SAP Modules Guide + List of the Top 7 Module Types

Read on to learn more about SAP ERP, the different SAP module options available, and how each can support your business.

What is SAP ERP?

SAP ERP is one of the leading enterprise resource planning tools on the market. It integrates every core business process into a single, centralized location — and, subsequently, increases a business’s efficiency and momentum for its next phase of growth. As a popular ERP, many specialist accounting and payments software integrate with SAP. This is helpful when an organization wants to take advantage of a specialized solution from a separate vendor but still have the accounting data flow into the general ledger in SAP. This preserves SAP as the single source of truth.

SAP ERP is the overarching term for all modules of SAP AG — a German software company that has led the industry in efficiency for over 50 years. Like many other technical tools, they use industry acronyms or abbreviations to denote the role of each module and submodule. For example, the FI-AP module stands for “Financial Accounting: Accounts Payable.” Each broader parent module contains several submodules.

SAP functional modules include:

• SAP Financial Accounting.
• SAP Controlling (SAP CO).
• Finance and Controlling (FICO).
• Sales and Distribution (SAP SD).
• SAP Fieldglass.
• Customer Relationship Management (SAP CRM).
• Human Resources Management (SAP HR).
• SAP Business Warehouse (SAP BW).
• Plant Maintenance (SAP PM).
• SAP Project System (SAP PS).
• SAP Production Planning (SAP PP).
• SAP Materials Management (SAP MM).
• SAP Quality Management (SAP QM).
• SAP Warehouse Management (SAP WM).
• SAP Human Capital Management (SAP HCM).
• SAP Financial Supply Chain Management (SAP FSCM).
• SAP Logistic Execution (LE).
• SAP SuccessFactors.
• SAP Concur.
• SAP Ariba.

SAP technical models include:

• SAP Basis.
• SAP Security.
• SAP Solution Manager.
• SAP NetWeaver.
• Exchange Infrastructure (SAP XI).
• SAP Fiori.
• Advanced Business Application Programming (SAP ABAP).

Few businesses will ever need every module in the SAP ecosystem. To avoid engineering and complexity, determine your desired outcomes from SAP modules. Then, choose only the ones you need to make those goals a reality.

1. Accounting modules.

SAP accounting modules centralize financial data, automate accounting processes, and optimize reporting and insights for efficient resource management and cost control. Popular accounting modules include:

• FI-AP: Accounts Payable.
• FI-AR: Accounts Receivable.
• FI-TV: Travel Management.

2. Human resources modules.

Human resources SAP modules provide end-to-end support to simplify HR workflows. From personnel administration to payroll and development, these modules save managerial time and resources and strengthen the company from within. SAP’s human resources modules include:

• HCM: Human Capital Management (formerly called HR/human resources).
• MSS: Manager Self-Services.
• ESS: Employee Self-Services.

3. Supply chain management modules.

SAP supply chain modules enhance supply chain management and optimization. Beyond strategic planning and automation tasks, supply chain management SAP modules support warehouse logistics, procurement, and reporting. There are two supply chain management SAP modules available:

• SCM: Supply Chain Management.
• APO: Advanced Planning & Optimization.

4. Logistics modules.

Each SAP logistics module supports a distinct business arm or “branch” and streamlines supply chain management for better, faster ROIs. SAP ERP modules directly support transportation and warehouse operations, production planning, and quality management. Common SAP logistics modules include:

• EHS: Environment Health and Safety.
• MM: Materials Management.
• SRM: Supplier Relationship Management.

5. Industry modules.

SAP offers a number of industry-specific modules to enhance pre-existing ERP systems and processes, both native and third-party. In addition to their generally supportive roles, each module is built with regulatory and industry preferences in mind. These industry modules proactively mitigate risks and boost ROI potential as the company grows and scales. Examples of industry modules include:

• IS-H: Healthcare.
• IS-RE: Real Estate.
• IS-A: Automotive.

6. Technical modules.

SAP technical modules provide infrastructure for each functional module to support ongoing development, management, and system administration.

They also enable module customization and accessibility across industries to increase the value and evergreen nature of the SAP ERP system as a whole. Examples of SAP technical modules include:

• EP: Enterprise Portal.
• SAP Solution Manager.
• PI: Process Integration (formerly called SAP-XI).

7. Other modules.

While SAP does not currently have an exclusive finance industry module, it does offer an entire library of sub-modules for financial services companies, such as insurance companies, financial institutions, consumer credit unions, and banks. These models use an “FS” prefix instead of the “IS” industry-specific nomenclature. Financial services modules include:

• FS-CML: Consumer, Corporate Mortgage Loans.
• FS-CD: Collection & Disbursement.
• FS-RI: Reinsurance.

The top 7 in-demand SAP modules.

1. SAP FICO for financial accounting & controls.

The SAP financial accounting module (SAP FICO) combines two key areas of functionality: financial accounting and controlling. The “FI” component of the hybrid delivers the necessary financial reporting and management capabilities to track all financial transactions and financial statements, while the “CO” element monitors and plans organizational costs. Its holistic nature makes the SAP FICO module a critical component of financial supply chain management for any business.

2. SAP IM for investment management.

Every business benefits from budgetary organization and planning. The SAP IM module centralizes capital investment and expense management, and lays the foundation for a financial organization that aligns with strategic goals.

3. SAP SRM for supplier relationship management.

SAP SRM — supplier relationship management — helps businesses master procurement and inventory functions. It directly and comprehensively connects companies with supplier pools for more efficient, productive company-vendor relationships. In addition to its managerial function, SAP SRM optimizes procurement cycles and offers advanced reporting, which allows companies to successfully forecast critical metrics up and down the supply chain.

4. SAP FI for financial accounting.

The SAP financial accounting (FI) module supports regulatory compliance, financial reporting, and analysis. While SAP has a dedicated business intelligence tool (SAP-BI), many businesses use SAP FI’s insights to make judgment calls regarding operational efficiency and performance management. Users appreciate that it’s comprehensive enough to track all transactions between suppliers and customers, yet user-friendly enough to mitigate any serious learning curves.

5. SAP CO for controlling.

SAP CO is the second, independent half of the SAP FICO business management software. It strategizes, executes, and tracks all consumption points to enhance production planning, sales, and distribution channels.

6. SAP SD for sales & distribution.

The sales and distribution (SD) SAP module is a storage area for product- and customer-related data. It freely integrates with other modules in the SAP software system and gives businesses the insights to streamline and optimize all sales processes, such as billing, shipping, and invoicing.

7. SAP BI for business intelligence.

SAP BI handles business data management and reporting. It simplifies, visualizes, and shares data, giving teams the metrics and accessibility they need to take action. The tool features a flexible, lightweight database that scales to the size of your team up to 10,000.

The main advantages of SAP modules

SAP modules are a favorite of global enterprises — and for good reason. Each module is comprehensive, inbuilt with a strategic integration process that allows each to begin where the other ends. This structure creates a smooth flow of information to eliminate information silos and redundancies.

Along with the traditional SAP ERP modules, the software also has a number of industry-specific solutions for additional customization and insights. This, in addition to the program’s strong security features and updates, makes SAP a standout software system for a wide range of use cases and business needs.

Drawbacks of working with SAP modules.

As with any software tool, there are some drawbacks to consider before you invest in SAP modules for your business. Some of the most common include:

• Costs: SAP’s comprehensive nature is reflected in its price point, and it may be cost-prohibitive for smaller enterprises.
• Customization barriers: SAP is extremely customizable. However, if your business requires a proprietary structure, you may face limitations unless your tech team is fluent in the SAP ABAP programming language.
• Complexity: SAP is more complex than other software options available on the market and easy to overengineer. Transitioning from legacy systems will likely lead to significant learning curves and process changes. The result is a significant change management requirement.
• User adoption: For certain modules that are used more broadly by all employees, like expense reporting and reimbursement, and employee spending using corporate cards or for purchase orders, more user-friendly, agile, and intuitive systems that can be easily adopted across the whole organization are often a better choice for many companies.

How to get started with SAP modules.

The SAP ecosystem is extensive. Unlike other software tools that are plug-and-play, SAP recommends that users take its foundational knowledge courses to understand the business benefits, functionalities, and role of each module. This preparation allows you to choose the precise models that align with your business needs.

Looking for a comprehensive accounts payable platform that integrates with your SAP ERP? Check our complete guide to the top AP solutions for enterprises.

FAQ.

What are the modules in SAP?

SAP has functional modules like FI (Finance), CO (Controlling), MM (Materials Management), SD (Sales and Distribution), HR (Human Resources), and technical modules like ABAP and BASIS.

What does SAP stand for?

SAP stands for Systems, Applications, and Products in relation to business operations.

What’s the difference between SAP ERP and SAP SE?

SAP ERP (Enterprise Resource Planning) is a comprehensive software suite that integrates core business processes like finance, logistics, HR, and more. SAP ERP is made by SAP SE (Societas Europaea), a German multinational corporation headquartered in Walldorf, Germany that specializes in enterprise software to manage business operations and customer relations.

Which module is best in SAP?

The best SAP module for your business depends on your organizational goals and operational needs. For managing financial processes, SAP FICO (Finance and Controlling) is essential. If your focus is on streamlining procurement and inventory, SAP MM (Materials Management) can optimize these workflows.

Businesses with a strong emphasis on sales and customer relationships benefit from SAP SD (Sales and Distribution), while SAP HCM (Human Capital Management) is ideal for enhancing HR operations. Assess your business objectives and choose the module that aligns with your priorities for efficiency and growth.