What Is SAP and Why Is It Important In the Workplace?

By Indeed Editorial Team

Updated 8 October 2022 | Published 30 June 2021

Updated 8 October 2022

Published 30 June 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The SAP software connects and integrates different business functions into a single intelligent suite on a digital platform. It provides powerful tools to assist businesses in managing their finances, logistics, marketing and other business areas. Understanding how it works and implementing it can help you and your organisation advance and be more efficient. In this article, we outline what SAP is, what are its benefits and how it's utilised in the workplace.

What is SAP?

SAP, short for Systems Applications and Products, is a popular enterprise resource planning (ERP) software designed to power the next generation of business. SAP creates a centralised system for organisations, allowing every department to access, upload, share and retrieve common data, which leads to a more effective work environment. SAP provides proven methodologies, advanced software tools and best practices to get your ERP solution up and running quickly and contributing to your business goals. With its advanced capabilities, SAP is a popular ERP software on the market, with hundreds of fully integrated modules covering nearly every industry.

Related: How to Become an SAP Consultant (Including Skills Required)

What is ERP?

At the macro level, ERP is a software application system that enables businesses to manage their primary business functions in a single location. An ERP software consists of applications that automates and allows business functions such as finance, sales, marketing, procurement and human resources (HR) to communicate and integrate their data. As context, SAP is a software solution that is part of the ERP family.

What does SAP actually do and why is it important?

SAP retrieves and processes data from all business functions on a single platform. SAP is critical for a large number of organisations because it allows all departments to easily communicate with one another. The success of any organisation is dependent on effective communication and data exchange among its functions, and SAP is a powerful tool for assisting in those efforts. Other benefits of SAP include:

  • Promoting consistent and standardised business practices

  • Providing clearly defined job roles with authorisations

  • Allowing for integration with e-commerce

  • Generating cost savings on overheads

  • Automating project monitoring and reporting

  • Enabling planning, scheduling and tracking to be more effective

That said, SAP can enhance your company's productivity by automating repetitive tasks and making more efficient use of time, money and resources.

What are SAP skills?

If you're applying to companies utilising ERP software, learning SAP can make you a more competitive candidate. In some cases, SAP experience and proficiency may even be required. Here are a few examples of widely-used SAP skills:

  • Utilising transactions: Knowing how to utilise transactions and enter data into the SAP software grants you a competitive edge when applying for a job relating to sales management.

  • Reporting: Comprehending how to execute and generate reports allows you to extract specific data that you or your colleague may need.

  • Accounting: Understanding how to utilise the accounting modules within the SAP software can help you land a job in a finance or accounting firm, or even expedite your tasks if you're working in a company's accounting department.

  • Recruiting: Knowing the recruiting modules of SAP software can assist HR professionals in better managing and sorting through applicants and potential recruits.

  • Management: SAP includes a number of management modules, encompassing areas such as customer, project, warehouse, transportation and inventory management. Obtaining knowledge and expertise in the different management systems gives you an advantage when applying or negotiating promotion for a management position.

  • Communication: The ability to communicate with other departments is one of the most important tenets of the SAP software. Being able to demonstrate to a recruiter your understanding of interdepartmental communication using SAP software can be a plus point.

Related: What are Technical Skills

SAP training and certification

Consider SAP training and certification if you want to intellectually enhance yourself with SAP skills and boast an extra achievement on your resume. SAP provides training across all of its modules. In fact, over a hundred SAP certifications are based on the skills you want to be fully competent and proficient at. Many SAP training modules are free, and many more are available for a fee. SAP certification does cost money for each certification exam that you apply for, so begin with a certification that is most relevant to your potential position and career objective.

Listed below are some SAP certifications you can obtain:

  • Spend analysis

  • Project management

  • Integrated business planning

  • Finance implementation

  • Manufacturing implementation

  • Sales implementation

  • Modelling and data management

  • Management accounting

  • Financial accounting

  • Commerce

  • System security architect

SAP in the workplace

SAP is commonly used by many companies worldwide. So knowing how to utilise SAP software can give you an edge when applying for jobs in other geographical locations or seeking a promotion within your current company. The following are a few popular industries and positions where SAP software is widely used, as well as the modules and capabilities of each.

HR management

SAP provides human resource managers with all of the tools they need to run an effective HR department. HR professionals can keep track of every detail about an employee, from the time they apply for the job up to the time they leave the company. Listed below are some examples of HR sub-modules:

  • Organisation management: This module involves workflow management and planning.

  • P**ersonnel administration:** This module handles the administrative task of recording important employee details such as hire date, personnel data and payroll accounting.

  • Personnel development: This module assists an HR manager in maintaining retention and reducing employee turnover, as well as developing employees' knowledge, qualification and productivity.

  • Time management: This module provides relevant information to the HR department about each employee's attendance, shifts, schedules and absence.

  • Payroll: This module displays and processes information regarding employee remuneration, both monetary and non-monetary, benefits and taxes.

Project management

SAP provides project managers with all of the tools to manage projects from start to finish. The following are a few examples of project management sub-modules:

  • Project initiation: The project initiation module includes everything related to project setup and launch, encompassing project definition, work breakdown structure, network activities, milestones and project creation.

  • Project planning: Cost planning, revenue planning, material planning, capacity planning, workforce planning and scheduling are all part of the planning modules.

  • Project execution: The project execution module includes all aspects of project monitoring and implementation such as goods receipt, goods issue, timesheet entry, service entry, billing, confirmations and progress analysis.

  • Project closure: The closure module contains information and data pertaining to period-end and project closure.

Warehouse management

SAP provides warehouse managers with almost everything they need to run a successful warehouse. Enhanced warehouse management capabilities in SAP include:

  • Inbound processing management: With data validation for shipping notifications, acceptance of production receipts and optimised receipt processing, the SAP's extended warehouse management module simplifies inbound processing.

  • Outbound processing management: Warehouse managers can use the outbound processing module to schedule packing and shipping activities, select stock based on attributes and use augmented reality picking features. This can result in quicker and more efficient outbound processes.

  • Storage and operations management: Thanks to the storage and operations module, warehouse managers can have complete control over the internal process, including cycle counting and physical inventories.

  • C**ross-functional management features:** Other cross-functional features of the extended warehouse management module include batch management, serial number management, dock appointment scheduling, traceability processing and cross-functional analytics.

Customer relationship management

SAP offers a customer relationship management (CRM) system that enables CRM professionals to automate and integrate all customer activities, which involve sales, marketing, customer service and commerce. Some functionalities of the CRM module include:

  • Sales CRM: An enhanced and more seamless customer experience can be achieved from features such as sales strategy content recommendations, AI-powered guided selling, individualised quotes, sales negotiation workspaces, real-time quota and plan modelling, dispute resolution management platforms and revenue, billing and invoice management in the sales CRM system.

  • Marketing CRM: Marketing professionals benefit from the marketing CRM system's features including unified customer profile access, customer behaviour analysis and insights, seamless customer experience creation, marketing campaign management, team collaboration, multi-dimensional analysis and target customer identification and targeting.

  • Customer service CRM: The customer service CRM system equips customer service representatives with everything they need to provide outstanding customer service. Customer insights, service interaction history, issue diagnosis optimisation, on-demand network connection, AI-assisted conversations and conversation transferring are among the features offered in this module.

  • Commerce CRM: The commerce CRM system provides employees with a thorough understanding of many commerce processes such as order management, component integration, industry-specific capabilities, transparent commerce processes and platform extension.

Finance management and accounting

SAP provides a comprehensive set of financial management and accounting frameworks that provide businesses with the tools they need to effectively manage their finances. Some examples of finance management systems include:

  • Financial planning and analysis: Strategic planning, forecasting, budgeting, performance management, analytics and reporting are all aided by this system. This automates the conventionally lengthy process of analysis, planning and projection.

  • Accounting and tax management: This system provides expert assistance pertaining to financial accounting and reconciliation, reporting, disclosure, compliance with regulations and closing process accounting, resulting in enhanced accuracy and faster processes.

  • Treasury and cash management: Corporate treasury management, cash management, cash flow forecasting, debt management, risk management and investment management are all included in this module.

  • Accounts payable and receivable: This module encompasses courses to help with credit evaluation, risk management, cash collections, dispute resolution and invoice management.

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