Advantages and disadvantages of SAP ERP


Advantages:

  • ERP allows easier global integration (Barriers of currency exchange rates, language, and culture can be bridged automatically)
  • Updates only need to be done once to be implemented company wide
  • Provides real-time information, reducing the possibility of redundancy errors
  • Creates a more efficient work environment making it easier for employees to do their job which leads to effectiveness
  • Vendors have past knowledge and expertise on how to best build and implement a system

Disadvantages:

  • Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high
  • Inflexibility- vendor packages may not fit a company's business model exactly and customization can be very expensive
  • Return on Investment may take too long to be profitable
  • SAP ERP implementations have a risk of project failure

SAP R/3

SAP R/3 is the former name of the main enterprise resource planning software produced by SAP AG. It is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing

History of SAP R/3

The first version of SAP's flagship enterprise software was a financial Accounting system named R/1 called as YSR. This was replaced by R/2 at the end of the 1970s. SAP R/2 was in a mainframe based business application software suite that was very successful in the 1980s and early 1990s. It was particularly popular with large multinational European companies who required soft-real-time business applications, with multi-currency and multi-language capabilities built in. With the advent of distributed client–server computing SAP AG brought out a client–server version of the software called SAP R/3 (The "R" was for "Real-time data processing" and 3 was for 3-tier). This new architecture is compatible with multiple platforms and operating systems, such as Microsoft Windows or UNIX. This opened up SAP to a whole new customer base.

SAP R/3 was officially launched on 6 July 1992. It was renamed SAP ERP and later again renamed ECC (ERP Central Component). SAP came to dominate the large business applications market over the next 10 years. SAP ECC 5.0 ERP is the successor of SAP R/3 4.70. The newest version of the suite is MySAP 2005 or SAP ECC 6.0.

Releases

  • SAP R/3 Release 3.1I
  • SAP R/3 Release 4.0B Release Date June 1998
  • SAP R/3 Release 4.5B Release Date March 1999
  • SAP R/3 Release 4.6B Release Date Dec 1999
  • SAP R/3 Release 4.6C Release Date April 2001
  • SAP R/3 Enterprise Release 4.70 Release Date March- Dec 2003