What is SAP? An Overview


Beginners in the SAP ecosystem are often confused about the various terms and concepts that the word “SAP” is used for. If you want to know what the various meanings of “SAP” are and have asked yourself the question “What is SAP” before, continue reading.

1. SAP Is a Software Company

SAP is, first of all, a software maker based in the town of Walldorf in southwest Germany. It was founded, among others, by Dietmar Hopp and Hasso Plattner in 1972 as “SAP Systemanalyse und Programmentwicklung”, which, as the company history website tells us, stands for “System Analysis and Program Development”.

SAP’s foundation was based upon the vision of “real-time” business administration software – in clear opposition to existing management software at the time, which did not allow users to immediately see data they entered, but relied on nightly processing and batch runs to deliver results.

SAP’s first product was RF (“Realtime Financials”), which later evolved into SAP R/1 together with other modules such as RM (“Realtime Material Management” – predecessor of todays MM module) and RV, the the predecessor of today’s SD and LE modules. In 1981, SAP released R/2, and ten years later, R/3, the SAP system known today as SAP ERP. In 2000, SAP become the world’s biggest business software provider, a position that it still holds today.

2. SAP Is ERP Software

SAP R/3, or, as it is more broadly known by now, SAP ERP, is extremely widespread and commonplace in many large organizations today. This is why the term “SAP” is often used synonymously with that system. So if you ask a colleague “What is SAP?”, the answer might often refer to the SAP system itself instead of the company.

SAP ERP: Module Overview

The diagram above gives you a quick overview about the parts (“modules”) of SAP ERP and the concepts they handle. As you can see, the SAP system handles many core business processes.

Learning SAP ERP is something that makes a lot of sense for any person working in a company where SAP is used. The people implementing solutions within SAP ERP are SAP consultants and work in a programming language called ABAP.  Consequently, SAP consultants are often very highly paid, making them attractive career paths for many software developers or domain experts.

The use of SAP ERP as an integrated business process management system has many advantages. Among them are:

3. SAP Is an Ecosystem

Beyond being a company and an abbreviation for the ERP system, SAP is much more. The SAP ecosystem of today spans a wide variety of software, tools and platforms, such as:

There are a great many more tools and applications in the SAP world. Listing them all would create a blog post hundreds of pages long, so I’ll stop at this point. Hopefully, this post will have given you an idea about what to answer when you are asked “What is SAP”.