What is SAP?

SAP is a German Software supplier founded in 1972 in Walldorf by a number of former IBM employees. SAP stands for Systemen, Applicationen und Processen (or Programs), but several variants have been coined over the years that also provide a good description. SAP is the fourth largest, leading software company in the world that helps companies manage business processes. It develops solutions that enable effective data processing and information flows between organisations.

SAP is part of a category of software known as Enterprise Resource Planning or ERP software. ERP systems integrate business processes and various functional areas into one powerful system. There are a large number of these areas, also known as modules. Below are the most well-known in alphabetical order:

  • AM - Fixed Asset Management (Beheer Vaste Activa)
  • CO - Controlling
  • FI - Financial Accounting (Financiële Boekhouding)
  • HR - Human Resource (Personeelszaken)
  • IS - Industry Solutions (Industrie Oplossingen)
  • MM - Materials Management (Materiaalbeheer)
  • PM - Plant Maintenance (Fabrieksonderhoud)
  • PP - Production Planning (Productieplanning)
  • PS - Project System
  • QM - Quality Management (Kwaliteitsbeheer)
  • SD - Sales and Distribution (Verkoop en Distributie)
  • WF - Workflow

Each of the above modules contains sub-modules, transactions, files and tables about which more can be read in one of the other articles.

What is important to know is that in the almost 40 years of its existence, SAP has grown into a mega administrative system in which every conceivable form and flavour of business can be implemented. All possible business scenarios have already been invented and included in SAP. This enormous diversity of possibilities is also what can make SAP complicated for new companies during implementation. A good SAP Basic Consultant is therefore required if a company is going to start with SAP. This person can then implement the SAP system in the most appropriate way, which is at least easy.

When it comes to SAP, you will probably have heard of one of the following terms: SAP ECC, SAP S/4 HANA, IDES or Netweaver. These are still abbreviations that are used when talking about SAP. If you read my article "SAP Timeline", then a few are also touched upon. It is unnecessary to want to understand and fathom everything exactly, but if you want to join the conversation next time, memorise these terms:


  • SAP: Systems, Applications and Processes
  • R/3: Real-time data processing 3-tier architecture (Database, Application Server, Client)
  • ECC 6.0: ERP Central Component
  • EHP 8: Enhancement Package
  • IDES: Internet Demonstration and Evaluation System

There is a lot to tell about all the ins and outs of SAP. Thousands of websites have been written about it. However, after reading this article, you will know in broad outline what SAP is and why it is indispensable for many companies.