SAP Definition – What is SAP?

Understanding SAP

As promised, it’s important to start from the ground level basics. Before anyone starts on HANA, let’s have a short backstory of what SAP is and then we get to the SAP definition.

What does SAP Stand for?

The term SAP stands for Systeme, Anwendungen, Produkte in German (which translates in English to Systems Applications and Products). Many might say it’s important to pronounce SAP as “Ess Ae Pee” and not Sap due to many reasons (The most common one I’ve heard is that saying Sap is offensive to Germans). Well I’ve lived in Germany and many places in Europe for around a year and have heard many pronounce SAP as Sap. It’s just another perpetuated myth. Germans are more concerned about work to be offended by pronunciations.

SAP, the company started in 1972 by five former IBM employees in 1972. To know more about it, do take some time to visit their website and have a look at their amazing solutions.

The SAP Software Suite – Why is it relevant?

To understand what SAP does, we need to understand how Organizations work.

Companies will usually have a Finance department, sales department, HR department, and more depending upon the size and profile. Now if all of them maintained their data on different databases, inconsistencies between them are bound to grow and multiply over time. In a competitive market, confusion equals revenue leakage.


SAP is an amazing “packaged” application that comes to the rescue. A packaged application is one which comes pre-loaded with all features required to perform a standard task. Customization and configurations are required to tweak it as per your business.

What is SAP ERP?

SAP ERP (Enterprise Resource Planning) software is one such central application which covers Sales and Distribution (SAP SD), Production Planning (SAP PP), Financials (SAP FI), Human Capital Management (SAP HCM) and many more. All these applications run on a single database and thus any chance of inconsistency is eliminated. For example, when a customer buys something, the Sales application updates the invoice details in the database and also the finance tables with the payment information.

SAP ERP is a transactional system with data being written to its database frequently in a productive business environment. Whenever you have a business, there comes a need to measure your success and/or failures. Now, you need analytical applications to generate reports for your management to understand customer trends, sales bottlenecks and other KPIs (Key performance Indicators).

Analytical operations are usually performed in SAP BW or HANA models and will be the primary focus of this website. What are BW and HANA? Well that’s another post…

By the end of this post you would have now:

Gained a basic understanding of the SAP definition, history of SAP and applications it offers.

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Stay tuned for the next tutorials. Happy Learning!

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4 Comments

    • Any one can learn SAP. I am from an Electrical engineering background.
      If you are a mechanical engineer by profession, I don’t see any way how SAP would help you.
      But if you plan to switch your profession, then Yes… SAP is a great career option in IT.

    • Yes you can. It will be very beneficial for you because right now, most of companies trying to digitalize their business. I’m a chemical engineering graduate but now working as a consultant in a large SAP Project with International Oil & Gas Company.

  1. Hello Vallabh, Even I am also a mechanical Engineer doing good at my profession as SAP Developer. so don’t worry about it. You can do great. Have hope and work smart. If you want to choose SAP as your career, then start a proper research about the modules and co relate your skills & interest to that module area like Material Management (MM), Quality Management (QM), Plant Maintenance(PM), Production & Planning (PP)…etc. The example modules here I have mentioned are closed related to mechanical engineering courses. You should know the business process for doing great at your job. All the Best for your future endeavors.

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