What is SAP Abbreviation?
SAP stands for system application and processing. In practice in the business world, SAP often uses ERP or enterprise resource planning applications that will integrate all divisions within a company in order to achieve the desired targets or work results. In Indonesia, SAP has been implemented since the early 1990s by manufacturing companies.
Basically, this SAP is run with a special program created by an IT programmer according to the data analysis needs that you want to see, for example, when a food company releases a new food product at a branch of the company, within a certain period of time after a food product is launched, Marketing managers at headquarters can see sales movements and consumer enthusiasm levels.
The reports obtained by the marketing manager will be used to prepare advanced marketing strategies so that sales of new products have increased. On the other hand, the data obtained can also be used by other divisions such as the finance and HR divisions, to see the flow of financial management from new products launched to assessments related to the readiness of human resources in the field when offering products.
When you understand the abbreviation SAP, there are several aspects that will be related to it and periodic management is needed so that the company can achieve its desired profit target or other targets.
1. For Financial Planning and Use
SAP that is designed using ERP will create a module that can be used by the finance or finance department to do several things, such as:
- Plan the number of funds that will be used for company operations and the percentage of effective use of funds.
- The total possible problems that arise during the use of funds for company operational activities, for example when there is an overage of funds for promotional activities or the launch of new products from the company.
- Evaluates the use of the annual funds spent by each division in the company and provides a budget plan that will be given in the following year.
- Collect data from each division to create valid financial statements and will be used as a policy consideration of company leaders.
2. Monitor the Availability of Raw Materials
When you realize that SAP software is related to a system that will provide data during the production process, then you cannot let go of the relationship between SAP and raw material availability data in each manufacturing company.
A properly implemented SAP system will help give an idea to shareholders and company leaders regarding the stock of available raw materials and the total raw materials that have been used for the production process.
That way, the head of the company or the head of the production division can make a policy of how much the total raw material must be added or spent to get the targeted production capacity.
3. Helping Operational Activities
SAP specifically designed by experts in their fields will help operational aspects. In practice, operational activities require an SAP system to keep production activities running properly and minimize losses that may occur due to machine problems or human errors.
The data obtained from operational activities will help the operational division to provide reporting on the results of production activities, such as production targets for goods that can be met within a period of days to years or the efforts that must be made to meet production targets.
4. HR Activities Become Easier
When an HR in a company not only understands the SAP software but also understands the procedures for implementing the application, the HR will have a system module that is able to present data related to HR activities in relation to production and marketing activities. HR can present several things, such as:
- The number of human resources needed to ensure production activities in a manufacturing company or other types of company run smoothly in accordance with company requirements.
- A work system that can be applied in a company to meet the production targets desired by the company
- Individual assessments relating to the payroll process as well as to the mutation process and other needs that will be applied according to performance results.
- Designing a system or policy to improve individual capabilities so that the production process can run more effectively and increase production output compared to the previous production year.