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SAP integration

All You Need to Know About SAP Integration

Today's advanced digital world opens many doors for you to optimize your business. One of the key factors to ensure your company's growth and stability is a centralized system where you can integrate all essential technologies and processes.

SAP integration technologies allow you to link over a thousand processes within your company, effectively restructuring your ever-changing business. SAP is currently one of the most utilized Enterprise Resource Planning (ERP) solutions as it enables firms across various industries to innovate critical functions.

Both SAP and non-SAP systems are integral for increasing profits, promoting employee productivity, and improving customer interaction. Planning and executing an overall system integration for your organization is challenging but necessary to ensure quality communication and service to customers, clients, and partners.

What is SAP?

Before deep diving on how SAP integration technologies can take your business to new heights, we must first know what exactly SAP is.

Systems, Applications, and Products (SAP) in data processing is an ERP software founded in 1972 by five former IBM employees in Mannheim, Germany. SAP is also the name of the German company (SAP SE) that develops the software currently being used in over 180 countries.

SAP’s goal is to smoothly manage business operations and customer relationships. With SAP, a company can maintain a centralized corporate database with a comprehensive range of features and applications that can be used in real-time. This database can be shared by all departments across the organization, customers, and even third-party partners. According to market insiders, approximately 77% of the money being transacted by international businesses go through a SAP ERP system.

Initially, SAP was a single software for all business operations. However, it eventually evolved and started focusing on individual processes to decrease the load on a single software, as well as to properly divide the work on the basis of field and expertise. SAP comes in different modules that virtually cover every aspect of business management, including the areas of finance, human resources, logistics, sales and distribution, project systems, and plant maintenance among others.

To better understand SAP, we must look at its basic three-tier, client-server architecture:

  • The presentation tier provides the user with a SAP graphical user interface (GUI), allowing a SAP ERP system and end-user to communicate with each other.

  • The application tier is essential in a SAP ERP system because it allows the operation of a wide range of activities, including processing transactions, running reports, monitoring access to the database, and connecting with other applications.

  • Finally, the database tier is where both businesses generated data and SAP application programs are stored. The performance of this tier determines the scalability of the entire SAP ERP system in place.

Why integrate SAP?

SAP integration standardizes business process flows and boosts customer satisfaction, which leads to higher revenues, stronger branding, storage of accurate data, and reduction of costs.

SAP integration technologies do not only streamline functions and processes, but it also ensures efficient information flows across SAP and non-SAP components; helps enforce financial, process, and legal controls; and facilitates the effective use of resources, such as manpower and machines.

Failure to properly integrate SAP and non-SAP applications can disrupt day-to-day functions within your company and cause inefficiencies across departments and external parties.

Several SAP integration and interface technologies work simultaneously to enable a well-organized system integration. Some of these technologies are the following:

  • Intermediate documents (IDOCs) that facilitate data exchange between SAP and non-SAP applications;

  • Business Application Programming Interface (BAPI) that allows transmission of data to the SAP ERP system through a two-way communication channel; and

  • SAP Java Connector (JCo) that enables the development of SAP-compatible components and applications in Java, and concurrently allows Java applications to communicate to any SAP systems.

Key features of SAP

In order to correctly identify the right SAP for your business, you have to be familiar with some of its key features which include:

  • An organization-wide integration that creates a common database. Medium- to large-sized companies typically have business functions and processes that need to be streamlined across different business units. With SAP, you can integrate these processes, as well as build a common database that will ensure unified definitions of data across all departments.

  • Real-time operations. One of the most important features of SAP is its timeliness that allows faster transactions and quick identification of problems that need to be corrected. Consider this scenario: a customer buys an office chair from an e-commerce store. With a SAP in place, the seller will be promptly notified of the order, and can quickly check if the chair is available from any supplier. Once a supplier confirms the availability of the chair, people from the distribution team will be informed, and they will then coordinate the delivery with the online store's partner courier. The buyer is also constantly updated on the status of the delivery.

  • Consistent look and feel. SAP should have a professionally-looking and consistent user interface to make it easier to use for both employees and customers.

Industry uses

SAP caters to the specific needs of various industries such as e-commerce, manufacturing, logistics, healthcare, security, and finance. One of the key advantages of SAP is that you can choose to avail only the modules that are necessary for your business. Whether you own a large corporation or a start-up firm, there is surely a SAP that will satisfy your needs.

Each market has a different niche, audience, and specifications. To appreciate more what SAP can do for your business, here are some of its uses across industries:

  • SAP integration with customer relationship management (CRM) applications. Customers are a significant part of any business and most companies synchronize customer information between their SAP ERP and CRM systems to boost processes' agility, including data sharing.

  • SAP integration with third-party purchase order systems. The integration between SAP and third-party purchase order systems is crucial because this allows the new purchase orders to be quickly transmitted and made available in the SAP ERP system.

  • SAP integration with supplier systems. This integration is commonly applied to e-commerce stores that boast of serving customers with just a few clicks from their desktops or mobile phones. As mentioned in the example earlier, once a purchase request is made on SAP, it is then linked to all possible suppliers who will give their respective quotes. These quotes will then be re-routed back to the SAP ERP system for further review and processing.

SAP integration is an essential investment for your business

It is true that SAP integration is costly because of the need to purchase essential hardware and software and pay for labor, external consultants, employee training, routine maintenance, and upgrades. It is, however, a worthy investment due to the enhancements and quality it can bring to your business.

Streamlining your SAP ERP system fast-tracks financial reporting, maximizes your business’ visibility and control, ensures compliance with regulatory requirements, as well as identifies and prevents risks.

Ultimately, SAP integration simplifies your organizations’ information technology (IT) infrastructure, and automates your core business functions, optimizing overall process flow for all your internal and external stakeholders. It also enhances customer relations and satisfaction through improved agility, efficient operations, and easy access to real-time data that you can quickly transform into new opportunities.