What Is SAP – Systems Applications and Products in Data Processing

SAP is the acronym for Systems Applications and Products in data processing. It’s very widely used across industries because of its flexibility and highest data integrity.

It’s originally introduced in 1980 by SAP AG (German based company) as SAP R/2. In 1992 they introduced client-server based system and named it SAP R/3. In 2004 they launched mySAP ERP which is now called SAP ECC (ECC stands for ERP Central Component). 

What Is SAP - Systems Applications and Products in Data ProcessingThe journey started in 1972 by five German engineers. Now SAP AG is the world’s largest business software provider and the third largest independent software manufacturer. It’s operating out of walldorf, Germany. For last one decade it has dominated the entire ERP market because of the product’s flexibility and user friendly ness.

It got different modules based on the function it provides and the technical integration it has with other modules.

What is SAP FICO

FICO stands for financial accounting and controlling modules. Both modules are used for external reporting and internal reporting purpose. All the financial activities are carried on in FICO. It has two parts;

  • Financial Accounting (FI)
  • Controlling (CO)

What is SAP FI Module

FI Stands for Financial Accounting Module which is required for our external and legal reporting purpose. By FI module you enter all the financial transactions which in turn transferred to a profit and loss account and balance sheet. At the period end you can close your financial accounting book by using this module and prepare your financial statements for the fiscal year. It’s very flexible to use. You can define any type of report through the help of an ABAP consultant. The module has so many standard reports which are also a great use.

What is SAP CO Module

CO stands for controlling module. We use this module for internal reporting purpose. CO module has different sub module within it and by using the sub module it collects all cost related to different processes and products through cost center and uses it to provide in a form of report to management. Cost center accounting collects cost from various modules like financial accounting and pass on it to the product to get its cost. We can derive segment wise profitability by using another sub module of CO module called Profitability analysis (COPA).

What is SAP Audit

Sap audit is carried on in an organization to check the security and data integrity aspects. Security is the major concern of a business organization which are taken care in Audit. As a part of audit you should check segregation of duties and access control mechanism. There should be proper delegation of duties. Super user access must be with the business process owner. It should not be with the daily end users.

As a part of audit following things should be considered as most important;

  • Ensure access to servers, terminal and data center to prevent tampering
  • Proper controls should be in place for data processing.
  • Ensure that the duties are properly defined and segregated.
  • User profile and access control must be define properly
  • Changes to the production environment must be documented

What is SAP ABAP

ABAP stands for Advanced Business Application Programming. SAP product is coded in ABAP language. Any new development to this product should be done with ABAP.

What is SAP Basis

Basis is related to the Project Database Administration and other technical stuff except ABAP.

What is SAP SD Module

SD module stands for sales and distribution module. It consists of all the master data creation, sales and distribution related configuration, and transactions to carry on the order to cash process. Sales and distribution module (SD module) has following transactions to carry on;

  • Customer master data related to SD module (Actually created in FI module)
  • Sales order creation
  • Shipping/ deliveries
  • Pricing structure
  • Billing
  • Customer Credit management

What is SAP MM Module

MM stands for Material Management module. MM modules take care of followings;

  • Material Master creation
  • Vendor Master Data creation related to MM module
  • Consumption planning
  • Transactions related to purchase
  • Inventory management
  • Material Valuation
  • Goods received or inventory management
  • Invoice Verification

What is SAP PP Module

PP module stands for production planning. PP Module consists of followings;

  • Sales plan and production plan
  • Creation of Bill of material (BOM)
  • Creation of routing
  • Creation of work center
  • Long term planning
  • Demand management
  • Material requirement planning
  • Production order creation
  • Planned order creation

There are other modules which are used across industry. But the above modules are the mainly used in an organization.

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