What is SAP ERP?

An Enterprise Resource Planning (ERP) system makes it possible for organizations to run within a single system their core processes for finance, manufacturing, human resources (HR), supply chain, services, procurement, and other key business functions.

What is SAP ERP?

An Enterprise Resource Planning (ERP) system makes it possible for organizations to run within a single system their core processes for finance, manufacturing, human resources (HR), supply chain, services, procurement, and other key business functions.

SAP ERP solutions are based on over 40 years of experience across all industries and business sizes. They leverage technology that is constantly updated to build ERP tools that can be constantly updated.

The first official SAP ERP solution was the introduction of mySAP ERP in 2004, although this was based on much of the functionality and experience SAP had gained with the SAP R/2 and SAP R/3 business application software suites. While the mySAP ERP solution was targeted at a smaller audience, SAP ERP Central Component (SAP ECC) was introduced in the same and provided all the core business processing capabilities along with data warehouse and enterprise management capabilities in a single system.

The most recent SAP ERP system, SAP S/4HANA, was introduced in 2015 and was a significant shift for SAP as it runs exclusively on the SAP HANA database. A software-as-a-service version of the solution, SAP S/4HANA Cloud, was introduced a year later in 2016. There is a new major release of the on-premise version of SAP S/4HANA each year, while the cloud editions are released quarterly. SAP has announced that they will end the mainstream maintenance and support of all ERP systems other than SAP S/4HANA at the end of 2027.

SAP started to shift their strategy in 2020 to focus more on the cloud-based software-as-a-service ERP system SAP S/4HANA Cloud. This has been done in conjunction with a shift in messaging toward cloud ERP. While most SAP ERP customers are still running older solutions such as SAP ECC, this focus on cloud ERP has been done in conjunction with RISE with SAP.

The biggest factors impacting organizations’ move to newer SAP ERP systems include the opportunity to re-engineer processes or correct configurations from an older system, the upcoming end of maintenance of existing ERP releases, and a desire to transform existing solutions and create a centralized model and structure.

SAP has many implementation partners that will assist organizations with either their initial SAP ERP deployment or a move to SAP S/4HANA from an earlier ERP release. These range from global solution service partners like CapgeminiCognizantDeloitte, and T-Systems to smaller partners like smartShift and SoftwareONE that offer solutions and software to help with migration, as well as partners specializing in the migration process itself like Lemongrass.

What Does SAP ERP Do?

An Enterprise Resource Planning (ERP) system makes it possible for organizations to run within a single system their core processes for finance, manufacturing, human resources (HR), supply chain, services, procurement, and other key business functions. SAP ERP solutions are based on over 40 years of experience across all industries and business sizes. They leverage technology that is constantly updated to build ERP tools that can be constantly updated.

By centralizing key functions like sales, security, analytics, and much more into one SAP system, an ERP can help provide a more interconnected experience for users and business leaders. Relying on an ERP can help standardize security measures, help boost sales performance, making the overall experience better for both users and customers.

Benefits of SAP ERP

SAP ERP systems offer significant benefits to their customers. These solutions are available to organizations of all types and sizes. One of the chief benefits is flexibility. SAP ERPs are easily customizable, both in terms of the applications themselves and how they connect and interact within a network overall. ERPs are available in public and private clouds, so users can have online access to the network from anywhere. They can also be used in on-premise only scenarios, offering users the option to keep their IT and security in-house. ERP systems from SAP centralize critical business functions like planning, analytics, and finance all in one place. This saves employees from significant manual work, allowing them to instead spend their time on more value-added tasks.

Types of SAP ERP Systems

Organizations range in size, operate in different industries, and may have unique business needs, so SAP offers several different ERP solutions to meet these challenges.

SAP’s flagship ERP solution is SAP S/4HANA. Released in 2015, this ERP solution runs exclusively on the SAP HANA database. It features modules like Asset Management, Finance, Human Resources, Manufacturing, R&D/Engineering, Sales, Service, Sourcing and Procurement, and Supply Chain. These modules all have different features and functions to meet the needs of their industry.

The full-scale ERP suite is used by companies of all different sizes and provides organizations with the flexibility to respond to shifting business environments. Recent versions of SAP S/4HANA now feature enhanced technological features like machine learning, automation, AI, and other capabilities.

The primary reason that organizations opt for SAP S/4HANA is its simplicity. The system standardizes and simplifies IT and business processes throughout organizations by acting as the core of the business. It can centralize data access from sources within other SAP systems and outside of SAP. This provides business leaders with end-to-end visibility, enhancing their decision-making capabilities.

SAP S/4HANA relies on SAP Fiori as its user interface, which makes interacting with the ERP system a more personalized and user-friendly experience.

SAP S/4HANA is not SAP’s only ERP offering. For smaller and midsize businesses, SAP offers Business One. Billed as a “a long-time favorite of smaller firms and subsidiaries of large enterprises” by SAP, SAP Business One also features cloud capabilities on a more affordable scale for businesses with fewer processes to oversee.

SAP also offers midsized firms a more specialized cloud-based ERP suite known as SAP Business ByDesign. Designed to meet the needs of organizations that are scaling rapidly, SAP Business ByDesign also connects core functions across the breadth of an enterprise.

Some organizations still run on SAP ECC 6.0, a legacy system that predates SAP S/4HANA as SAP’s flagship ERP. That ERP system is being phased out as SAP pushes organizations to complete the transition to SAP S/4HANA. Support and maintenance for the legacy SAP ECC ERP will come to an end in 2027, though SAP does offer users the option of using the SAP ECC 6.0 Enhancement Pack 8 through 2030. Yet to make the most out of an SAP ERP system and gain the benefits of flexibility and the full power of SAP HANA, it is recommended that companies make the switch to SAP S/4HANA.

Organizations should perform a self-evaluation and research the different possibilities to determine which SAP ERP benefits would bolster their enterprise processes the most.

Join SAPinsider Today
Join SAPinsider to access opportunities for networking and engagement in the dynamic SAP ecosystem. As a member, you will have access to a wealth of valuable resources and content tailored to SAP technologies and best practices like the latest research reports, articles, webinars, and events that will keep you informed and ahead of the curve.SAPinsider membership grants you exclusive access to in-depth analyses, expert insights, and practical guidance that will empower you to navigate the ever-evolving SAP landscape with ease. SAPinsider membership will enable you to remain one step ahead and harness the latest trends, innovations, and strategies to drive your own powerful digital transformations, optimize your SAP investments, and unlock business success.

306 results

  1. Cloud Solutions SAP S/4HANA Data Quality

    5 Trends That Will Drive Data Quality in 2025

    Reading time: 3 mins

    As businesses increasingly prioritize data-driven strategies, a recent Collibra webinar highlighted five key trends for 2025 aimed at enhancing data quality, including the need for accurate AI analytics, maintaining quality in data products, ensuring audit-ready reporting, addressing data quality during cloud migrations, and implementing holistic governance.

  2. arial view over Fairlight, New South Wales, Australia | SAP Australia secures $52m NSW government cloud migration deal

    SAP Australia secures $52m NSW government cloud migration deal

    Reading time: 2 mins

    SAP Australia has been tasked with helping New South Wales transition several platforms from on-premises infrastructure to the cloud.

  3. Integration with Boomi

    Bridging the Gap: How Onibex One Connect helps in Data Warehouse Modernization

    Reading time: 3 mins

    Organizations are increasingly prioritizing seamless data movement and modernizing their data warehouses with cloud solutions like Snowflake and Databricks, utilizing tools like Onibex’s One Connect for efficient integration and real-time analytics.

  4. NTT DATA Business Solutions Supply chain

    Building Supply Chain Resilience for Manufacturing with NTT DATA Business Solutions

    Reading time: 3 mins

    Mid-sized manufacturing companies face supply chain challenges that hinder revenue growth, prompting strategies such as improved forecasting, optimized supply chains, and adoption of service-based models, all supported by digital transformation to enhance data accuracy and operational efficiency.

  5. The Role of Tax and Compliance In Your SAP Transformation Strategy

    Reading time: 1 min

    This guide offers answers to common customer questions about SAP transformations to help navigate ERP and tax engine implementations. Membership Required You must be a member to access this content.View Membership LevelsAlready a member? Log in here

  6. PwC's Cloud Foundation Services

    Critical Steps to Safeguard Enterprise Data Integrity with Tricentis

    Reading time: 3 mins

    SAPinsider research reveals that 83% of organizations prioritize data storage and protection for SAP system deployments, with many seeking partners like Tricentis to ensure data quality during migrations amid challenges like poor data quality and excess data sources.

  7. How Gong centralized its automation efforts to realize huge efficiency gains

    A comprehensive video tutorial on the Order-to-Cash (O2C) process in SAP ERP, detailing the steps from sales order creation to payment collection, and illustrating the integration of SAP modules like Sales and Distribution, Materials Management, and Finance for efficient business management.

  8. Onibex Live Webinar – DATAVERSE: Unlock the Potential of your SAP Data in Motion

    The article discusses a webinar on transforming business environments through modern data architecture, highlighting Confluent’s capabilities in streaming analytics, integration with SAP ERP, and the benefits of a centralized nervous system for reducing risk and time in organizations.

  9. AI for Digital supply chains Tariffs with Zilliant

    Harnessing the Power of AI for Digital Supply Chains

    Reading time: 3 mins

    In today’s complex environment, supply chain professionals prioritize building resilience by leveraging AI and advanced analytics, with companies like Microsoft and SAP showcasing effective applications that enhance logistics, inventory management, and operational efficiency.

  10. T-Systems SAP S/4HANA

    4 Steps to the Cloud: How T-Systems Simplifies the SAP S/4HANA Journey

    Reading time: 2 mins

    Organizations are increasingly transitioning to cloud solutions like SAP S/4HANA, supported by partners like T-Systems, to enhance cost efficiency, flexibility, and innovation while driving digital transformation through integrated, managed services and continuous improvement strategies.