What is SAP? (With Definition, Benefits and Skills)

By Indeed Editorial Team

Published 2 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

SAP, or Systems Applications and Products, is a widely used enterprise resource planning software that many businesses in a variety of sectors use. Developing SAP skills can improve your chances of getting a promotion or earning a higher salary. If the company you work for uses SAP software for its business, understanding how to use SAP in relation to the industry you specialise in can help you succeed in your role. In this article, we discuss what is SAP, the need for using it in different businesses, how to improve your SAP skills and usage of SAP in the workplace.

What is SAP?

Depending on your role, you may hear about resource planning software and you may wonder, 'What is SAP?' SAP is one of the most popular enterprise resource planning (ERP) software platforms. An ERP is a business management software that's typically a group of integrated applications and tools that an enterprise can use to collect, store, manage and interpret data from various business activities.

SAP creates a computer-based system for businesses that enables each department to access and share data. This system has various modules that help users collect, share and analyse data to make predictions and arrive at better business decisions. SAP systems help to create a better work environment for every employee in the company. It contains a comprehensive list of modules and a third-party application marketplace to cover all areas related to business.

What are important SAP skills?

Acquiring good SAP skills makes you a preferred candidate when you apply to companies that use enterprise resource planning software. Sufficient experience and proficiency with SAP can be a requirement for some job profiles. Here are some common SAP skills:

Making transactions

Transactions enable you to input various data into the SAP software in the desired format. Inputting the correct data in the software is the first step in unlocking the full potential of SAP. Knowledge of transactions and the ability to input data to the SAP software can be helpful when applying for jobs requiring data entry and managing sales.

Reporting

Reporting involves generating various reports from the data fed in by different user departments. It's important to have excellent knowledge about the various reports you can create based on the requirements of your team and management. These reports often serve an important role in managerial decision making.

Recruiting

The recruitment module is helpful for human resource department professionals. A good understanding of the recruiting module helps manage candidates and potential team members and assign them positions according to their capabilities. SAP can manage the complete talent acquisition life cycle by handling the data at each step of the hiring process.

Accounting

The SAP software's accounting module helps record the financial transactions of all movements of goods, services and other business transactions between the company and its vendors and customers. Knowing how to use the accounting module can give you an advantage in an accounting or finance job.

Management

SAP provides multiple management modules, such as warehouse management, customer management, project management and inventory management. If you're applying for a management position in an organisation, then having knowledge in management modules may give you an advantage over other candidates.

Communication

Being able to communicate with other departments is an essential aspect of SAP. It's good to have excellent knowledge about how to communicate with different teams through SAP software. This can give you an added advantage over other candidates while applying for a job related to SAP software.

SAP training and certification

Undertaking SAP training and getting certified can add value to your CV and make you more knowledgeable about SAP. While some training is free, more specialised courses require payment. SAP provides training in various modules and offers multiple certifications depending on the skills you wish to pursue. Here are some of the common fields where you can obtain SAP certification:

  • Commerce

  • Project management

  • Finance implementation

  • Sales implementation

  • Integrated business planning

  • Management accounting

  • Financial accounting

  • Modelling and data management

  • Manufacturing implementation

  • System security architect

  • Speed analysis

Usage of SAP in the workplace

The success of any organisation depends on effective communication and proper data exchange between its various functions. SAP collects and processes data from all the functions of a business. Various communication tools in SAP make it possible for departments to share their data and insights. Since companies across the world use SAP, having a good understanding and experience using SAP is a valuable skill. Here are some of the most common modules of SAP:

Project management

SAP is extremely useful for project managers. It has all the tools for managing a project, from its initiation to completion. Some of the sub-modules in project management are:

  • Project initiation: This module facilitates setting up and launching a project. It supports handling the project definition, networking activities, work breakdown structure, setting milestones and project creation.

  • Project planning: The planning module helps you plan the cost, revenue, material, capacity, workforce and schedule related to the project.

  • Project execution: This module manages the activities related to monitoring and implementing a project. It takes care of the goods receipt, entry of timesheet, goods issue, billing, entry of service and analysis of progress.

  • Project closure: The project closure module contains information related to the period-end closing and closing of the project.

Read more: 15 Project Management Skills Every Manager Should Have

Human resource management

It's important for the human resources department to manage the details of professionals from when they join the company up until they resign. HR also handles data related to the hiring process. SAP provides all the tools that can help the HR department manage its work. Some of the sub-modules in human resources are:

  • Personnel administration: This module helps capture team members' details, such as personal information, hiring and payroll details.

  • Organisation management: HR uses this sub-module to plan workflow management.

  • Time management: This module captures the attendance, leave, absence, permission and shift details of the staff.

  • Personnel development: This module helps in career planning, performance management and objective settings for team members.

  • Payroll: The payroll sub-module manages functions related to processing the employee-related expenses, such as salary, tax and bonus.

Customer relationship management

The customer relationship module can automate and integrate customer activities, such as sales, marketing, customer satisfaction, commerce and customer service. Here are some functions in SAP that CRM professionals regularly use:

  • Sales CRM: This gives customers a better experience by providing customised quotes, recommendations on sales strategy, AI-powered selling, workspace for sales negotiation, billing and invoice handling.

  • Marketing CRM: This functionality helps the CRM professional by providing features like managing marketing campaigns, identifying and targeting customers, smooth customer experience and team collaboration.

  • Customer service CRM: This SAP functionality is helpful for customer service representatives in delivering exceptional customer service. History of service interaction and Artificial Intelligence assisted communication are key features.

  • Commerce CRM: Commerce CRM provides professionals with experience in order management, processes for transparent commerce and industry-specific capabilities.

Read more: 20 Marketing Skills to Highlight on Your Application

Warehouse management

SAP warehouse management software provides warehouse managers with all the essential tools for managing a warehouse. Some functionalities available for warehouse management are:

  • Inbound and outbound processing management: This feature of SAP warehouse management provides data validation for shipping updates, receipts acceptance and streamlines the receipt processing. This helps warehouse managers to have an effective inbound management system. The outbound processing module takes care of the packing schedule, shipping and stock selection.

  • Storage and Operations: This module supports in performing the internal process such as inventory management, the status of the equipment in use, stock visibility and cycle counting.

  • Cross-functional management: This module handles cross-functional features, such as scheduling the dock appointment, batch processing, serial number management, and traceability.

Finance management and accounting

The finance management and accounting module offer functionalities to support the finance team in keeping track of the company's finance and accounts. Some of the sub-modules in this area are:

  • Financial planning and analysis: This sub-module help strategically, especially in forecasting, preparing the budget, performance management and analysing and reporting the finances.

  • Accounting and tax management: This sub-module assists in streamlining reconciliation, reporting regulation compliance and closing process accounting.

  • Treasury and cash management: Treasury and cash management perform forecasting of cash flow, risk management, debt management and investment management.

  • Accounts payable and receivable: Billing and invoice management, evaluating the credit, assisting in risk and debt management are the essential services of this sub-module.

Please note that none of the companies mentioned in this article are affiliated with Indeed.

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