Systems application product

BACKGROUND

SAP was founded by former five IBM engineers named; Quietmar Hopp, Hasso Plattner, Klaus Besier, Claus Wellenrenther and Hans-wemer Hector in Manheim Germany. It was formerly known as system analyse under programmentwicklung. The acronomy later changed to stand for system application and product in data processing. In 1976 SAP GMBH was founded and its headquarters were moved to Waldorf and since the 2005 annual general meeting the company's official name is SAP AG which is the largest software vendor running on IBM mainframe computers and is an emerging leader in software packages for clients/servers environment. Heaning Hagerman became the sole CEO of SAP in 2003.

EXPLAINING THE CONCEPT

SAP is a database driven enterprise integration software that incorporates all aspects of working business and that is why such software is referred to as enterprise integration software. Enterprise integration facilitates communication from one department or business level to another, increasing data flow within a company and makes sure that its supply chain has a direct, positive effect on company's productivity .It also improves customer service and product quality, decreases product time to market and create more efficient inventory levels.

The software modules are integrated so they can automatically share data between them and they have their own common database management system. The programs come in nine foreign languages used in major Western countries. Specific versions are tailored to accommodate different currencies, tax laws and accounting practices and this flexibility makes it one of the key selling points. Managers can generate reports in their own local languages and currencies yet have the same reports generated in the language and currency that are used as corporate standard by top management.

SAP software develops standard application products for real-time processing. The use of this package makes it possible to track and manage real time processes, sales, production, finance accounting and human resources in an enterprise. SAP software has been traditionally involved in helping customers modernize the back office operations by integrating business processes, mostly with its standard enterprise resource planning (ERP) solution called SAP R/3. The traditional SAP R/3 system first focused on getting their in-house business processes under control and integrated. It offers transactions reporting functionality in modules that can be categorized in areas of finance, logistics and human resources application enabling the exchange of data between companies's various business units. Each of these modules consists of multiple sub-modules e.g. Logistics includes general logistic, material management, plant maintenance and production. The modules are available on the installation media and each business is free to decide what modules should be implemented.

HOW IT WORKS

The SAP software has developed R/3 to take advantage of open system with client/server architecture it began promoting the package as a platform for business re-engineering. R/3 is an integrated client/server, distributed system with a graphical user interface that runs on smaller and cheaper hardware than R/2.The back end server and front end client portion of R/3 can run a number of different operating systems including different variations of UNIX, digital equipment corporation, VAX/VMS operating system and Hewlett Packard MPE operating system. It offers a number of options for its graphical user interface as Microsoft Window under Dos. The user does not have to shut down one application to move to another, they can just click on a menu choice. The R/3 provides word processing, filling system, Electronic mail and other office support function.

It can be configured to run single hardware platforms, or it can be partitioned to run separate machines in whatever combination users choose in order to minimize network traffics and place data where users need it the most. A central data dictionary keeps track of data and its location to maintain the integrity of distributed data. It uses R/3 to run a general ledger application on its IBM RS/6000 UNIX workstation.

Companies prefers R/3 because it support the company's goal of creating a distributed computing environment that gives each branch more data and processing power and integrates its application and branches to a greater extent than before. Companies use handheld barcode scanning guns which control inventory levels in the warehouse. Each physical box or drums of the company's product has a barcode label stuck on it, which describes the product i.eproduct number, manufacture date, and batch number.

HOW CONCO LTD. USES THE SAP SOFTWARE

Conco Ltd. is a company situated at Matsapha industrial site in Swaziland, it has its headquarters in the Republic of South Africa. Conco Ltd manufactures soft drink concentrates at a plant that supplies several other African countries, uses the SAP Software for performing business functions; making this project a major export commodity. It has a large warehouse to embrace all of its raw materials and finished products ready to be sold .The company identified its needs and bought the SAP Software and other compatible computer system to allow easy access of information and also to manipulate other business operations, because it believes that no other available package can handle its global business needs. The company has been using the SAP Software for quite sometime now from August 2005. It was purchased because a need for an integrated ERP system, which would allow purchases, sales and general ledger to be in one software package.

The software aids the company with real time financial and inventory information. The seamless integration of the various modules (financials, logistics and human resources) ensures consistency of business information. The SAP software helps Conco Ltd to service customers effectively and efficiently because they are able to customize manufacturing, shipping and suit the individual's needs. The software makes the updating of information quicker and much easier. The company is able to integrate its modules, trace transactions, do reports and solve queries through the SAP software package.

SAP financials is vital for the company's management of money and its survival. The financial function includes financial and management accounting and reporting, as well as integrated accounts receivables and payables. SAP-ERP gives the organization the flexibility to report performance by business units, organization or cost center. This also helps improves corporate performance as it provides the foundation to quickly read, evaluate and respond to changing business conditions with accurate, reconcile and timely financial data.

SAP logistic modules manage all processes involved in the internal supply chain, from raw materials procurement to final customer delivery and billing. The functions interact virtually from financial to human resources. It also comprises of all activities from material acquisition (purchasing), and control (inventory warehousing).

SAP human resource includes business processes for personnel administration (applicants screening, payroll and travel expenses) and personal developments (workforce planning, seminar management).

In Conco Ltd. the implementation of the package took a period of one year. Most of the time was spent gathering master data required, by using the internet and magazines, and other sources of information. There was also a need to train end users so that they can be fully equipped on how they are going to use the software in their company, for example a user can enter a purchases order in SAP R/3 material management and display a list from a business information warehouse without having to perform separate logons to each system. Costs incurred when acquiring the software were huge since the software itself is expensive.

DRAWBACKS

SAP Software has a number of drawbacks in Swaziland as it is a developing country. First and foremost is the lack of management information systems professionals. SAP software planning, implementation and maintenance require some kind of expertise, which is very scarce in the country because people are not eager to learn more. A majority of the population has little or no training or even no personal experience with computer system and this is so because the education system in the country is not up to standard

The second aspect in terms of resources concerning SAP software, the country's majority of businesses do not afford computer software's and hardware's to conduct businesses. Generally SAP software is associated with high cost of purchase, implementation and maintenance. This SAP software package itself is very expensive. High cost are also incurred in purchasing of leased lines and training end users so that they have knowledge skills to manipulate business operations using the SAP software

Another setback is that the software is transaction intensive therefore it is only suitable for very large corporations .This means that the software offers transactions and reporting functionality in modules that can be categorized in areas of financials, logistics and human resources and etc. It also involves a lot of business process re-engineering so a company should be willing to embrace change. It comes as an integrated package that incorporates all aspects of the working business.

The fourth aspect of the drawback is that experts in SAP software are in short supply; it can take 16 weeks of training to get end users up to speed on software, which is far too long. A reason for the shortage of SAP consultants is that it can take years for even experienced technologist to understand all methodologies of SAP software. The perception is that SAP experts who know the financial accounting module cannot correct a bug in sales and distribution module.

Last but not least the intricate and sophisticated features of SAP deeply affect the infrastructure of corporations, installing two or more SAP modules with all the business alterations that are required can easily take from one to three years. It has lagged in product support. The drawback in this aspect is that the installation process takes too long.

Conco Ltd has an ERP system tailored to accommodate different currencies, this can be a setback on the company because it has to take into consideration the exchange rates of the countries to which it sells it product to, these transactions can be manipulated in the accounts receivables .This means more work for the company.

REFERENCES

  • Schultheis R. and Summer M.,Management Information Systems: The Managers View McGraw- Hill (1998).
  • www.wikipedea.org
  • www.ejisdc.org
  • N. Mndzebele, Business information Systems 2 (IDE-BA 318), Matsapha (University of Swaziland) Conco Ltd.
  • www.sap.com
Member Contribution

We worked as a team, visited Standard bank, MTN headquarters, visited FNB IT department (Manzini) and Conco ltd. We also researched on the internet.

  1. Dlamini Sbongile T.
  2. I rearranged and summarized the information on drawbacks.

  3. Dlamini Temphilo X.
  4. I rearranged and summarized the information on the background and explaining the concept.

  5. Nxumalo Samkelisiwe D
  6. I typed the whole assignment and proof read and made corrections.

  7. Simelane Njabulo
  8. I rearranged and summarized information about how Conco Ltd uses the SAP software.

  9. Zwane Mpilo
  10. I rearranged and summarized the information on how the SAP software works

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