Why Choose SAP and How to Plan Your Budget for It?

SAP Plan


Technology is the backbone of efficient operations in businesses. SAP, which stands for Systems, Application, and Products, is world-leading Enterprise Resource Planning (ERP) software. 


SAP provides industry-specific solutions across business operations—CRM for Sales and Marketing, Sales and Distribution, Financial Management, Human Resources, Asset Management, Product Lifecycle Management, and Supply Chain Management. Initially, SAP was limited to only large organizations. However, things are changing now. Today, about 80% of small-to-medium-sized businesses use SAP software for enhanced operations. The core of SAP is flexibility for business.


Keep reading to find out how SAP can help streamline your business operations and how you can budget for it.


Why SAP?


1. SAP software offers a user-friendly ecosystem equipped with solutions that can be optimized and customized.

2. SAP software integrates all business functionalities into one and provides real-time data that helps make fast decisions.

3. Increased adoption of cloud services for human capital management functions, enormous data, and social networking in organizations require a change from the traditional technology.

4. SAP regularly undergoes external reviews and audits to check compliance and supports data security and privacy regulations worldwide.

5. Gartner has admitted SAP as a leader in all four analytics options locations—BI Platforms (SAP has dominated 22% of the BI market), Corporate Performance Suites, Data Integration Tools, and Data Quality Tools.


SAP represents over 23 % of the total enterprise applications in the marketplace with in-memory, cloud, and mobile technologies to help decrease disruptions for consumers. SAP helps reduce users’ total IT costs. SAP users enjoy 23 % lower implementation service costs per component and 9.3 % lower software, service, and support per user. 


SAP Pricing


The SAP Business One includes the cost of SAP software, implementation services, and hardware used by medium-sized businesses that offer services, have about 250 employees, and include modules like cross-function and analytics, research and development services, financial accounting, and controlling, materials management, sales, and manufacturing.


Calculation of Contract Price of SAP Business One:


  1. Determination of SAV


The list price of SAV relevant price list items is added to determine the SAP Application Value, which is determined separately for discounted and non-discounted price list items.


  1. Calculation of Database Price


The correct percentage of SAV is applied separately to the discounted and non-discounted for calculation of database price.


  1. Determination of List Price for the Non-SAV Items


The list price sub-total for discounted and non-discounted non-SAV items is calculated separately.


  1. Determination of Total List Price


The total list price is the sum of the three values of discountable and non-discountable parts of SAV, database price and the non-SAV value.


  1. Calculation of Standard Volume Discount Percentage


Calculation of Standard Volume Discount Percentage, based on the total list price.


  1. Calculation of Contract Price


The discount percentage is added to the discountable part of the total list price, and this result is added to the non-discountable value of the total list price.


The following will be applied for SAP Business:

The Volume discount cannot be applied in conjunction with any other discount offered by SAP.

If the customer receives a corporate discount, the volume discount is replaced by the corporate discount.

According the conditions of the SAP Business One Price list, Customers using SAP Business One are only eligible to order the special SAP Standard Support for SAP Business One.

Volume Discount: is calculated according to the SAP Price List for SAP Business One.

Corporate Discount: Discount received by customers according to their existing contract.



What is the Difference Between Planning and Budgeting in SAP?


In SAP, planning is an iterative process. Planning is a financial estimation for the next 3-5 years to prepare the organization for the future possible situations that it is likely to face in the environment operating. Planning is the input for budgeting.


Planning in SAP


1. Availability control cannot be activated using planning.

2. Planning is made from down to top.

3. Planning is done on controlling objects like cost centers, profit centers, internal orders, WBS elements etc.


Budgeting is for managing and monitoring how you spend your funds in your day-to-day transactions. Budgeting uses one lump sum amount per object.


Budgeting in SAP


1. Availability control can be activated using budgeting.

2. After planning, the execution of the budget starts.

3. Budgeting is done on the temporary or the project-like CO objects (internal orders and WBS elements). 


Also Read: How to Optimize Purchase Planning and Control Costs with SAP Business One


SAP Budgeting Module


The budget module helps to manage and track company expenses. The purpose of budgeting is to provide a forecast of revenue and expenditure to know the actual financial operation of the business. The maximum amount in the data entered is allocated to a particular G/L account. SAP Business One checks the budget for deviations against the debit side of the transactions registered to the G/L account.


The SAP Business One software cost depends on how the business enterprise deploys it, covering five major areas—

the Deployment model, Software Licensing costs based on the number of users and access types required, cost of implementation, up-gradation of hardware, and maintenance and support services.


Conclusion


Praxis Info Solutions help businesses implement SAP software successfully within stipulated budget costs and timeline. We offer assistance across various aspects of SAP implementation ranging from adopting best practices, standardizing business processes, suggesting innovative methods to address complex issues, keeping the solution simple, and working with stakeholders at all levels of the organization.


To know more about how SAP B1 can help your business enhance operations and boost growth, contact us today. 

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