What Is SAP?
SAP is one of the largest global providers of ERP software. SAP corporate headquarters is in Germany, with office locations in many countries, including the United States. Although SAP is well-known for its enterprise ERP solutions for the largest corporations, it also offers ERP software products targeting small businesses and mid-sized companies.
What Is ERP?
ERP is enterprise resource planning software having multiple integrated modules in a unified database working together to handle business processes and transactions for functions throughout the organization.
ERP systems work with SAP HR and SAP CRM modules or integrate with third-party software for human resources, payroll, and CRM (customer relationship management). We include these modules in our SAP modules list, although they may be considered separate products outside ERP.
SAP ERP System Modules
SAP ERP system modules consist of both functional modules and technical modules. For a complete list of SAP ERP modules, visit the SAP website Help section to find a searchable and expandable Product Hierarchy of SAP software.
SAP functional modules are used to process transactions and reports in a business area of the company.
The functional ERP SAP modules list includes:
- Human Capital Management (SAP HCM)
- Production Planning (SAP PP)
- Material Management (SAP MM)
- Financial Supply Chain Management (SAP FSCM)
- Sales and Distribution (SAP SD)
- Project System (SAP PS)
- Financial Accounting and Controlling (SAP FICO)
- Plant Maintenance (SAP PM)
- Quality Management (SAP QM)
- Investment Management (SAP IM)
Technical modules perform technical processes in the information system and functions in the ERP system, including providing an advanced programming language (ABAP) to use with SAP, system administration, and evaluating and maintaining SAP solutions that may be combined with third-party software.
Technical SAP modules, tools, and platforms include:
- SAP NetWeaver (formerly SAP Basis)
- SAP EP (Enterprise Portal)
- SAP PI (Process Integration)
- SAP Solution Manager
- Advanced Business Application Programming (SAP ABAP)
- SAP Application Server
- Business Technology Platform (SAP BTP)
SAP offers AI-driven business analytics and business intelligence (BI) solutions within the SAP Business Technology Platform.
Main SAP ERP Functional Modules
Descriptions of the main SAP ERP functional modules that are in demand from users follow.
Human Capital Management (SAP HCM), also known as Human Resource Management (SAP HRM) or Human Resources (SAP HR)
The SAP Human Capital Management (HCM) module progresses beyond just human resources personnel administration and payroll to treating employees as valuable assets.
Features relating to HCM include:
- Employee experience management
- Talent management from recruiting and onboarding to employee training
- Core HR and payroll
- HR analytics and workforce planning
Human Success Factors, a SaaS suite, provides cloud-based HXM features for human experience management. Human experience management includes using built-in Qualtrics surveys for employees to track their needs and experiences.
Production Planning (SAP PP)
The SAP Production Planning module is used to plan and accomplish manufacturing tasks with materials requirements planning (MRP). The Production Planning module does capacity planning, uses the hierarchical bill of materials (BOM) from master data for each product and subcomponent with underlying parts, accomplishes master scheduling of resources, and handles inventory movement.
Production Planning can perform lot size optimization, sequence planning, and exception handling as part of data management.
Material Management (SAP MM)
SAP Material Management module deals with supply chain logistics, sourcing, inventory procurement with purchase requisitions and purchase orders, and inventory management. The master data file, vendors file, and bill of materials are part of SAP MM.
Material Management is used in combination with accounts payable in the Financial (SAP FI) module for the invoice verification process to match POs and receivers.
SAP offers a separate web-based Supplier Relationship Management (SAP SRM) platform.
The add-on Warehouse Management System (WMS) SAP solution maps and manages inventory to the storage bin level.
SAP HANA S/4 has an Advanced Planner and Optimizer (SAP APO) for supply chain management (SCM).
SAP also offers Product Lifecycle Management (PLM) software.
Financial Supply Chain Management (SAP FSCM)
The SAP Financial Supply Chain Management module redefines the meaning of the supply chain, relating it to customer functions for risk management assessment, billing, accounts receivable, and collections.
Sales and Distribution (SAP SD)
The SAP Sales & Distribution module handles sales, pricing, shipping, credit management, billing, and foreign transactions. SAP offers an add-on CRM product for customer relationship management besides its SAP SD module.
Project System (SAP PS)
The SAP Project System module is project management software used for customer and internal projects, including capital investment and overhead. Project System includes a work breakdown structure (WBS), processes consisting of individual activities in a work package, and planning and scheduling tasks. Procedures include budget allocation and management for the project.
Financial Accounting and Controlling (SAP FICO)
The SAP modules for finance are Financial Accounting (SAP FI) and Controlling (SAP CO) modules, combined as FICO to handle accounting and planning.
The Finance SAP FI module includes SAP sub-modules for accounts receivable, bank accounting, asset accounting, accounts payable, travel management, fund accounting, general ledger accounting, and legal consolidation.
Controlling (SAP CO) is used for planning by account category for each cost center and profit center (rolled up). Enterprise Controlling accomplishes actual cost vs budget variance analysis in combination with cost and profit center accounting. The functionality of CO includes profitability analysis by market segment, product cost and pricing for profitability analysis, activity-based accounting, and internal orders with cost tracking.
SAP offers another product for Treasury and Risk Management that integrates with the S/4HANA SAP system.
Plant Maintenance (SAP PM)
SAP’s Plant Maintenance module is used for planned maintenance, predictive maintenance, and plant shut down for maintenance. SAP offers embedded IoT (Internet of Things) using sensors connected to plant equipment and software, within its Business Technology Platform.
SAP Plant Maintenance can be used with Amazon’s AWS IoT to accomplish predictive maintenance and operational cost savings.
Quality Management (SAP QM)
The SAP Quality Management module is used to accomplish quality planning, quality inspection, and quality control. You can create quality certificates and get quality notifications for exceptions handling. An impressive capability of the Quality Management module is that it can be used to implement a quality system that reaches ISO 9000 goals.
Quality Management integrates with other SAP modules, including Materials Management (MM), Sales and Distribution (SD), and Production Planning (PP). And Quality Management works with cost accounting data within the SAP ERP system.
Investment Management (SAP IM)
The SAP Investment Management module in ERP Central Component (ECC) is used to plan, budget for, finance, and manage investments projects, including capital expenditures, R&D, maintenance projects, establishing new markets, and employee training.