Deciphering SAP – Part I. SAP Modules and End-to-End Processes

by | 13 Sep 2020

Ever read an SAP job opening and felt like if it was written in “whale” language? You are not alone. Working in SAP for many years sometimes doesn’t make the language any less confusing. This is partly because there are a significant number of domains of expertise inside SAP. Inherently, many acronyms are used to refer to them. However, that is not the worse bit. It is when you think that you finally mastered all of them, then… Surprise! Some names have been changed. To be fair, SAP is evolving constantly, enhancing, and improving their portfolio. Inevitably, this means new terms and acronyms.

Explaining everything in a single post could be like writing the Bible. That is why I decided to create a trilogy for “Deciphering SAP”. In these series of posts, I attempt to decipher for you the SAP areas of expertise. I don’t want people to loose the will to live when reading those SAP job role e-mails. The areas of expertise in SAP have been divided in three groups:

  1. SAP Modules and End-to-End processes: These are areas of expertise inside the Core ERP of SAP (this post).
  2. Add-ons: The standard SAP functionality can be extended with add-ons, but they need to be activated, they are not installed by default. I talk about them in the second post of the trilogy.
  3. Other SAP Products: Besides the Core ERP, SAP enhanced its product portfolio by creating products in-house. Additionally, it acquired products from other small competitors. These products can be integrated with the Core ERP. However, they can run as standalone solutions or integrated with other applications. I review them in the third post of the trilogy.

Before I start listing acronyms, let me start with a brief introduction.

In January 2006, my younger self was starting a career as an SAP consultant. As a complete newbie, conversations by the office coffee machine with colleagues made me question if we spoke the same language. They used acronyms like SD, MM, FI… I remember taking a mental note in order to check afterwards what they meant. After years of going through acronyms I could be forgiven for feeling like a rock star. However, I was brought back down to Earth listening to relatively new terms like OTC, PTP, RTR… A colleague later made me understand that these were other ways to refer to SD, MM, FI… I discovered much later that this is not 100% accurate and these acronyms are being applied wrongly in industries even today. They actually refer to End-to-end processes, which I will cover later in this post. According to this new way to refer to the modules, you can find the module SD (Sales and Distribution) being referred by some people as OTC, OTI, QTI, QTC, CTC, CTI and more. Are you shocked? There is more. You know that English speakers like to play with the language, writing “2” instead of “to”. It is not uncommon to see those terms referred as O2C, O2I and so on. To sum up, a single module such as SD can be referred to as OTC, O2C, OTI, O2I, QTI, Q2I, QTC, Q2C, CTC, C2C, CTI, C2I… May the force be with us in our mission of deciphering the SAP language and the job openings.

The goal of this post is to provide you, in my view, an overview of the most popular SAP modules. Additionally, I will review the concept of End-to-End processes and why I think it is wrong to use them in a job opening. For now, let’s start from the beginning.

SAP Modules

Image: Modules inside the SAP Core ERP

  • FI stands for Finance. This is the most fundamental module in SAP, remember that SAP R/1 started being a financial software. It is the basis for the rest of the modules. FI is used to manage all the financial data in an organization (collections, payments, taxes, banks, treasury…). Financial Accounting module provides the capability to obtain the real-time financial situation of an enterprise.
  • MM stands for Material Management. This is a logistics module for all the procurement activities and inventory management of an organization. It can be applied to choose the best supplier for goods, or to ensure that the warehouse is stocked as required. In addition, it is used for product cost calculation for merchandises.
  • SD stands for Sales and Distribution. This module deals with selling, shipping, and billing of goods and services. It provides the capability to manage the contracts, price agreements, rebates and more. In addition, it is used to calculate an accurate delivery date when for a sales order.
  • PP stands for Production Planning. It is used to plan and organize the production processes to cover the needs of a company. Product cost planning for produced materials is also undertaken in PP.
  • HCM (Human Capital Management) or HR (Human Resources). From recruitment and training through to payroll, this modules is used by the human resources department to manage employees efficiently.
  • ABAP stands for Advanced Business Application Programming. ABAP is a high-level programming language created by SAP for use in their products. ABAP is the main language of SAP. However, other languages such as Java are used for integration solutions and portals.
  • CO stands for Controlling. This module provides capability to plan, track, perform and report the costs of all processes in an organization.
  • PS stands for Project System. It is used to handle the full cycle of planning and execution of projects.
  • WM stands for Warehouse Management. As the name suggests it is used in processing the goods movements and managing the stocks in a complex warehouse. This module is becoming more important with the use of the intelligent warehouses. SAP developed a more sophisticated product to manage warehouses and called it EWM (extended-Warehouse Management). Since the version 1610 of S/4HANA, EWM is embedded in the Core ERP. Embedded doesn’t mean included in the basic licence of the Core ERP.
  • PM stands for Plant Maintenance. This module is used in all the maintenance activities in an organization: preventive maintenance, repairs and all the activities to improve the technical system.
  • CS stands for Customer Service. This module is used to deal with the after sales processes for customer equipment like: warranties, repairs required, bill the services provided…
  • QM stands for Quality Management. Quality control processes are undertaken in QM. This includes quality inspections to prevent defects and improve processes. This is mainly used in food business, manufacturing processes, …

This is a very quick overview for each module, each of them has several sub-modules and a significant degree of complexity.

You may be thinking that I forgot to mention modules like CRM, BI, BW, PI… I have not forgotten them. They are part of the third post of the trilogy. This is because they are not included as part of the Core ERP. They are commercialized as a different product.

SAP End-to-End Processes

This is also referred to as E2E processes. An End-to-End process is essentially the full lifecycle of all the activities in a business process within a company. For example, OTC (Order-to-Cash) refers to the activities starting from when the customer calls to make an order until the company receives the money for that sales order. This includes steps like delivery and shipment.

Image: Order-to-Cash Process. Source: SAP Documentation 

Is it correct to say OTC consultant in a job specification when you are actually looking for an SD consultant? Personally, I would say no. Those descriptions could be misleading. I was previously hired for an OTC consultant role but later discovered that they managed contracts and quotations. For those who don’t know, a contract or a quotation always happen before a sales order is created. Since the job role required management of contracts and quotations, perhaps QTC (Quotation-to-Cash) or CTC (Contract-to-Cash) were more appropriate descriptions. However, the “C” stands for Cash. Normally the competence of an SD consultant ends when the invoice is transferred to accounting, not when the company receives the money. That is competence of the FI consultants. They take over the process from the sales invoice until it is converted to cash. In my experience, when companies are hiring an OTC, they are in fact hiring an OTI (Order-to-Invoice), QTI (Quotation-to-Invoice) and CTI (Contract-to-Invoice) consultant. Why they don’t just advertise for an SD consultant remains a mystery.

To make things even more confusing, there are some “E2E” acronyms that refer to different business processes depending on the context in which they are used. For example, MTO could mean “Make to Order” (PP area) or “Market to Order” (CRM area).

After all this explanation, please find below a few End-to-End processes.

  • Financial area (FI):
    • RTR or R2R – Record to Report
    • ATR or A2R – Acquire to Retire for Fixed Assets
    • ATR or A2R – Accounting to Reporting
  • Material Management area (MM):
    • PTP or P2P – Procure to Pay
    • STP or S2P – Source to Pay
  • Sales and Distribution (SD):
    • OTC or O2C – Order to Cash
    • QTC or Q2C – Quotation to Cash
    • CTC or C2C – Contract to Cash
  • Production Planning (PP):
    • ATO or A2O – Assemble to Order
    • MTO or M2O – Make to Stock
    • PTM or P2M – Plan to Manufacture
  • Human Capital Management (HCM)
    • HTR or H2R – Hire to Retire

If you know any other SAP acronyms for E2E processes, you can help others leaving a comment below. Let’s fight together to decipher the SAP language.

About the author:

Cristina Gil Gallo

Cristina Gil Gallo

Cristina specializes in SAP SD consulting holding a certification in S/4 HANA Sales On Premise. She started her career in SAP in 2005. She is particularly interested in international projects. She holds a BSc in Industrial Engenieering from the Universidad Politécnica de Valencia.
ReadCristina's Full Bio

You may also like:

No Results Found

The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.

6 Comments

  1. joaquin barrio

    Very good entry, thanks! Also, you can include in this world of acronyms the “SAP Solutions” (also I have seen them mentioned as “applications”) like PLM, CRM, SRM, SCM…

    Reply
    • Cristina Gil Gallo

      Thanks so much Joaquín for the possitive feedback! Really appreciated. Because the SAP acronyms list is huge, I decided to split the post and I do a quick overview of other SAP products in this other post. I only mention there some of the ones you say. I hope you can find that other article also interesting.

      Reply
  2. Erni

    Hi Cristina – thank you so much for this article. I’m handling another system which requires integration with the SAP system – and these SAP members are throwing to me all the jargons and interchanging their usage, which confuses me. Your article has clarified them for me. thank you 🙂

    Reply
    • Cristina Gil Gallo

      Hi Erni! Thanks so much for leaving a positive comment! It is really rewarding when I see that I can help others. I encourage you to read the other posts of the trilogy, you can find more acronyms there that may be you are listening in your project. Cheer up, you will soon become an SAP expert!

      Reply
  3. MB

    Great article , may thanks Cristina ! Could you give the link to the SAP documentation where the figure is taken from ? We may so look for the other E2E process decomposition into subprocesses

    Reply

Feel free to leave a comment

Follow the blog by e-mail

About the author:

Cristina Gil Gallo

Cristina Gil Gallo

Cristina specializes in SAP SD consulting holding a certification in S/4 HANA Sales On Premise. She started her career in SAP in 2005. She is particularly interested in international projects. She holds a BSc in Industrial Engenieering from the Universidad Politécnica de Valencia.
ReadCristina's Full Bio

You may also like:

Join Sapsapiens community

Don't miss any post and receive exclusive content only for subscribers

Thanks for your interest! You have been successfully subscribed!

Únete a la comunidad de Sapsapiens

No te pierdas ninguna publicación y recibe contenido exclusivo sólo para suscriptores.

¡Gracias por tu interés! Pronto recibirás un e-mail de bienvenida

Join Sapsapiens community

Don't miss any post and receive exclusive content only for subscribers

Thanks for your interest! You have been successfully subscribed!

Únete a la comunidad de Sapsapiens

No te pierdas ninguna publicación y recibe contenido exclusivo sólo para suscriptores.

¡Gracias por tu interés! Pronto recibirás un e-mail de bienvenida

Share This
%d bloggers like this: