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in the market. The company also aligns with world-class partners that provide certified system
integration and hardware and software solutions. SAP solutions are designed to enable rapid
implementation and customization to unique business requirements; provide for fast application
upgrades; provide upwardly compatible enterprise application interfaces; allow for automatic soft-
ware distribution to mobile, handheld, connected, and thin client users; and be easy to administer
and support. SAP also provides a systematic and responsive service and support infrastructure that
contributes to the success of each of the SAP implementation projects.
This chapter understandably banks heavily on the SAP's product messages and documenta-
tion. At this level, it is not very easy to make objective assessments of SAP's architecture, strate-
gies, and products vis-à-vis other CRM products on the market. And, therefore, hereafter this
topic assumes that SAP is the preeminent CRM solution on the market—which it is! Scores of
SAP features and characteristics are par excellence and need to be applauded. These include SAP
Architecture, SAP Tools, SAP Application Customization and Upgrades, and SAP's lowest Total
Cost of Ownership (TCO).
In 1972, five former IBM employees, Hasso Plattner, Dietmar Hopp, Claus Wellenreuther,
Klaus Tschira, and Hans-Werner Hektor, launch a company called SAP (Systems Analysis and
Program Development). Their vision was to develop standard application software for real-time
business processing. These been involved in the provisional design of a software program that
would allow information about cross functional and cross divisional financial transactions in a
company's value chain to be coordinated and processed centrally—resulting in enormous savings
in time and expense. They observed that other software companies were also developing software
designed to integrate across value chain activities and subunits. Using borrowed money and equip-
ment, the five analysts worked day and night to create an accounting software platform that could
integrate across all the parts of an entire corporation.
5.1.1 SAP R
/
1
In 1973, SAP unveiled an instantaneous accounting transaction processing program called R/1,
one of the earliest examples of what is now called an enterprise resource planning (ERP) system.
Today, ERP is an industry term for the multimodule application software that allows a com-
pany to manage the set of activities and transactions necessary to manage the business processes
for moving a product from the input stage, along the value chain, to the final customer. As
such, ERP system can recognize, monitor, measure, and evaluate all the transactions involved
in business processes such as product planning, the purchasing of inputs from suppliers, the
manufacturing process, inventory and order processing, and customer service itself. Essentially,
a fully developed ERP system provides a company with a standardized information technology
(IT) platform that gives complete information about all aspects of its business processes and
cost structure across functions and divisions. Right from the beginning, SAP's goal has been to
create the global industry standard for ERP by providing the best business application software
infrastructure.
In its first years, SAP not only developed ERP software, but it also used its own internal
consultants to install it physically on-site at its customers' corporate IT centers, manufacturing
operations, and so on. Determined to increase its customer base quickly, however, SAP switched
strategies in the 1980s. It decided to focus primarily on the development of its ERP software
and to outsource, to external consultants, more and more of the implementation services needed
to install and service its software on-site in a particular company. It formed a series of strategic
