to purchase an item) requires a web service for fetching item details and other web services for vendor details similarly a lot of services should be run to post PO. Hence, SAP adopted Enterprise Services Achitecture(ECA) to SAP R/3. As the SAP R/3 got a new component to its core they changed the name to ERP central component(ECC). Moreover, Enterprise Services Architecture changed to Enterprise Service-oriented Architecture(ESoA).

2.4 SAP ERP 2006 and SAP Netweaver 7.0

In 2005, MySAP ERP 2005 edition is introduced later changed to SAP ERP 6.0 (in 2006). SAP realized that even after grouping the individual components into NetWeaver it's not the way how the customers are using it up. Hence SAP Netweaver 2007 introduced Usage types for individual components. For instance, Before introducing usage types if we want to install XI lot of additional components should be installed but after, the XI usage type will spontaneously install every component.

After SAP ERP 6.0 we can say that SAP found a standard ERP model since then there are no much changes to the ERP model unless they provided constant extension packs to business. The most recent extension pack for SAP ERP 6.0 is "EHP08"(in 2016). Soon after that, it's monster time😈 SAP S/4 HANA

At the end of 2020 nearly 50% of global sap customers are planning🤔 to migrate from ERP to SAP S/4 HANA

2.5 SAP S/4 HANA

Here is the big fish, SAP SE after years of working experience with their customers. Finally wants to boost up their computing time⏳, portability, simplified UI and dream of using their database(HANA) came up with S/4 HANA where S is a Simplified data model, 4 signifies the fourth generation (after R/2, R/3 and ERP) and HANA meant to be High-performance analytical appliance.

2.5.1 Overview

SAP HANA is an SAP application which uses Inbuilt memory(RAM) to compute a lot of real-time data with less than a second.

Instead of performing R/W operations from hard disk which consumes a lot of computing time (usually happens in legacy systems), HANA performs R/W operations in RAM itself completing the tasks (OLAP & OLTP) under a second.

It's a known fact, that data volumes💽 are rocketing throughout the years and migration to the cloud database is the best solution which is implemented by SAP.
It uses a structural database where the data is stored in rows and columns of the tables. However, the column data is shirked to a large extent thanks to the developed compression techniques to fetch data faster than the row data.

Now, SAP enhancing it's ECC core to support🤝 HANA, let me illustrate some of HANA's cool features

Supply chain and retail optimization
Forecasting and profitability reporting
Database Services
Analytics and Data Processing
Application Development and Deployment
Data Access, Integration and Quality
Administration and IT Operations
Security and Multi-Engine

Although, Evolution of SAP underwent many versions it is the customer👔 satisfaction which bought SAP as a leading ERP systems provider.

References:

https://medium.com/@sapnwnewbie/evolution-of-sap-erp-architecture-in-11-steps-c060150a150c
https://www.sap.com/india/products/hana/features.html
https://www.saponlinetutorials.com/about-sap-modules-sap-modules-list-overview/
https://www.sap.com/documents/2017/04/4666ecdd-b67c-0010-82c7-eda71af511fa.html