SAP is a decade into the lifecycle of its current enterprise resource planning solution, SAP S/4HANA, but many SAP customers have yet to make the move from their legacy system.
There are only a couple of years remaining until SAP ends maintenance on the SAP Enterprise Central Component (SAP ECC) solution; while some customers will opt to stay on the older system into the 2030s, many are preparing to make the move to SAP S/4HANA before the deadline hits.
This will require a period of relearning SAP, as the company has drastically reframed how it does business with SAP S/4HANA. This includes a purposeful move to the cloud for peripheral functionality, and the organization of “lines of business” in the core SAP S/4HANA system that replaces the traditional SAP module structure that SAP ECC users are used to.
Want to save this infographic? Click on it to download!
In this blog post, we’ll look at the major modules of SAP ERP, discuss what they covered in the SAP ECC solution, and share how they fit into the SAP S/4HANA product offering. Let’s get started!
Below, we’ll quickly introduce the SAP modules those running SAP ECC (or SAP R/3, etc.) are used to working with.
The financial accounting module of focused on the legal side of finances; that is, maintaining accurate ledgers and preparing financial statements for yearly reporting mandates. Key financial statements like the balance sheet, income statement, and cash flow statement were handled by those working with the FI module.
In contrast to financial accounting, the controlling module focused on the managerial side of finances. Those working with the CO module would make decisions on things like product pricing, intercompany accounting, and diversification.
The SAP Treasury and Risk Management module allowed financials users to manage cash, liquidity, financial risk, and investment portfolios, while also staying in compliance with all relevant legal regulations. This helped to optimize cash flow and manage debt. Components such as Cash Management, Risk Management, Transaction Manager, and Hedge Management existed within SAP TRM.
In contrast to SAP TRM, the SAP Investment Management module focused on managing capital investments and project funding. This allowed organizations plan and monitor capital expenditure projects, better manage budgeting and approval, and handle long-term planning.
The SAP Financial Supply Chain Management module focused on the tasks that are undertaken to improve the financial wellbeing of the business, particularly in the order-to-cash and purchase-to-pay cycles. This helped to optimize working capital and keep cash reserves plentiful.
The SAP Supply Chain Management module helped businesses meet market demand. Those using SAP SCM would plan stock levels, manufacture products from raw materials, fulfill orders, transport finished products, and collaborate with suppliers and other vendor partners, among other tasks. Submodules like SAP Advanced Planning and Optimization existed within the SAP SCM module.
The SAP Supplier Relationship Management module focused on the procurement process and the different stakeholders involved. This included monitoring and measuring the efficiency of suppliers and vendors, tracking procurement activities, sourcing assignment of orders, managing contracts and invoices, and more.
The SAP Materials Management module referred to the business processes of procurement; that is, involved in managing the flow of materials from the supplier to the manufacturer, followed by the manufacturer maintaining sufficient inventory at its end to ensure a smoother supply chain.
The SAP Warehouse Management module was a set of functionalities focused on providing inventory accuracy, optimized utilization of warehouse space, and streamlined picking and putaway. It focused on inbound, outbound, and internal processing of stock. An extended version SAP WM, called SAP EWM, was also part of the SAP WM module in the later years of SAP ECC’s lifecycle.
The SAP Production Planning module was used as a way for companies to benefit from historical data to prepare a forecast that could then be used in sales, operations, materials, and production.
The SAP Plant Maintenance module (also known as SAP Enterprise Asset Management) focused on maintaining an organization’s physical infrastructure throughout its lifecycle, from acquisition through operations to decommissioning.
The SAP Quality Management module gave users ways to manage the output quality of their products. This included inspections, quality notifications, managing batches and samples, and more.
The SAP Transportation Management module referred to the business processes involved in managing the transfer of goods from suppliers or vendors to customers.
The SAP Product Lifecycle Management module focused on the products a business offers from conceptualization to sunset. Operations such as portfolio planning, research and development, and manufacturing were considered tasks to complete with SAP PLM.
In contrast to SAP PLM, the SAP Project System module supported management of individual projects: mapping development, planning, budgeting, controlling, and invoicing, among other tasks.
The SAP Sales and Distribution module helped users manage their sales activities at all stages of the process, from inquiries to contracts to shipping to billing to returns.
The SAP Customer Relationship Management module focused on customer management. This included areas such as marketing, sales, service, and e-commerce.
The SAP Human Capital Management (HCM) module, sometimes referred to as SAP Human Resources Management, focused on core HR functions such as personnel administration, organizational management, payroll, and time management. Submodules such as Manager Self Services and Employee Self Services existed with SAP HCM.
SAP also provided a number of industry-specific solutions for those needing specialized functionality. This included options for automotive, healthcare, retail, telecom, real estate, and oil & gas businesses. They typically employed the prefix IS, followed by a specific module letter—for example, IS-M for media companies.
With the advent of SAP S/4HANA, SAP ECC modules were reorganized into “lines of business” (LoB) that better match business operations. Let’s dive into each.
The SAP S/4HANA Finance LoB focuses on all money-related activities of a business. This includes financial accounting, controlling, treasury and risk management, financial planning, financial close, and consolidation.
SAP S/4HANA Finance functionality encompasses the FI, CO, TRM, IM, and FSCM legacy modules. Other SAP solutions related to finance, such as SAP Billing and Revenue Innovation Management and SAP Analytics Cloud, are not included with SAP S/4HANA licenses but are available for purchase to supplement the core system.
Those that don’t want to move all of their business operations to SAP S/4HANA but want to take advantage of the benefits of SAP S/4HANA Finance may find the Central Finance deployment option attractive. This implements SAP S/4HANA Finance alongside your existing ERP stack.
The SAP S/4HANA Sourcing and Procurement LoB focuses on the activities surrounding the obtainment of raw materials needed to fulfill orders. This includes extended procurement, operational purchasing, and supplier and contract management.
SAP S/4HANA Sourcing and Procurement functionality encompasses the SRM and MM legacy modules. Other cloud SAP solutions related to sourcing, like SAP Ariba and SAP Fieldglass, are not included with SAP S/4HANA licenses but are available to supplement the core system.
The SAP S/4HANA Manufacturing LoB focuses on the product creation process. This includes responsive manufacturing, production operations, scheduling and delivery planning, and quality management.
SAP S/4HANA Manufacturing functionality encompasses the PP and QM legacy modules.
The SAP S/4HANA Supply Chain LoB focuses on overall business planning activities, from pre-planning production runs to dispatching products to purchasers. This includes production planning, batch traceability, warehousing, inventory, and transportation management.
SAP S/4HANA Supply Chain functionality encompasses the TM, EWM, and PP legacy modules.
The SAP S/4HANA Asset Management LoB focuses on the maintenance of a business’ fixed assets, from tools and machinery all the way up to buildings. This includes plant maintenance and EHS monitoring.
SAP S/4HANA Asset Management functionality encompasses the PM legacy module.
The SAP S/4HANA Sales LoB focuses on the activities associated with the fulfilling sales orders. This includes pricing, sales inquiries and quotes, sales contracts and agreements, free-of-charge orders, available-to-promise checks, incompletion checks, repair orders, individual requirements, return authorizations, credit and debit memo requests, picking and packing, billing, and revenue recognition.
SAP S/4HANA Sales functionality encompasses the SD and CRM legacy modules.
The SAP S/4HANA R&D LoB focuses on the lifecycle of a product. This includes defining the product structure and bill of materials, product lifecycle costing, managing portfolios and projects, managing innovation, managing chemical data and other sensitive materials used in development, and staying compliant with safety and health regulations.
SAP S/4HANA R&D/Engineering functionality encompasses the PLM legacy module.
You’ll notice that a number of modules listed in the SAP ECC section were not listed again in the SAP S/4HANA section. This is not because SAP has moved away from providing that business functionality, but rather because SAP has baked it into the core SAP S/4HANA solution or provided peripheral solutions (like SAP Ariba and SAP Fieldglass were for S&P) to accomplish those tasks. Below is a list of the “missing” pieces and how SAP S/4HANA solves for them.
As SAP ECC approaches its end of life, transitioning to SAP S/4HANA is not just about upgrading technology; it's about transforming how businesses operate in the digital age. By reorganizing traditional SAP ERP modules into streamlined lines of business, SAP S/4HANA delivers a more integrated, intelligent, and cloud-enabled platform. Understanding where the familiar SAP ERP modules fit within this new landscape can help organizations plan their migration and take advantage of enhanced capabilities across finance, supply chain, manufacturing, and more. Whether it's through leveraging embedded functionality or integrating external cloud solutions, SAP S/4HANA offers businesses a future-proof ERP system designed to thrive in a constantly evolving digital economy.