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SAP R/3 is the former name of the main enterprise resource planning software produced by SAP AG. It is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing.[1]

History of SAP R/3

The first version of SAP's flagship enterprise software was a financial Accounting system named R/1 called as YSR. This was replaced by R/2 at the end of the 1970s. SAP R/2 was in a mainframe based business application software suite that was very successful in the 1980s and early 1990s. It was particularly popular with large multinational European companies who required soft-real-time business applications, with multi-currency and multi-language capabilities built in. With the advent of distributed client–server computing SAP AG brought out a client–server version of the software called SAP R/3 (The "R" was for "Real-time data processing" and 3 was for 3-tier). This new architecture is compatible with multiple platforms and operating systems, such as or UNIX. This opened up SAP to a whole new customer base.

SAP R/3 was officially launched on 6 July 1992. It was renamed SAP ERP and later again renamed ECC (ERP Central Component). SAP came to dominate the large business applications market over the next 10 years. SAP ECC 5.0 ERP is the successor of SAP R/3 4.70. The newest version of the suite is SAP ERP 6.0 – the path to SAP Business Suite 7.

Releases

• SAP R/3 Release 3.0A Release Date 6 July 1992 • SAP R/3 Release 4.0B Release Date June 1998 • SAP R/3 Release 4.5B Release Date March 1999 • SAP R/3 Release 4.6A Release Date 1999 • SAP R/3 Release 4.6B Release Date Dec 1999 • SAP R/3 Release 4.6C Release Date April 2001 • SAP R/3 Enterprise Release 4.70 Release Date March- Dec 2003[2] • SAP R/3 Enterprise Edition 4.7 • SAP R/3 Enterprise Central Component 5.0 • SAP R/3 Enterprise Central Component 6.0

Organization

SAP R/3 was arranged into distinct functional modules, covering the typical functions in place in an organization. The most widely used modules were Financial s and Controlling (FICO), Human Resources (HR), (MM), Sales & Distribution (SD), and Production Planning (PP)[citation needed].

Each module handled specific business tasks on its own, but was linked to the others where applicable. For instance, an invoice from the billing transaction of Sales & Distribution would pass through to accounting, where it will appear in accounts receivable and cost of goods sold.

SAP typically focused on best practice methodologies for driving its software processes, but more recently expanded into vertical markets. In these situations, SAP produced specialized modules (referred to as IS or Industry Specific) geared toward a particular market segment, such as utilities or retail.

Technology

SAP based the architecture of R/3 on a three-tier client/server

1. Presentation Server(GUI) 2. Application Server 3. Database Server

SAP allows the IT supported processing of a multitude of tasks, accruing in a typical company or bank. SAP ERP is differing from R/3 mainly because it is based on SAP NetWeaver: core components can be implemented in ABAP and in Java and new functional areas are mostly no longer created as part of the previous ERP system, with closely interconnected constituents, but as self-contained components or even systems.

Application Server

An application server is a collection of executable s that collectively interpret the ABAP/4 (Advanced Business Application Programming / 4th Generation) programs and manage the input and output for them. When an application server is started, these executable s all start at the same time. When an application server is stopped, they all shut down together. The number of processes that start up when you bring up the application server is defined in a single configuration file called the application server profile. Each application server has a profile that specifies its characteristics when it starts up and while it is running. For example, an application server profile specifies:

• Number of processes and their types • Amount of memory each process may use • Length of time a user is inactive before being automatically logged off.

The Application layer consists of one or more application servers and a message server. Each application server contains a set of services used to run the R/3 system. Not practical, only one application server is needed to run an R/3 system. But in practice, the services are distributed across more than one application server. This means that not all application servers will provide the full range of services. The message server is responsible for communication between the application servers. It passes requests from one application server to another within the system. It also contains information about application server groups and the current load balancing within them. It uses this information to choose an appropriate server when a user logs onto the system.

The application server exists to interpret ABAP/4 programs, and they only run there-the programs do not run on the presentation server. An ABAP/4 program can start an executable on the presentation server, but an ABAP/4 program cannot execute there. If your ABAP/4 program requests information from the database, the application server will format the request and send it to the database server.cvb.

Database Server

The database server handles the user's request for addition, retrieval and modifications in the data.

Security

Server-to-server communications can be encrypted with the SAP cryptographic library.[3] However, the SAP cryptographic library does not cover client-to-server encrypted communications; an external technology covering Secure Network Communications and Secure Socket Layer would have to be provided[4]

SAP NetWeaver is SAP's integrated technology platform and is the technical foundation for all SAP applications since the SAP Business Suite. SAP NetWeaver is marketed as a service- oriented application and integration platform. SAP NetWeaver provides the development and runtime environment for SAP applications and can be used for custom development and integration with other applications and systems. SAP NetWeaver is built using open standards and industry de facto standards and can be extended with, and interoperate with, technologies such as Microsoft .NET, Oracle Java EE, and IBM WebSphere.

SAP NetWeaver's release is considered as a strategic move by SAP for driving enterprises to run their business on a single, integrated platform that includes both applications and technology. Industry analysts refer to this type of integrated platform offering as an "applistructure" (applications + infrastructure). According to SAP, this approach is driven by industry's need to lower IT costs through an enterprise architecture that is at once (1) more flexible; (2) better integrated with applications; (3) built on open standards to ensure future interoperability and broad integration; and, (4) provided by a vendor that is financially viable for the long term.[1]

SAP is fostering relationships with system integrators and independent software vendors, many of the latter becoming "Powered by SAP NetWeaver". SAP NetWeaver is part of SAP's plan to transition to a more open, service-oriented architecture and to deliver the technical foundation of its applications on a single, integrated platform and common release cycle.

Development Tools

• ABAP Workbench (SE80) • SAP NetWeaver Developer Studio (NWDS) based on Eclipse for most of the Java part of the technology (Web Dynpro for Java, JEE, Java Dictionary, Portal Applications etc.) • SAP Netweaver Development Infrastructure (NWDI) • Visual Composer

Features

• SOAP and Web Services • Interoperability with Java EE • Interoperability with .NET (Microsoft) • Integration of Business Intelligence • xApps • Duet

Specifically, ERP is being extended by Management Systems (BPMs) and, as BPMs takes hold as the pre-dominant technical platform for new applications, expect to see radical changes to ERP architecture in the years ahead. The technology has been applied to a wide range of industries and applications.

SAP's Netweaver platform is still backwards-compatible with ABAP, SAP's custom development language.

The SAP ERP application is an integrated enterprise resource planning (ERP) software manufactured by SAP AG that targets business software requirements of midsize and large organizations in all industries and sectors. It allows for open communication within and between all company functions.

Overview

SAP AG was founded by five former IBM employees in 1972 who wanted to create a real-time business data system. The first name chosen for the company was not Systeme, Anwendungen und Produkte in der Datenverarbeitung (German for "Systems, Applications and Products" or the acronym SAP) but originally Systemanalyse und Programmentwicklung (in English, "Systems analysis and program development").[1] It uses the concept of modules (individual programs that can be purchased, installed, and run separately, but that all extract data from the common database).[2] SAP AG, the company that provides the enterprise resource planning solution has upgraded the package and launched it as SAP ERP Central Component (ECC) 6.0 in 2005. The purpose of positioning it as ECC is to enable SAP to build and develop an environment of other products that can function upon the foundation of the central component.

SAP's ERP solution includes several modules that support key functional areas, including:

• SAP ERP Financials • SAP ERP Operations • SAP ERP Human Capital Management

Development

SAP R/3 through version 4.6c consisted of various applications on top of SAP Basis, SAP's set of middleware programs and tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the SAP Web Application Server. Extension sets were used to deliver new features and keep the core as stable as possible. The Web Application Server contained all the capabilities of SAP Basis.

As a result of marketing changes and changes in the industry, other versions of SAP have been released that address these changes. The first edition of mySAP ERP was launched in 2003 and bundled previously separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM) and extension sets. The SAP Web Application Server was wrapped into NetWeaver, which was also introduced in 2003.

A complete architecture change took place with the introduction of mySAP ERP edition 2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC). The SAP Business Warehouse, SAP Strategic Enterprise Management and Internet Transaction Server were also merged into SAP ECC, allowing users to run them under one instance. Architectural changes were also made to support an enterprise services architecture to transition customers to a services-oriented architecture.

Implementation

SAP ERP consists of several modules including: utilities for marketing and sales, field service, product design and development, production and inventory control, human resources, finance and accounting. SAP ERP collects and combines data from the separate modules to provide the company or organization with enterprise resource planning.

Although there can be major benefits for customers of SAP ERP, the implementation and training costs are expensive. Many companies experience problems when implementing SAP ERP software, such as: failing to specify their operation objectives, absence of a strong commitment or positive approach to change, failing to deal with organizational differences, failing to plan the change to SAP ERP properly, inadequate testing. All these factors can mean the difference between having a successful implementation of SAP ERP or an unsuccessful one. If SAP ERP is implemented correctly an enterprise can go from its old calculations system to a fully integrated software package. Potential benefits include: efficient business process, inventory reduction, and lead time reduction.

Deployment and maintenance costs

SAP ERP systems effectively implemented can have cost benefits. Integration is the key in this process. "Generally, a company's level of data integration is highest when the company uses one vendor to supply all of its modules." An out-of-box software package has some level of integration but it depends on the expertise of the company to install the system and how the package allows the users to integrate the different modules.[2]

It is estimated that "for a Fortune 500 company, software, hardware, and consulting costs can easily exceed $100 million (around $50 million to $500 million). Large companies can also spend $50 million to $100 million on upgrades. Full implementation of all modules can take years," which also adds to the end price. Midsized companies (fewer than 1,000 employees) are more likely to spend around $10 million to $20 million at most, and small companies are not likely to have the need for a fully integrated SAP ERP system unless they have the likelihood of becoming midsized and then the same data applies as would a midsized company.[2] Independent studies have shown that deployment and maintenance costs of a SAP solution can greatly vary depending on the organization. For example, some point out that because of the rigid model imposed by SAP tools, a lot of customization code to adapt to the business process may have to be developed and maintained.[3] Some others pointed out that a return on investment could only be obtained when there was both a sufficient number of users and sufficient frequency of use[4][5] Deploying SAP itself can also involve a lot of time and resources.[6]

Security

Communications

SAP systems - including client systems - communicate with each other using SAP-specific protocols (e.g., RFC and DIAG) and the http and https protocols. These systems do not have encrypted communications out of the box; however, SAP does provide a free toolkit for server- to-server communications[7] For client to server encrypted communications (e.g., Secure Network Communications and Secure Socket Layer), companies must use 3rd party technology.[8] ERP advantages and disadvantages

Advantages

• Allows easier global integration (barriers of currency exchange rates, language, and culture can be bridged automatically) • Updates only need to be done once to be implemented company-wide • Provides real-time information, reducing the possibility of redundancy errors • May create a more efficient work environment for employees[2] • Vendors have past knowledge and expertise on how to best build and implement a system

Disadvantages

• Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high • Inflexibility - vendor packages may not fit a company's business model well and customization can be expensive • Return on Investment may take too long to be profitable • Implementations have a risk of project failure[2]

List of ERP softwares

ERP Developer Language Base License Other Info Package Country started as a fork of Java GPL Spain PHP, MySQL, BlueErp GPL PostgreSQL Compiere Java GPL/Commercial US, France, ERP/CRM for SME, PHP, MySQL, Belgium, GPL freelancers or PostgreSQL Spain, India, foundations Argentina... Brazil, France, Python, Zope, ERP5 GPL based on unified model Germany, MySQL Japan Sénégal Ideal for Retail, India, United Distribution, Python, MySQL, States, Africa, ERPNext GPL Manufacturing and WNFramework Singapore, Sri Services. Available as a Lanka, UAE hosted solution Fedena Ruby Apache License ERP for India Schools/Universities GNU Python GPLv3 Enterprise ERP for small and Austria, HeliumV Java AGPL medium businesses Germany JFire Java LGPL Java Foundation LedgerSMB Perl GPL ERP for small and OFBiz Apache, Java Apache License 2.0 medium businesses Openbravo Public License (OBPL), a free Openbravo Java software license based Spain on the Mozilla Public License (MPL) Python, GPL, OpenERP Public Belgium, India, OpenERP formerly Tiny ERP PostgreSQL License USA Opentaps Java C++, JavaScript, Produced by XTuple, CPAL PostgreSQL uses Qt framework Perl, SQL-Ledger GPL PostgreSQL started as a fork of Python GPLv3 OpenERP WebERP PHP, MySQL GPLv2 LAMP based system ERP vendors

Market share 2005 according to Gartner Dataquest[1] Revenue Market share # Vendor (million $) (%) 1 SAP 1949 30.33 2 1374 21.38 3 The Sage Group 1121 17.44 4 Microsoft Dynamics 916 14.25 5 SSA Global Technologies [2] 464 7.22

Vendors of popular ERP software (total revenue for the whole company):

Revenue[3] Revenue[4] Vendor Year (Native currency) (million $) SAP 9.4 billion EUR 12401.4 2006 Oracle Applications 14.38 billion USD 14380.0 2006 Infor Global Solutions 2.1 billion USD 2100.0 2006 The Sage Group 935.6 million GBP 1832.0 2006 Microsoft 44.3 billion USD 44282.0 2006 Unit 4 Agresso 352.6 million EUR 465.2 2005 CDC Software 409.1 million USD 409.1 2008 Lawson Software 390.776 million USD 390.8 2006 Epicor 384.1 million USD 384.1 2006 Visma 1,907 million NOK 305.5 2005 Industrial and Financial Systems (IFS) 341 million USD 341.0 2009 Comarch 730 million PLN 253.2 2009 QAD 225 million USD 225.0 2006 Cincom Systems 180 million USD 180 2008 COA Solutions Ltd 50.5 million GBP 98.47 2007 NetSuite 193.1 million USD 193.1 2010 ABAS Software 45 million EUR 62.6 2006 Ramco Systems 2,648 million INR 60.1 2006 SIV.AG 14.2 million EUR 18.7 unknown Technology One 108.8 million AUD 101 2008 Pronto Software 51.1 million AUD 54.9 2008 Plex Systems 22 million USD 22 2006 CMiC N/A (Private) USD N/A (Private) 1974 Syspro N/A (Private) USD N/A (Private) 2006 Openbravo N/A (Private) USD N/A (Private) 2010 OpenERP N/A (Private) USD N/A (Private) 2010 Dolibarr N/A (Private) USD N/A (Private) 2010 ProfitKey International N/A (Private) USD N/A (Private) 1979 Global Shop Solutions N/A (Private) USD N/A (Private) 1976 WorkBook Software A/S N/A (Private) DKK N/A (Private) 2000