SAP AG (pronounced ess-aye-pea aye-gee) is based in Walldorf, Germany and is the world's largest enterprise software company. SAP's foundation is built upon the concepts of specialization and integration. That is, each component or product within the SAP family of products and services meets a particular need, like providing web-based access to other SAP systems, addressing product lifecycle planning requirements (SAP PLM), supporting internal company procurement (SAP Enterprise Buyer), interconnecting different systems to ease integration headaches (SAP Exchange Infrastructure), and so on. Many of these components are explained in subsequent hours; suffice it to say here that there are many components, many products, and therefore many potential SAP solutions.

Each product can typically be broken down further into modulesportions of functionality that are more discrete in nature, geared toward addressing a particular piece of the overall component pie. For instance, SAP R/3 and its successor, SAP ERP Central Component (ECC), are comprised of modules like Financials, Sales & Distribution, Materials Management, Warehouse Management, and so on. Individually, each of these modules effectively serves to manage a business area or functional area for which a particular company department often is responsible.

Looking at it from another perspective, individual SAP modules combine to form an SAP component, application, or product. Within a particular module or component, a company's business processes are configured. SAP is well known for reflecting industry's best practices for the different business processes that it supports. By adopting proven best practices, companies grow more efficient serving their customers, constituents, and other stakeholders. Within ECC, for example, you can configure something as complex as an "order to cash" business process, or something as simple as a "credit check" transaction. Many business processes only require a few different modules within the component; others touch many more, however, underscoring the importance of the integration SAP provides.

However, to gain even better business visibility into trends and to maximize revenue and profit, it is becoming increasingly common to extend business processes like "order to cash" so that they inevitably touch multiple components. These so-called cross-application business processes might start by accessing ECC or perhaps SAP's Enterprise Portal, and then transfer control to another component such as SAP's Customer Relationship Management (CRM) product to determine customer-buying trends. CRM's business logic might essentially direct or influence the business process in a particular way, seeking to ultimately increase order size or gross margin. Next, SAP's Advanced Planner and Optimizer (APO) system might be accessed to revise a supply chain planning process for a set of potential orders, looking to optimize profitability as the system seeks to balance the needs of many different customers with the organization's access to materials, people, and other resources. Finally, SAP's Business Warehouse (BW) might be queried to pull historical data relevant to the financial terms at hand (so as to offer the best financial terms and discount strategy for this particular customer, for example, given his payment history). After these details are analyzed, control can be turned back over to ECC or Enterprise Portal to track warehousing, drive the pick-list process, manage shipping data and the A/R process, and at some point place the final closing touches on the cross-application business process.

Through all this, take note of the common threadSAP's products are used to satisfy the needs of enterprises, big and small, enabling an enterprise to tend to the business of running a business. After all, every enterprise needs to manage its inventories, generate and track sales, deliver services, maximize revenue, optimize its supply chains, and so on. SAP and its enterprise application competitorsOracle and to a lesser extent Microsoftenable this capability on a grand scale, integrating many otherwise discrete functions under a single umbrella. This way, the company (by way of the system's user community) gains greater visibility into how it is conducting business and how it might do so more economically, rapidly, and profitably.

Evolution of SAP AG

Before you go any further, a quick history lesson is in order. SAP AG was founded in 1972 in Mannheim, Germany by a group of ex-IBM engineers with a great idea that fell on deaf ears internally. The five original engineers who developed the concepts ultimately embraced by SAP originally named their company Systemanalyse und Programmentwicklung. Their goal was to develop a software package that integrated a company's myriad business functions in a manner that reflected best practices. Their idea grew into what soon became Systems, Applications, and Products in Data Processing (SAP).

From day one, SAP was designed to be a global software product engineered on a multilingual and multinational platform. Additionally, the engineers from IBM wanted to break away from the monolithic architecture model that defined mainframes and their applications of the daythey wanted to open the doors to a variety of hardware, operating system, and database platforms, thereby giving SAP's customers flexibility and choice. These revolutionary and innovative design features are what made SAP Germany's top software vendor only a few short years after its core product hit the marketplace.

SAP AG Today

Today, SAP AG reigns as the undisputed market leader in Enterprise Applications software. SAP is listed on the New York Stock Exchange (NYSE) under the symbol SAP. SAP AG offers comprehensive industry solutions atop their flagship R/3 and ECC products (so as to afford access to industry-specific best practices and processes), among these SAP Aerospace & Defense, SAP Automotive, SAP Banking, SAP Chemicals, SAP Consumer Products, SAP Engineering & Construction, SAP Healthcare, SAP High Tech, SAP Insurance, SAP Media, SAP Oil & Gas, SAP Pharmaceuticals, SAP Public Sector, SAP Retail, SAP Service Provider, SAP Telecommunications, SAP Utilities, and othersnearly 30 industries are addressed by these solution sets.