An explanation of SAP ERP

By

In this video, former TechTarget editor Allyson Larcom talks about SAP -- a company that produces ERP software and supports businesses.

SAP is a company that produces ERP software. ERP stands for enterprise resource planning. The multinational software corporation is currently the market leader in the ERP field. SAP's competitors are Oracle and Microsoft Dynamics.

SAP was started in 1972 by five former IBM employees in Mannheim, Germany. The original name for the company translates from German to "Systems, Applications and Products in Data Processing."

The company currently serves around 437,000 customers across more than 180 countries. An estimated 77% of the money exchanged through global business transactions touches an SAP system.

The SAP ERP allows customers to run business processes, such as accounting and human resources, in a cross platform integrated environment. Data is held within a centralized location and shared among the departments, ensuring information is accessible and flows throughout the enterprise.

In a decentralized environment, data is stored locally within individual departments. When data can't be accessed outside of a specific department problems arise with deduplication and inconsistencies in data.

The inability to integrate data means information takes longer to travel from one department to another.

While SAP offers a nonspecific array of software that helps businesses -- like human capital management and sales and distribution -- they also offer industry-specific applications that support business processes unique to a particular industry.

These industry-specific applications include SAP for insurance and SAP for oil and gas. SAP continues to adapt to new demands as technology advances and the ERP market changes. A recent focus for the company is building its cloud computing capabilities and enabling greater mobility.

Since its start in 1972, SAP has continued to find new and improved ways to deliver market leading ERP software to businesses around the world.

See TechTarget's definition for more information on SAP and a list of its related software.