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Is SAP an ERP System?

When a life science startup has reached a certain point in its journey, the complexity of its operations may drive its leaders to seek a solution that can help manage chaos and streamline the business. Some of the most brilliant minds work in this industry, yet computer technology can still perplex scientists and other professionals who launched a business with nothing more than a drawing on a napkin.

Whether a search for help is conducted via word of mouth or on the internet, the terms SAP and ERP are likely to come up. This raises the question: Is SAP an ERP system? Or is it something else?

Let’s start with SAP. SAP (the name was originally an abbreviation of Systems, Applications, and Processes in data processing) is one of the world’s largest business management software firms. The Germany-based tech giant, which boasted $27.3 billion of revenue in 2020, powers hundreds of thousands of businesses across 180 countries. 94 percent of Fortune 500 companies are customers, yet 80 percent of its customer base is actually composed of small to midsize businesses.

SAP also is the common name for the flagship platform that SAP sells. The short answer to the question “Is SAP an ERP system?” is that SAP is a top provider of enterprise resource planning systems (ERP), so the two terms are often used interchangeably. In truth, though, ERP is a superset of SAP.

 

Understanding Enterprise Resource Planning Systems

Now that the first question is cleared up, you probably have another one: What is an enterprise resource planning system?

Think of an enterprise resource planning system as software that follows a specified set of standards to link all the business applications your life science firm uses in one simple dashboard. The ERP system integrates the key functions of the business into a single platform that provides data analytics quickly and easily. The system is automated in a manner that eliminates operational inefficiency and expensive processes.

Although this technology isn’t new, it once was reserved for large businesses, due to the high cost of implementing and maintaining complex, on-premise ERP systems. As cloud computing started gaining steam, however, in 2007 SAP launched SAP Business ByDesign, a cloud-based version of their platform that greatly leveled the playing field for smaller companies in terms of cost and maintenance.

The ERP industry as a whole is moving more toward the software-as-a-service model in the cloud, which is one reason SAP’s enterprise resource planning system software is more accessible to life sciences firms at earlier stages of their growth journey. The centralized ERP solutions available today don’t require large upfront investments or on-premise technical maintenance.

 

ERP Greatly Reduces Life Science Supply Chain Challenges

The shift to the cloud has been a huge aid to life science firms managing complex supply chains, regulatory requirements, and quality control, as ERP systems can increase productivity and improve performance. But that doesn’t mean that life science supply chain challenges have disappeared.

Managing supply chains in the life sciences is often more challenging than it is in other industries. For one, cost predictability is important as a company’s growth transcends R&D and scales up to production. Business cycles for life sciences firms can change quickly, and the real-time data from an ERP system provides the ability to make quick adjustments, limit risk, and identify new opportunities.

Your company’s ERP can be integrated with systems used by a contract manufacturer, materials supplier, or logistics provider, too, which helps reduce life science supply chain challenges. This offers real-time information on inventory, supply and demand issues, price fluctuations, and more. Many systems will flag any cost exceptions and even model alternative sourcing options.

The ability to stay agile during production and distribution helps ensure consistency in product delivery and can improve delivery times, not to mention provide tracking and reporting data on transactions.

Perhaps one of the greatest assets an ERP system offers to a life sciences firm is the potential cost savings associated with meeting the FDA’s mandated validation requirements. Many of today’s off-the-shelf ERP systems come preconfigured with such capabilities.

Ultimately, ERP systems help ensure quality control while still identifying underlying costs that influence manufacturing and sale targets, so you can budget more efficiently and spot opportunities for savings. ERP also provides the data necessary to help streamline processes and strengthen operations. Having all the information from different business functions available in one dashboard means you don’t have to track down bits and pieces from disparate platforms and applications to gain a full picture.

 

ERP Life Science Software Can Improve Your Business Operations and Processes

The life science industry manages changing and strict regulatory demands while navigating a competitive market. Real-time visibility that goes beyond price and availability and helps ensure quality and regulatory compliance becomes much more important as a startup grows its business operations.

SAP’s decades of experience with ERP systems have led to life science software that can help startups and midsize firms manage and consolidate overall performance across all business functions to eliminate redundancies and allow more time to focus on strategic growth initiatives.

Navigator Business Solutions has developed a prepackaged industry solution that preconfigures SAP’s Business ByDesign platform for life sciences firms. Learn more about this ERP life science software and how it can help your company continue to grow and evolve.

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