ERP :FUNCTIONAL

MODULES
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BUSINESS
PROCESS
INTEGRATION

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ENTERPRISE MODULES / APPLICATIONS WITH TIME
1st Generation ERP 2nd Generation ERP Enterprise Next Generation Enterprise
Applications Applications with Multiple
Platforms
Finance & Accounts Warehouse Management CRM
Usage of RFID,
e, m, l – commerce,
Productions Service Management SRM Cloud Computing,
SOA Architecture, SMAC,
Procurement & Inventory Transportation PLM Pervasive Computing
Management

Sales & Marketing Industry

Solutions
Quality Management

Human Resource
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 SAP ERP BUSINESS MODULES
Collections of logically related transactions within identifiable business
functions

MM (“Buy”)
Production Planning PP (“Make”)
SD (“Sell”)
FI and CO (“Track”)
HCM (“People”)
WM (“Store”)
CS (“Service”)
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Main Functional SAP ERP Modules
1. FICO (Finance & Controlling)
2. HR (Human Resource)
3. PP (Production Planning)
4. MM (Material Management)
5. SD (Sales & Distribution)
6. PM (Plant Maintenance)
7. PS (Project System)
8. QM (Quality Management)
9. BIW (Business Information Warehousing)

Business Suite
1. CRM (Customer Relationship Management)
2. SCM (Supply Chain Management)
3. SEM (Strategic Enhanced Management)
4. APO (Advanced Planner Optimizer)
5. EP (Enterprise Portal)
6. SRM (Supplier Relationship Management) 5
HIRE TO RETIRE (H2R) PROCESS Chapter 20 (Ray Book)

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HR SUB-MODULE
1. Personnel Management:
(HR master data, Personnel administration, Recruitment, Travel management, Benefits
administration, Salary administration)
2. Organizational Management:
(Organizational structure, Staffing schedules, Job descriptions, Planning Scenarios,
Personnel cost planning)
3. Payroll Accounting:
(Gross / net accounting, History function, multi-currency capability)
4. Time Management:
(Shift planning, Work schedules, Time recording, Absence determination)
5. Personnel Development:
(Career and succession planning, Profile comparisons, Qualifications assessments,
Additional training determination, Training and event management)
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HIRE TO RETIRE PROCESS (H2R PROCESS)

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 Modules Benefits
Recruitment • Completely e-recruitment
Management •Use of Internet (website, portals)
Module • Automating all record keepings
•Better collaboration between recruiters and hiring managers

BENEFITS Transaction • Reporting like productivity analysis, overtime, labour costs, attendance, time
FOR Intensive (Time, off etc. could be easily produced.
HUMAN Attendance, etc) •Absence with reasons, leave relate policy could be achieved
CAPITAL
MANAGE Compensation • Support flexible workflow with multiple levels of approvals and alerts to
Management enforce compliance of compensation with company’s policy, budgets and
MENT Module profitability goal.
•automatic bonus calculations and rewards

Talent • support online performance management process

Management / • ERP package can track user progress against goals etc. It also support goals
Performance to be linked to a balanced scorecard and data from other systems can be
Management integrated into the scorecard.
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 HR Analytics Area Typical KPIs/ Reports
Recruitment • Cost per hire
• Time to fill vacant positions
• On boarding efficiency

Attendance and Leave • Attendance %

Management • Unapproved leave % with drilldown
HUMAN CAPITAL Compensation • Salary comparison with industry benchmarks
MANAGEMENT • Salary increase %
ANALYTICS • Number of promotions in a year, % Growth, etc.

Learning Management • Average number of training days per employee

• Number of “no show” cases i.e. employee registered, but not
appeared on the training day
• Training feedback
• Training budget

Employee Relationship • Portal usage rate

Workforce Scheduling • Workforce utilization
• Number of rescheduling cases 10
EMPLOYEE HEALTH AND SAFETY AREA: EMERGING
AREAD
INDUSTRIAL HYGIENE AND SAFETY OCCUPATIONAL HEALTH

Risk Assessment of different tasks or Full scale health management to

different work areas and creating individual employees
exposure logs
Medical processes for workers can be
Incident Management managed based on their exposure, injury
or illness.
Safety management

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FICO MODULE Chapter 21 (Ray, Book)

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 FINANCIAL ACCOUNTING: MANAGEMENT ACCOUNTING

 General Ledger (GL): all business trans. Profit Center Accounting

 Accounts Receivable (AR): customer Cost Centre Accounting and Budgeting
acctg.
Project Accounting and Budgeting
 Accounts payable (AP): vendor acctg.
 Asset Accounting: fixed assets wrt Product Cost Accounting
Closely work with production management module
deprc.
Helps in calculating cost of goods manufactured or
 Contract Accounting cost of goods sold with details like cost of raw
 Bank Accounting material, cost of manufacturing etc.
 Cash Journal Accounting Transfer Pricing
 Inventory Accounting
 Tax Accounting

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 FINANCIAL SCM
Self service portal for customer
Collections Management
Collections from customer happen on time
Credit Management
Helps to manage credit limits to customers
Dispute Management
TREASURY MODULE
Cash and Liquidity Management
Manage cash flow and liquidity as well as do
cash forecasting
Financial Risk Management
Ensure adherence to regulatory compliance and
financial reporting standards
Managing Bank Interactions
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 FI MODULE: SAP TERMINOLOGY
Manage financial accounting data
 Within an international framework
 Multiple companies, currencies, and languages
Mainly deals with the following financial components
 AA – Asset Accounting
 AP – Accounts Payable
 AR – Accounts Receivable
 BL – Bank Accounting
 FM – Funds Management
 GL – General Ledger Accounting
 LC - Legal Consolidations
 SL – Special Purpose Ledger
 TM – Travel Management
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 CO MODULE: SAP TERMINOLOGY
Controlling: term by which SAP refers to "Managerial Accounting"
Provides reports on cost & profit centres, contribution margins, profitability, etc.
Components of CO:
 Cost Element Accounting
 Cost Controlling
 Cost Centre Accounting
 Internal Orders
 Activity-Based Costing
 Product Cost Controlling
 Profitability Analysis
 Profit Centre Accounting

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SALES AND DISTRIBUTION (SD) Chapter – 26 (Ray, Book)
PROCESS
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 SALES & DISTRIBUTION MODULE
SD can monitor a plethora of activities that take place in an organization such as

• products enquires,
• quotation (pre-sales activities),
• placing order,
• pricing,
• scheduling deliveries (sales activity),
• picking, packing,
• goods issue,
• shipment of products to customers, delivery of products and billings.

In all these processes, multiple modules are involved such as FI (Finance

Accounting), CO (Controlling), MM (Material Management), PP (Production
Planning), LE (Logistics Execution), etc., which shows the complexity of the
integration involved.
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 SD: MASTER DATA
Customer Master Data
Customer Master General Data (Name, address, Payment , tax, etc.)
Customer Master Sales Area Data (Order, Shipping, Billing document, etc.)
Customer Master Company Code Data ( Account management, Payment Methods, etc.)

Material Mater Data

Basic Data about material
Sales from Org 1 (delivering plant, tax, material group)
Availability, checks, inventory etc.

Condition Master Data

If specific conditions related to tax or surcharges / prices

Route Master for Transportation

Actual transit time, etc. 20
ORDER TO CASH (O2C) PROCESS
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ORDER TO CASH PROCESS FLOW

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SAP OTC (ORDER TO CASH) PROCESS FLOW
SAP OTC is a process involved customer sales order creation and satisfying
customer requirements via delivery.

Generally steps are as follows:

Customer Inquiry
Quotation for customer inquiry
Sales Order creation
Post Goods issue (PGI)
Delivery
Billing- Bill sent to customer
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PROCURE TO PAY (P2P) PROCESS Chapter 22 (Ray, Book)

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 P2P PROCESS
BENEFITS:

• Tightening integration and

collaboration with vendors
• Increasing transaction-processing
accuracy
• Reducing costs
• Faster dispute resolution
• Provided continuous updated
documents to support the compliance
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 P2P ACTIVITIES INVOLVED-
Requisition: A buyer recognizes a need and places a request for goods or services.
Authorization : Each requisition made by a buyer gets routed to an appropriate approval agent.
Purchase Order : Once a requisition is approved, a purchase order is created and automatically
delivered to the supplier(s).
Receipt of Goods: Once goods are received, the buyer issues or confirms a receipt of such goods to the
supplier.
Invoice: After a supplier prepares goods for shipment, an invoice is created that denotes the individual
goods ordered by SKU and the amounts being charged.
Reconciliation: Are the charges for the right goods or services? Are the amounts the contracted amounts?
Were the quantities correct?
Payment: payment is scheduled and made using an appropriate payment method, which could be p-card,
electronic funds transfer, etc
Analysis: After a number of procurement cycles have been completed, it is important to take
measurements of the efficiency and accuracy of the procurement process.
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MATERIAL MANAGEMENT (MM)
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MATERIAL MANAGEMENT MODULE

Material Management deals

with movement of materials
via other modules like
logistics, supply chain
management, sales and
delivery, warehouse
management, production and
planning.

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MATERIAL MANAGEMENT:ACTIVITIES
INVOLVED
Pre-purchasing Activities
Purchasing
Vendor Evaluation
Inventory Management
Invoice Verification and Material Inspection

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 MM MODULE
MM (Material Management): core module of the logistics functionality of SAP

Integrates closely with other SAP modules

 SD (Sales and Distribution), PP (Production Planning), FI (Finance), CO (Controlling)

Contains key functions of SAP:

 Purchasing, Inventory Management and Goods Receipt

Creation and maintenance of Master Data:

 Material Master, Vendors and Purchasing Info Records

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