SAP AG: The Company Behind R3

11:15 AM
SAP AG was founded in 1972 by four former IBM employees, the company headquarters are based in walldorf, a small German town close to Heideberg, where the university is a continuous source of employees at SAP. Many of the gurus behind this phenomenal system known as R/3 come from this University.

Since it’s foundation, SAP has made significant development and marketing efforts on standard application software, being a global market player with it’s R/2 System for mainframe applications and it’s R/3 system for open client/server technologies.

The company name, SAP, stands for Systems, Applications and Products in Data Processing. After the introduction of SAP R/3 in 1992, SAP AG has become the world’s leading vendor of standard application software. One of the reasons for SAP’s success is that since it is a standard package, it can be configured in multiple areas and adapted to the specific needs of a company. To support those needs, SAP includes a large number of business functions, leaving room for turther funcionality and enhancements or adaptability to business practice changes. More and more, corporations are deciding to use standards software systems that are highly flexible and configurable and able to support most their business practices and information needs. This kind of package leaves the development of custom software only for exceptional case.

The maturity and solid experience of SAP  in solving the information management problems of businesses around the globe have made it’s R/3 system the clear market leader in the development of standard applications.

Strategy and Products

SAP invests approximately 20 percent of its annual sales revenue in research and development in order to remain at the edge of technological innovation. With more than 25 percent ot its employees working in the research area, SAP wants to make sure that it can maintain a constant dialogue with customers and users and exchange with them experiences and ideas to enhance its systems and service offerings. This information exchange is vital in order for SAP to maintain a long-term relationship with its customers and to attract new ones to the R/3 wave.


SAP has greatly based the functionality of its R/2 and R/3 software systems in the business process concept. For SAP, a business process is the complete functional chain involved in business practices, whatever software module has to deal with it. This means that the chain might run across different modules. SAP sometimes refer to this kind of feature as an internal data highway. For instance, what travel expenses, sales orders, inventory, materials management, and almost all types of functions have in common is that most of them finally link with the finance modules. R/2 and R/3 are particulary noted for this type of comprehensive business functionality which qualifies the systems as being highly integrated. SAP understands that business practices and organizations change often and quickly, so it left the system flexible enough to be able to adapt efficiently.

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