SAP RoadmapSAP S/4HANA CloudSAP Implementation - GreenfieldSAP Industry SolutionsRISE with SAPGROW with SAPSAP for new customersSAP Central FinanceSAP Group ReportingSAP Analytics CloudSAP software for your supply chainSAP SuccessFactors HCMSAP EWMSAP Fiori app developmentSAP developmentSAP SecuritySAP Data TransformationSAP data migrationSAP AMSChange ManagementEducation Management
With the introduction of SAP S/4HANA, fundamental terminology has also changed. While previous SAP ERP software was divided into modules, this is no longer the case with the current SAP S/4HANA system. Today, we are talking about Lines of Business (SAP LoB).
Unlike in previous SAP ERP solutions, however, the terminology and structure no longer only applies to the core ERP system.
This article examines the SAP S/4HANA Lines of Business (LoB), compares them with the previous term SAP ERP modules and brings clarity to the topic.
What are the SAP S/4HANA Lines of Business (SAP LoB)?
What are the SAP S/4HANA Lines of Business (SAP LoB)?
SAP Lines of Business (SAP S/4HANA LoB or SAP LoB for short) are the structural elements in SAP S/4HANA.
The best way to translate “Line of Business” is “business area”. This translation also describes very well what a Line of Business is: Each SAP LoB comprises business processes and functions for a specific business area of a company. An SAP LoB is therefore a logical structural unit or grouping of S/4HANA. However, SAP does not limit the use of LoB terminology to the SAP S/4HANA software.
In the SAP ECC system, a module was a functional building block. With SAP S/4HANA, SAP has now organized the entire product portfolio into Lines of Business. Accordingly, all SAP products are assigned to one or more LoBs. This applies both to the functions that are available in the SAP S/4HANA basic system and to licenses that can be purchased. However, cloud services or standalone systems such as SAP Ariba or SAP CX are also organized in LoBs. The Lines of Business are therefore structural elements that structure not only SAP S/4HANA, but the entire SAP product portfolio.
Important to know: In SAP ERP and ECC, the structural elements were referred to as modules. Although the term persists, it is no longer part of the software manufacturer's official terminology in SAP S/4HANA.
What lines of business are there in SAP S/4HANA and what do they contain?
What lines of business are there in SAP S/4HANA and what do they contain?
Since the release of SAP S/4HANA, new lines of business have been continuously added to the software. Today (as of 2024), the on-premises version of the system comprises the following LOBs
- Asset Management
- Finance
- Human Resources
- Manufacturing
- R&D and Engineering
- Sales
- Service
- Sourcing and Procurement
- Supply Chain
These SAP S/4HANA business areas are described in more detail below.
Asset Management
Asset Management
LoB Asset Management deals with the maintenance of a company's assets (fixed assets). In addition to machinery, equipment and tools, these assets also include buildings and land. Asset Management includes functions for the maintenance and servicing of production facilities (Plant Maintenance).
The functions of this LoB were covered in earlier SAP ERP solutions with the Plant Maintenance (PM) module.
Finance
Finance
Finance was the first Line of Business in SAP S4/HANA and is also one of the most comprehensive business areas. LoB offers functions relating to all financial aspects in a company. This includes financial accounting (including the general ledger), accounts receivable and accounts payable, controlling, profitability analysis, financial planning and analysis, treasury, risk management, consolidation and financial statements.
In previous SAP ERP solutions, finance was covered by the Financial Accounting (FI), Controlling (CO) and Treasury (TR) modules.
Human Resources
Human Resources
SAP LoB Human Resources provides all the necessary processes and functions for human resources management. These include personnel administration, payroll, time and attendance management and self-service access options to HR data for employees. These functions are not included in the SAP S/4HANA core system.
In previous SAP ERP solutions, HR administration was covered by the SAP Human Capital Management (HCM) module.
Manufacturing
Manufacturing
This SAP S/4HANA Line of Business bundles all important applications and scenarios relating to production. The central functions are production planning and control (PPC), manufacturing execution and quality management.
Functions for production were provided in previous SAP ERP solutions by the Product Planning (PP) and Quality Management (QM) modules.
R&D and Engineering
R&D and Engineering
The R&D and Engineering division provides companies with all relevant features relating to product lifecycle management, i.e. the management of the product lifecycle. This includes functions for defining product structures and parts lists, revisions, costing, project and portfolio management and investment management. This line of business also supports compliance with product-related health and safety regulations.
Project management functions were provided in previous SAP ERP solutions by the Project System (PS) module.
Sales
Sales
SAP LoB Sales combines all the important functions for sales. Classic tasks such as calculation, quotations, orders and invoicing are supported.
However, CRM, customer service and commerce are not part of this SAP business area. If you want to cover these sectors, you also need SAP C/4HANA (formerly SAP Hybris). This is SAP's CRM suite, which bundles solutions from the areas of customer experience (CX), marketing, customer relationship management (CRM) and e-commerce. SAP C/4HANA is deeply integrated with the Sales LoB in S/4HANA and therefore fits seamlessly into the system landscape.
Sales functions were provided by the Sales & Distribution (SD) module in previous SAP ERP solutions.
Service
Service
This LoB aims to solve customer problems quickly and provide a highly personalised service in order to increase customer satisfaction. Important functions include service order management, the interaction centre (customer communication across multiple channels) and the management of services, including documentation and billing.
In previous SAP ERP solutions, functions in this business area were located in the Sales & Distribution (SD) module.
Sourcing and Procurement
Sourcing and Procurement
Sourcing and Procurement supports business processes in the areas of procurement and purchasing. The functions of the former MM (Material Management) and SRM (Supplier Relationship Management) modules have been transferred to this SAP LoB and expanded. Purchasing and procurement processes can be mapped end-to-end with the module. All processes are closely interlinked with the neighbouring Supply Chain, Manufacturing and Finance LoBs. The most important functions of these LoBs include supplier and material group management, ordering, contract management, spend analyses and the management of supplier invoices.
In previous SAP ERP solutions, these functions were provided via the Material Management (MM) module.
Supply Chain
Supply Chain
Diese SAP S/4HANA Line of Business nutzen Unternehmen, um ihre Lieferkette zu gestalten, zu überwachen und zu optimieren. Besonders relevant ist die LoB daher für die Branchen Industrie und Handel. Ziel ist eine Optimierung aller Aktivitäten entlang der gesamten Supply Chain – von den Lieferanten über die Produktion bis hin zum Endkunden. Dabei fließen kontinuierlich wichtige Informationen wie Absatzprognosen, Produktionsplanung und Bedarfsplanung ein.
Das Modul Warehouse Management (WM) hat SAP-ERP-Lösungen die Funktionen für die Lieferkette bereit gestellt.
How do the LoBs in SAP S/4HANA differ from the modules in SAP ERP?
How do the LoBs in SAP S/4HANA differ from the modules in SAP ERP?
In previous SAP versions, the functional areas were referred to as modules. This has changed with the introduction of SAP S/4HANA. Since then, the software group has no longer organized its ERP software into modules, but has instead divided the entire product portfolio into lines of business with the introduction of SAP S/4HANA. This does little to change the basic approach of dividing applications, functions and processes into areas that make business sense.
The functions of the classic modules from SAP ECC still largely exist. They can now be found in various places in S/4HANA. The following overview provides information on how the core modules have been reassigned:
Previous module in SAP ERP | New Line of Business in S/4HANA |
Sales & Distribution (SD) | Sales, Service |
Material Management (MM) | Sourcing and Procurement, Supply Chain |
Product Planning (PP) | Manufacturing |
Quality Management (QM) | Manufacturing |
Plant Maintenance (PM) | Asset Management |
Financial Accounting (FI) | Finance |
Controlling (CO) | Finance |
Treasury (TR) | Finance |
Project System (PS) | R&D and Engineering |
Warehouse Management (WM) | Supply Chain |
SAP Human Capital Management (HCM) | Human Resources |
What will change with the division into LoB instead of modules?
What will change with the division into LoB instead of modules?
The new structure changes relatively little for users. From a technical perspective, however, the change from modules to lines of business is by no means trivial. This is because SAP S/4HANA has been given a completely new solution architecture in this context. In contrast to the classic module structure, this is now much more strongly oriented towards business processes in companies.
In some cases, functional areas that were previously combined within one module have been split across several LoBs. This includes purchasing and inventory management, which were previously combined in the MM module. In SAP S/4HANA, purchasing is now located in the Sourcing and Procurement LoB, while inventory management has been moved to the Supply Chain business unit.
There are also modules that did not even exist in the core of SAP ECC and were only available in the extended functional area of the SAP Business Suite. One example of this is SAP EWM (Extended Warehouse Management). This can be found in SAP S/4HANA in the “Supply Chain” LoB. The same applies to PLM (Product Lifecycle Management), which has been transferred to the “R&D and Engineering” LoB.
The implementation of SAP S/4HANA therefore provides companies with an ERP system that is significantly more process-oriented than its predecessors SAP ECC and SAP R3. This underlines SAP's approach of increasingly mapping, digitalizing, optimizing and automating processes end-to-end with SAP S/4HANA.
What are SAP modules?
What are SAP modules?
SAP modules are the functional building blocks of the SAP R/3 and ECC systems. Each SAP module contains specific features and processes that are assigned to a particular business area, such as financial accounting, materials management, or sales and distribution.
The modular architecture of SAP software enables companies to implement only those SAP modules that they need to map their business. Although the modules appear to be independent, they are closely interlinked. This enables a seamless, cross-departmental flow of information and collaboration on a common, consistent database. This networking is at the heart of the enterprise resource planning (ERP) concept pursued by SAP.
As mentioned at the beginning, the familiar SAP modules were converted to LoB (Line of Business) in the course of the new S/4HANA product generation. Due to the continuing popularity of the old terminology, however, we will take a closer look at the classic modules in the SAP environment in this article.
What SAP modules are available?
What SAP modules are available?
There are a whole range of modules in SAP systems. Each of these has a specific name and an abbreviation (usually consisting of two letters). The following overview lists all modules in SAP ECC with their most important tasks:
SAP Module FI – Financial Accounting: external accounting, general ledger accounting, balance sheet accounting, and profit and loss accounting
SAP Module CO – Controlling: internal cost accounting, product cost planning, and income statement for corporate management
SAP Module MM – Materials Management: control of the entire material flow, procurement, warehousing
SAP Module SD – Sales and Distribution: handling of all sales activities, from quotation creation to invoicing and shipping
SAP Module PP – Production Planning: planning, control, and monitoring of manufacturing processes and capacities
SAP Module PM – Plant Maintenance: Management and implementation of maintenance and repair measures for technical equipment
SAP Module QM – Quality Management: Ensuring product and process quality through testing and certification
SAP HCM module – Human Capital Management: Management of all HR processes such as payroll accounting, time management, and personnel development
SAP PS module – Project System: Planning, control, and monitoring of complex projects with budget and schedule management
SAP TR module – Treasury: Management of cash flows, liquidity, and financial risks
Was sind die gefragtesten SAP Module?
Was sind die gefragtesten SAP Module?
Besonders häufig werden SAP-Systeme in den Bereichen Finanzwesen, Controlling, Logistik, Materialwirtschaft, Vertrieb und Produktion eingesetzt. Entsprechend sind die Module FI/CO, MM, SD, PP und PM besonders gefragt. Nachfolgend werden diese Bausteine näher beschrieben.
What is the SAP MM module?
What is the SAP MM module?
The SAP Material Management Module (SAP MM) is SAP's inventory management system. It is particularly important for manufacturing and trading companies.
The MM SAP module supports the entire process of material procurement and management. It also ensures efficient warehousing and inventory management by guaranteeing the availability of materials while optimizing storage costs.
It is closely linked to other functional areas such as the SAP SD module to ensure a continuous process from determining requirements to paying the invoice.
The most important functions of the MM SAP module are:
Purchasing: Handling of the entire procurement process, from purchase requisition to order placement.
Inventory management: Management of warehouse stocks and all goods movements (goods receipt, stock transfer, goods issue).
Invoice verification: Comparison of invoices with purchase orders and goods receipts.
Material master data: Central management of all relevant information on materials.
What is the SAP SD module?
What is the SAP SD module?
The SAP SD (Sales and Distribution) module maps the entire sales process. This begins with the customer inquiry and ends with the goods issue and invoicing.
SAP SD is particularly important for order processing and customer relationship management. Integration with the SAP Material Management Module (SAP MM) ensures that ordered goods are available and that the logistical steps run smoothly.
The most important functions of SAP SD are:
Quotation and order management: Entry and processing of customer orders
Pricing: Automatic determination of prices, discounts, and surcharges
Shipping and transport: Planning and control of goods delivery
Invoicing: Creation of invoices and credit notes
What is the SAP PP module?
What is the SAP PP module?
The SAP PP (Production Planning) module is responsible for production planning and control.
It is aimed at all companies that manufacture products. SAP PP ensures that production runs efficiently and on schedule by planning material and capacity requirements. It uses master data such as bills of materials and work plans to optimize the manufacturing process and achieve high utilization of production resources.
The most important functions of SAP PP are:
Demand planning (MRP): Determination of material requirements based on sales orders and inventory levels.
Capacity planning: Balancing demand with available machine and personnel resources.
Production order processing: Control and monitoring of ongoing production.
Master data management: Maintenance of bills of materials and work plans.
What is the SAP PM module?
What is the SAP PM module?
The SAP PM (Plant Maintenance) module was created for the maintenance and servicing of technical equipment and operating resources. It helps companies maximize the availability of their machines and production facilities and minimize unplanned downtime.
The module manages all processes related to inspection, maintenance, and repair. It thus makes an important contribution to reducing operating costs and ensuring production quality.
The most important functions of SAP PM are:
Maintenance planning: Planning of preventive maintenance measures
Notification processing: Recording and processing of malfunctions and damage reports
Maintenance order processing: Control of repair and maintenance work
Plant structure: Management of technical locations and equipment
What SAP HCM modules are available?
What SAP HCM modules are available?
SAP systems are not only used in the aforementioned areas of business, but also frequently in human resources management. This is where SAP HCM (Human Capital Management), formerly known as SAP HR, comes into play. This functional area is divided into several submodules, which together cover all processes from personnel administration to personnel development.
The most important SAP HCM modules are:
PA – Personnel Administration: Management of employee master data and personnel files
PY – Payroll: Processing of salary and wage accounting
PT – Personnel Time Management: Recording and management of working hours, absences, and shift schedules
PD – Personnel Development: Promoting employees through development plans and target agreements
PE – Event Management: Planning and controlling training measures and qualifications.
OM – Organizational Management: Mapping the company structure, organizational units, and positions
What modules are available in SAP SuccessFactors?
What modules are available in SAP SuccessFactors?
SAP SuccessFactors is SAP's cloud-based solution for human resources management – and a popular alternative to SAP HCM. It is a suite of several integrated SAP Cloud Modules that cover the entire employee lifecycle.
The most important modules in SAP SuccessFactors are:
EC – Employee Central: Core module for HR master data management and organizational structure
RCM – Recruiting Management: Management of the entire recruitment process, from job posting to acceptance
ONB – Onboarding: Support for new employees as they join the company
PM/GM – Performance & Goals Management: Setting goals and conducting performance reviews
LMS – Learning Management System: Management of training and learning content for employee development
CMP – Compensation: Planning and managing compensation and variable salary components
WFP – Workforce Planning: Strategic personnel planning and analysis of personnel requirements
PR – Employee Central Payroll: Solution for payroll accounting
