COMPLETE MODULES OF SAP ERP

1. Basis
2. ABAP/4 Programming
3. FI (Financial Accounting)
4. CO (Controlling)
5. EC (Enterprise Controlling)
6. TR (Treasury)
7. IM (Investment Management)
8. HR (Human Resource)
9. SD (Sales and Distribution)
10. Logistics Information System
11. MM (Materials Management)
12. PM (Plant Maintenance)
13. PP (Production Planning)
14. QM - Quality Management
15. BW (Business Warehousing)
16. IS (Industry Solutions) / SAP for Industries specific solutions
17. CS (Customer Service)
18. SMB
19. CA (Cross Application Components)
20. PS (Project Systems)
21. mySAP SEM
22. mySAP CRM (Customer Relationship Management)
23. mySAP Product Life Cycle Management
24. SCM (SAP Supply Chain Management)
25. Netweaver
26. mySAP SRM (Supplier Relationship Management)

1. What is ERP

Many key business applications are now implemented using comprehensive and
complex Enterprise Resource Planning (ERP) software. ERP software facilitates
the flow of information among all the processes of an organization’s supply chain,
from purchases to sales, including accounting and human resources. Process
thinking is a key element in this business restructuring, differing from previous
approaches with traditional application "silos", where departments within a
company operated with poor interaction with other departments. ERP software
eliminates the common problem of multiple incompatible software systems and
databases in use in the departments or functional areas of many corporations.
With one integrated comprehensive system (which could be distributed
internationally) with one database, processes run more smoothly with up to date
information availability throughout the corporation.

It is important for students to gain an understanding of the impact of ERP

solutions in business today. Every business area is affected; implementing ERP
systems in a corporation is a complex undertaking and has been likened to the
effort required in merging two companies together.

ERP products are available from several vendors, including SAP AG, PeopleSoft,
J.D. Edwards and Oracle. The ERP software market leader is SAP AG with the
SAP R/3 System.

There is great demand in industry for people that are knowledgeable about ERP
and specifically about SAP R/3 System. The following sections present an
introduction to SAP R/3 and other SAP products that work together with R/3 or
may be separate products.

2. SAP R/3 Functionality

R/3 software allows the integration of all of a company’s business operations in

an overall system for planning, controlling and monitoring. Over 1000 ready-
made business processes are available, that include best business practices that
reflect the experiences, suggestions and requirements of leading companies in a
host of industries. New features are continuously being added to releases of R/3.

SAP R/3 System provides an integrated suite of business applications that

covers a full range of processes used in almost any business. The main
application groupings are:

 Logistics
 Financial/Management Accounting and Reporting
 Human Resources
 Cross-Application Functions

The following sub-sections list the main applications and some of their
components.

2.1 Logistics

 Logistics General (LO)

Logistics General integrates the manufacturing and distribution functions

for Sales and Distribution, Production Planning, Materials Management,
Plant Maintenance and Quality Management. The following components
are included:
o Logistics Information System (LO-LIS)
 o Master Data (LO-MD)
o Forecast (LO-PR)
o Variant Configuration (LO-VD)
o Engineering Change Management (LO-ECH)

 Materials Management (MM)

A material can also be a person or a service. The MM application supports

manufacturing, distribution and service industries:
o Material Requirements Planning (MM-MRP)
o Purchasing (MM-PUR)
o Inventory Management (MM-IM)
o Warehouse Management (MM-WM)
o Invoice Verification (MM-IV)
o Information System (MM-IS)
o Electronic Data Interchange (MM-EDI)

 Sales & Distribution (SD)

This includes sales, shipping, and billing. It actively supports sales and
distribution activities with functions for pricing, prompt order processing,
and on-time delivery, interactive multilevel variant configuration, and a
direct interface to Profitability Analysis and Production.
o Master Data (SD-MD)
o Basic Functions (SD-GF)
o Sales (SD-SLS)
o Shipping (SD-SHP)
o Billing (SD-BIL)
o Sales Support (SD-CAS)
o Information System (SD-IS)
o Electronic Data Interchange (SD-EDI)

 Production Planning (PP)

This involves the planning and control of manufacturing activities,

including make-to-order or repetitive manufacturing.
o Basic Data (PP-BD)
o Sales and Operations Planning (PP-SOP)
o Master Planning (PP-MP)
o Capacity Requirements Planning (PP-CRP)
o Material Requirements Planning (PP-MRP)
o Production Orders (PP-SFC)
o Product Costing (PP-PC) (which is also CO-PC Product Costing)
o Kanban/Just-in-Time Production (PP-KAB)
o Repetitive Manufacturing (PP-REM)
 o Assembly Orders (PP-ATO)
o Production Planning for Process Industries (PP-PI)
o Plant Data Collection (PP-PDC)
o Information System (PP-IS)

 Quality Management (QM)

This module provides quality planning, inspections, certificates,

notification. It monitors, captures, and manages all processes relevant to
quality assurance along the entire supply chain, coordinates inspection
processing, initiates corrective measures, and integrates laboratory
information systems.
o Planing Tools (QM-PT)
o Inspection Processing (QM-IM)
o Quality Control (QM-QC)
o Quality Certificates (QM-CA
o Quality Notifications (QM-QN)

 Plant Maintenance (PM)

The Plant Maintenance module provides planning, control, and processing

of scheduled maintenance, inspection, damage-related maintenance, and
service management to ensure availability of operational systems,
including plants and equipment delivered to customers.
o Equipment and Technical Objects (PM-EQM)
o Preventive Maintenance (PM-PRM)
o Maintenance Order Management (PM-WOC)
o Maintenance Projects (PM-PRO)
o Service Management (PM-SMA)
o Plant Maintenance Information System (PM-IS)

2.2 Accounting

 Financial Accounting (FI)

This application enables the company to publish legally required financial

documents, and includes the following modules:
o General Ledger (FI-GL)
o Accounts Receivable (FI-AR)
o Accounts Payable (FI-AP)
o Legal Consolidation (FI-LC)
o Special Purpose Ledger (FI-SL)

 Controlling (CO)
 The following modules are integrated with FI and are used to better control
a business:
o Overhead Cost Control (CO-OM)
o Product Costing (CO-PC)
o Activity-Based Costing (CO-ABC)
o Sales and Profitability Analysis (CO-PA)
o Project Control (CO-PRO)

 Enterprise Controlling (EC)

o Executive Information System (EC-EIS)

o Business Planning (EC-BP)
o Management Consolidation (EC-MC)
o Profit Center Accounting (EC-PCA)

 Treasury (TR)

The Financial Accounting module provides treasury functions, but the

following are more specialized:
o Treasury Management (TR-TM)
o Funds Management (TR-FM)
o Cash Management (TR-CM)
o Market Risk Analyzer (TR-MRM)

 Capital Investment Management (IM)

o Tangible Fixed Assets (IM-FA)

o Financial Investments (IM-FI)

 Project System (PS)

This module accommodates all types of research and development

projects. It coordinates and controls all phases of a project, in direct
cooperation with Purchasing and Controlling, from quotation to design and
approval, to resource management and cost settlement.
o Basic Data (PS-BD)
o Operational Structures (PS-OS)
o Project Planing (PS-PLN)
o Approval (PS-APP)
o Project Execution/Integration (PS-EXE)
o Information System (PS-IS)

2.3 Human Resources (HR)

The Human Resources module includes administration, payroll

accounting, shift management, employee attendance, trip costs, training,
 and recruitment. It provides solutions for planning and managing the
company’s human resources, using integrated applications that cover all
personnel management tasks and help simplify and speed the processes.

 Personal Planning and Development (HR-PD)

o Organizational Management (PD-OM)
o Seminar and Convention Management (PD-SCM)
o Personnel Development (PD-PD)
o Workforce Planning (PD-WFP)
o Room Reservations Planning (PD-RPL)

 Personnel Administration (HR-PA)

o Employee Management (PA-EMP)
o Benefits (PA-BEN)
o Compensation Administration (PA-COM)
o Applicant Management (PA-APP)
o Time Management (PA-TIM)
o Incentive Wages (PA-INW)
o Travel Expenses (PA-TRV)
o Payroll (PA-PAY)

2.4 Cross-Application Functions

 Business Workflow (WF)

The Business Workflow module contains functions that can be used in all
application components, linking the integrated application modules with
cross-application technologies, tools and services. A typical example of a
business process that can be actively controlled using SAP Business
Workflow is the complete processing of a customer order from its receipt
through delivery of the goods and issuing the invoice. You can automate
all the steps in this business process and define all the roles of the
appropriate employees. You can check a customer’s credit line and
creditworthiness, query the stock on hand, and automatically place an
order. Clerical staff can process the individual work items in a working
environment familiar to them, request information on the current status of
specific workflows at any time, and trace the history of the work process.
All these functions can also be accessed through the Internet.

 SAPoffice

This provides electronic mail messaging for users and also by SAP
applications.
 Business Warehouse (BW)

The Business Warehouse provides management reporting, including non-

SAP data sources into reports. This independent data warehouse solution
summarizes data from R/3 applications and external sources to provide
executive information for supporting decision making and planning.
Reports cover a wide range of information requirements, automated data
staging, and standard R/3 business process models.

 Industry Solutions (IS)

Industry Solutions combine the R/3 application modules and additional

Industry specific functionality. The following are some of the industries for
which modules have been developed:
o Aerospace & Defense
o Automotive
o Banking
o Chemicals
o Consumer Products
o Engineering & Construction
o Healthcare
o High Tech & Electronics
o Higher Education & Research
o Insurance
o Media
o Mill Products
o ining
o Oil & Gas
o Pharmaceuticals
o Project Oriented Manufacturing
o Public Sector
o Retail
o Service Provider
o Telecommunications
o Utilities

 International Development (INT)

Users in different countries have different needs regarding currency, legal

requirements, and commercial practice. The components for different
regions are:
o Asian and Pacific Area (IN-APA)
o Europe (IN-EUR)
o North America (IN-NAM)
o Africa/Middle East (IN-AFM)
o South America (IN-SAM)
3. New Dimension Products

New Dimension Products can stand alone or be integrated with R/3. Some
components are included in the above R/3 list; the following are components of
New Dimension Products:

 Supply Chain Management (SCM)

SAP Advanced Planner and Optimizer (APO) is a tool for planning,

optimizing, and scheduling software applications that enable the
integration and synchronization of the supply chain on a global scale, from
suppliers, agents, and production planners, to purchasers, customers and
consumers.

 Business Information Warehouse

This has been mentioned above.

 Business-to-Business Procurement

This enables inter-enterprise procurement, including the creation and

maintenance of requisitions, purchase orders and reservations with or
without electronic catalogs, approval and rejection, desktop receiving and
service entry, status and tracking, invoicing, and performance
reporting functions. All end users are able to purchase goods and services
straight from their workplace.

 Corporate Finance Management (CFM)

This is a comprehensive package for managing financial resources, and

analyzing and optimizing business processes in the finance area of a
company.

 Customer Relationship Management (CRM)

CRM provides a solution that enables companies to effectively manage

customer relationships throughout the entire lifecycle, understanding as
well as anticipating the needs of customers and prospects.

 Knowledge Warehouse

This is the cornerstone of SAP’s Knowledge Management solution for continuous

knowledge transfer and life-long learning. It contains a repository for storing
content and includes the tools to create, modify, distribute, and administer that
content. The SAP HR components Personnel Development (PD) and Training
and Event Management (TEM) provide functionality together with the Knowledge
Warehouse. The Knowledge Warehouse provides unstructured information; the
Business Information Warehouse provides structured data.

 Strategic Enterprise Management ( SEM)

SEM includes the following components:

o Business Consolidation (BCS) provides functionality for financial

consolidation and value-based accounting.
o Business Planning and Simulation (BPS) provides functionality
to support integrated strategic and operational business planning.
These functions include the creation of dynamic and linear
business models, simulation of various scenarios, evaluation of
these scenarios taking account of the business risks, resource
allocation as part of business planning, and rolling forecasting.
o Corporate Performance Monitor (CPM) provides support for the
definition, analysis, visualization, and interpretation of key
performance indicators.
o Business Information Collection (BIC) provides functionality for
automated and semi-automated collection of structured and –
especially – unstructured business information from internal and
external sources. This includes an automatic search for relevant
business information in the Internet, and the structuring of any
information found.
o Stakeholder Relationship Management (SRM) provides
functionality to support the stakeholder communication process: the
stakeholders are informed regularly and systematically about the
business strategy and its effects on their stakeholder value. In
addition, the component helps to collect feedback from
stakeholders in a structured manner, and then to pass this on to the
other components (SEM-CPM and SEM-BPS).

4. SAP R/3 Architecture

The SAP Business Framework is a family of SAP and non-SAP products. It is an

open, integrated, component-based enterprise business application solution for
companies of any size in any industry. Business Framework provides flexibility in
setting up enterprise-critical distributed IT systems using independent
components. The R/3 System is an evolving family of application components,
that can be combined into an integrated, continuously maintainable network
solution regardless of the release of the components. Business Framework is an
open design, allowing integration of components from third-party vendors.
The SAP R/2 System was developed to run on mainframe computers; SAP R/3
System has been developed to run with a distributed multi tier client/server
architecture. SAP R/3 can be configured to run on a single computer, or it can be
distributed among many different machines at different locations. There is a clear
distinction between the presentation, application, database, and Internet-enabling
layers.

The presentation layer is the user interface, and a number of different graphical
user interfaces (GUIs) can be used. SAPGUI is SAP’s own user interface
software (in over 20 different languages), but Microsoft Windows or Internet
browser interfaces can be used in its place. Other examples of interfaces are
kiosk systems, and telephone answering systems.

Application servers contain the complete business process logic of R/3

applications. These application servers can run on Windows NT systems, major
UNIX operating systems, and AS/400 systems. A number of different application
servers can be connected in a network, distributed geographically.

The database layer manages both the R/3 System application components and
the enterprise’s working data. This task is performed using relational database
management systems. Supported are IBM DB2, Informix Online, Microsoft SQL
Server, and Oracle. Database servers can be on different servers from the
application servers, and can include mainframes, Windows NT, UNIX or AS/400.
The industry standard SQL (Structured Query Language) is used for defining and
manipulating all data. Applications are fetched from the database as required,
loaded into the application layer, and then run from there.

SAP also has an Internet layer (with access through a Web server) that works
with System R/3 that enables a corporation to couple its systems with customers
and vendors. Employees can access the system over the Internet or intranet,
customers can place orders, and vendors can access their customers’
warehouse data to schedule deliveries just in time. See mySAP.com below,
which is central to SAP’s internet strategy.

SAP Application Link Enabling (ALE) is used to manage widely distributed,

loosely coupled systems, based on an exchange of messages controlled by
business processes. Individual companies in a corporation can distribute their
transaction workloads where data are distributed, while a common service is
offered throughout the network. Individual tasks can be distributed across
locations. The systems involved can be different R/3 systems or non R/3
systems. With ALE, applications are integrated using asynchronous
communications mechanisms.

The R/3 System offers standard interfaces to enable integration of R/3 with the
processes and data of business applications from other vendors. These object-
oriented interfaces are called business application programming interfaces
(BAPIs). BAPIs are compatible with Microsoft’s Distributed Component Object
Model (COM/DCOM) specifications and the Object Management Group’s
Common Object Request Broker (CORBA) specifications.

R/3 applications are modules that can be used alone or combined with other
solutions. R/3 is scalable and can be used with from 30 to several thousand
users.

Popular desktop programs such as MS Word, MS Excel, and MS Project can be

linked to R/3 applications. Electronic Data Interchange (EDI) between companies
is also part if R/3.

The BASIS System is the fundamental software within R/3. Application modules
listed above in SAP R/3 Functionality are added as needed.

ABAP is the SAP programming language that is used in the application modules.
Custom programming with ABAP is possible for add on modules (but the
standard SAP modules should not be modified).

5. mySAP.com and the Internet

mySAP.com is SAP’s term for its Internet offering and strategy. The mySAP.com
portals are ways of accessing all of the services and benefits afforded by this
strategy. mySAP.com is an open collaborative business environment of
personalized solutions. According to SAP, it is a comprehensive basket of
offerings that includes Internet-enabled applications, such as the Web-enabled
core components of SAP R/3.

mySAP.com will be the interface to all SAP products: collaborative, front office,
and back office. SAP’s vision is to continue to provide complete, integrated
solutions. Users of all the software solutions will access their applications via the
easy-to-use Workplace on their desktop. All of the applications will continue to
work in an integrated fashion.

mySAP.com integrates seamlessly with existing R/3 functions, users of

mySAP.com need not have R/3 installed, and R/3 can be used without
mySAP.com. If R/3 is installed, then mySAP.com would sit on top of the R/3
applications.

mySAP.com is intended to incorporate all current SAP products in the form of

components. From Release 4.6 on, R/3 will be a mySAP.com component.
mySAP.com can interoperate with R/3 from Release 3.1 on. Earlier R/3 releases
can be connected on a project basis.

R/3 Release 4.6 is also called the EnjoySAP Release with a new interface that
has made SAP software easier to learn, tailor and use.
The mySAP.com Workplace provides personal access to the business
environment. It is a customizable, Web-enabled doorway into R/3, offering
additional functions and services beyond the core R/3 functions. In addition, it
provides integration with other ERP solutions and non-ERP information sources
including financial market data, news tickers, and industry-specific content.

The mySAP.com Workplace is tailored to individuals, companies, and industries.

It makes the business solutions, knowledge, and services they need in their daily
business activities readily available. The users, through their browsers, can
access functionality that is most relevant to their roles, and then configure their
personal desktops to suit their individual work styles. The following are provided,
or being developed:

 Access to business solution applications

 Access to internal corporate information, reports, press releases
 Access to services available on the Internet
 Access to any user applications
 Access to the mySAP.com Marketplace

The mySAP.com Marketplace is actually two things. It is the infrastructure that

supports many SAP collaborative Business Scenarios, allowing many buyers and
sellers to come together to exchange goods, services, and information. It is also
the name currently used to describe the Web portal that SAP hosts
at http://marketplace.mySAP.com. Anyone can access and use the Marketplace
via www.mySAP.com. Buyers as well as sellers can leverage the Marketplace
without the need for any SAP software.

The personalized Workplace is the employee enterprise portal, the Marketplace

is the global e-business hub.

A Business Scenario offers the specific knowledge, functions, and services that
one or more users may need to succeed in a business task. mySAP.com
provides a host of e-business solutions, including purchasing, collaborative
planning, employee self service, direct customer servicing, and inter-
business knowledge management. Business Scenarios will provide access to all
R/3 and SAP New Dimension functionality.

SAP has introduced the Internet Business Framework, which uncouples the
integration technology from the development language and runtime. This means
that the software module that calls a certain service need not be written in the
same language as the software module that provides the service. Rather, the
software providing the service can be implemented in virtually any language.

SAP also provides mySAP.com Application Hosting, where the IT services are
outsourced to a hosting partner, with access to SAP products.
6. SAP R/3 Custom Configuration & Implementation

Implementing R/3 requires a team of IT specialists and business users. For the
enterprise, this can result in business process re-engineering: less supervisory
levels, better flow of information between business units, and a new business
organizational structure. The process can be ongoing – change can be
continuous. Applications from R/3 are usually implemented gradually in a
progressive implementation, rather than everything implemented at once.

The R/3 System is highly configurable to suit the operations of the enterprise.
SAP has provided tools to model business processes, configure the system, and
manage the process.

The R/3 Procedure Model provides guidance through the different project phases
step by step (from project generation to going live). A wide range of tried-and-
true, graphically portrayed business scenarios and processes are stored in the
R/3 Reference Model, from which the best possible processes can be chosen.
The R/3 Procedure Model uses the following tools:

 IMG (Implementation Management Guide) of R/3 – acts as a project

management system, providing a plan of activities. It recommends a
sequence for configuring and customizing the system, and supports
documenting the project.

 SAPoffice – stores, edits text and graphical information. It also links to

standard PC office products such as word processing and spreadsheets.
 Business Navigator - provides a graphical view of business processes and
functions.

The R/3 Analyzer is a set of tools for selecting from the R/3 system the standard
business programs that are needed for a particular enterprise. The results can be
displayed in a graphical or list form. R/3 Analyzer prompts users to perform steps
in the proper order.

The R/3 Reference Model is a tool that is provided to support configuration

activities. It contains over 1,000 business processes that describe the functions
of the R/3 System, and provides over 100 basic business scenarios. Five views
are provided by the Reference Model:

 Process view – a network of event-driven process chains

 Function view – a summary display of the business functions required of
R/3
 Information flow-view – for information flow between event-driven process
chains
 Data view – clusters of data structures required for the business
processes
  Organization view – the relationships between the organizational units of
the enterprise

The configuration that is chosen by the users is represented by parameters in

tables; the R/3 tools create the tables as the users specify their requirements,
without the need to modify any software. Requirements that are not available in
the standard R/3 Reference Model are documented by the tools, but must be
programmed with the ABAP/4 language (with the ABAP/4 Development
Workbench). Thus the enterprise can extend, and have their own version, of the
R/3 Reference Model.

With Release 4.0, a business component can be implemented independently of

the release of R/3. Thus the entire system does not need to be implemented or
upgraded simultaneously.

SAP has also provided AcceleratedSAP (ASAP) as a methodology and tools for
more rapid implementation of R/3. With Release 4.0, the Business Engineer
draws upon the Reference Model to provide guidance through the
implementation, in analyzing, designing and configuring the business processes.
The Business Engineer can be used in a graphical or tabular form and is the
recommended method of implementing or maintaining R/3.