Enterprise Structures and SAP Implementation

Enterprise Structures and SAP Implementation
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Eshna

Last updated October 31, 2016


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The number of enterprises grows every day and so does the competition. Every enterprise comprises of a few common departments and a few specific departments unique to the organization based on the industry. Departments like HR, Payroll, Finance, Admin etc., are common to enterprises across industries. On the other hand departments like Financial Accounting, Sales Team, and Online Marketing Team etc., are industry specific departments unique to some enterprises. Every department has their own set of data and documents that the team members manage at department levels. However, to manage all these data of different departments at an enterprise level is a big challenge. To manage the entire data of an enterprise is very difficult manually. To make this possible, there are enterprise resources planning solutions developed for better work processes and data organizational management at an enterprise level. SAP is a market leader in providing ERP systems. SAP has solutions for different processes such as SAP HCM module for HR department, SAP SD module for Sales department, SAP FI module for Finance department, SAP MM module for Product team and so on. SAP implementation on different enterprise structures results differently. While smaller enterprises might not wish to invest heavily on an ERP solution, for larger enterprises it can be one of the biggest necessities. Let’s identify the different types of enterprise structures and the impact of SAP implementation in the organizational structure in this post.

Major Types of Organizational Structure

  • Single Entity
  • Partnership
  • Limited Company
  • Social Enterprise Company

Single Entity: Running a business as a single entity comes under the legal organizational structure of sole trader. Such type of organizations are solely handled and managed by a single owner who invests money on it and is responsible for all profit or loss that comes as resultant. Setting up as a single entity is simpler than other enterprise structure. Loads of paper works, revenue division, accounting and business audits are eliminated from such types of enterprise structure. Being a sole trader, one will never require a SAP system to manage stuffs. However, things do not end as a sole trader. It continues to expand and making big. As the enterprise grows, the necessity for organizational management emerges. Being a sole trader, you will wish to track the entire processes of an enterprise through a unified system. SAP NetWeaver is the best option for sole trader as it manages different process through a single system and brings down cost of ownership.

Partnership: When two or more people run an organization, it is termed as partnership business. The amount of risks, investment, responsibilities, profit, loss and stakes are shared among the partners. The percentage of ownership varies based on different factors. There can be standard partnership, limited partnership and a limited liability partnership. For such an entity, enterprises can take up different SAP ERP system for different processes.

Limited Company: The legal organizational structure for limited company involves a lot of paper works and legal procedures. Such company’s limits liability and the owner’s personal assets are different from the company’s finances. Limited companies are generally built up through venture capital investments made by individuals or organizations. Such types of company involves good number of employees and tasks such as payroll structure, time management, HR management apart from other industry specific departments. SAP ERP solutions include software system for managing the data bases across different departments. SAP ERP system can be used for automatically tracking the payroll details, employee work timings and so on.

Social Enterprise Company: These types of companies are kind of limited companies that work for a social cause. The motive for working for a social cause is larger than profit making. At times social enterprise companies are much bigger in size and lots of legal data and processes need to be recorded. SAP systems serve good help in the thorough organizational management of such companies.

SAP implementation is effective for every organization but the type of system adopted should fulfill their requirement. Bigger organizations can handle SAP systems for different process while smaller organizations can adopt SAP NetWeaver to manage different process from the same space. It depends on the amount of investment enterprises are willing to make and also as per their requirement.
 

About the Author

Eshna is a writer at Simplilearn. She has done Masters in Journalism and Mass Communication and is a Gold Medalist in the same. A voracious reader, she has penned several articles in leading national newspapers like TOI, HT and The Telegraph. She loves traveling and photography.


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