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App Development
7 minutes read

What Does SAP ECC Stand For?

By Robert Kazmi
By Robert Kazmi
App Development
7 minutes read

Have you ever wondered, what does SAP ECC stand for? SAP ECC has been one of the leading enterprise resource planning (ERP) software solutions for many years. It gives decision-makers the ability to make business decisions based on real-time data. However, the true strength of SAP ECC is that it helps organizations optimize key business processes at the core of their operations. 

In today’s modern business world, organizations need to ensure that their web services and physical business processes are connected to ensure positive outcomes for customers and key stakeholders. So let’s better understand what SAP ECC is and how organizations benefit from this HiTech enterprise software. 

What is SAP ECC?

SAP ECC stands for SAP enterprise resource planning (ERP) central component. This central component integrates digital information from all of the various areas of an organization in real-time, so decision-makers can get a holistic view of the entire organization’s operations and make decisions based on this information. 

For example, suppose a sale is made in one business area. In that case, SAP ECC updates the data in all other affected areas of the business, such as inventory and materials. SAP ERP central component is the base layer of the SAP Business Suite. Business Suite also includes SAP CRM (Customer Relationship Management) and SCM (Supply Chain Management) software. 

Generally, SAP ECC is used by large or medium-sized organizations. SAP ECC includes various components that can be implemented to handle specific business processes. 

SAP ECC Functional Components 

SAP components, or modules as they are sometimes called, are part of the ECC program that has been developed to handle specific tasks or business processes. SAP ECC includes ten core components

To access the functionality of a component, it must be implemented. In some cases, you may need to ensure that your components are integrated to achieve optimal performance. An app development partner can help ensure that your components are optimally implemented and integrated. 

Another important note on SAP ECC components is that your organization might not need to implement all ten. For example, some businesses may only want to implement a few of these components as needed, while others might want to implement all ten. 

The ten core components of SAP ECC are:

  • Sales and Distribution (SD)
  • Materials Management (MM)
  • Financial Accounting (FI)
  • Production Planning (PP)
  • Quality Management (QM)
  • Controlling (CO)
  • Customer Services (CS)
  • Project System (PS)
  • Plant Maintenance (PM)
  • Human Capital Management (HCM)

Sales and Distribution (SD)

This SAP ECC component gives organizations tools to handle almost every aspect of sales and distribution. The sales and distribution component covers product or service sales in national and international markets, whether it be through direct sales or a distribution network.

The SD component also provides tools for processing customer returns, billing, and credit issuance. 

Materials Management (MM)

The materials management component covers procurement and inventory tasks. Organizations procure materials from several different vendors locally, nationally, and in many cases, internationally. Material management also helps organizations track inventory. 

Inventory management includes goods issuance, receipts, and the transfer of inventory or materials from one business location to another. The MM component of SAP ECC also allows users to count and reconcile physical inventory. 

Financial Accounting (FI)

The accounting component records all of an organization’s transactions. For example, transactions occur with vendors and customers, and this component logs all transactions in one place for simple retrieval and viewing. Accounting also covers receivables from sales, cash management, payables from procurement, reconciliation, and banking fees. 

The larger, more complex an organization is, the more transactions will occur. Therefore, it is crucial to keep every transaction neatly organized, and the accounting component in SAP ECC makes that job much more manageable. 

Production Planning (PP)

Planning manufacturing requires data insights and accurate demand forecasting. The planning component includes tools that help organizations align customer demand with manufacturing capacity. Accurate planning is an essential facet of a manufacturer’s supply chain. 

Accurate planning tools for production have been a focus of web and mobile app development projects for many years. SAP ECC’s planning component offers organizations a potent tool. 

Quality Management (QM)

Quality assurance is a significant concern for organizations. The QM component can help organizations find the root cause of product failure. However, finding the cause of a product failure can be lengthy and costly. Therefore, speeding this process up is a significant advantage. 

The QM component is most effective when integrated with sales, production, materials, and site maintenance. This component can also assist in managing internal and external audits of business processes.

Controlling (CO)

The controlling component handles cost center accounting, profit center accounting, and internal orders. This component can also help with financial planning since it offers a product costing feature that allows organizations to compare actual and simulated costs. As a result, this component can be a considerable asset to manufacturing businesses. 

In some cases, accounting and controlling components might be lumped together. In this case, it would be listed as FICO or FI-CO. If these components come paired in your SAP ECC core system, you are not losing any functionality. 

Customer Services (CS)

This component is only valuable to organizations providing service and maintenance to equipment that a customer owns. The CS component allows organizations to bill customers and keep track of maintenance schedules. This is an essential component for businesses that employ a fleet of repair professionals. 

Project System (PS)

The project system component of SAP ECC was built to manage large, complex projects. For example, if your organization is setting up a new plant or manufacturing site, this component is a valuable tool. This component covers everything project-related, from procurement to production costs, to ensure that your project stays on schedule and on budget. 

Plant Maintenance (PM)

With the aid of IoT devices, the site maintenance component monitors and tracks key machinery and systems like boilers or freezers. The site maintenance component ensures everything is running properly. It can even send alerts when maintenance is required, or issues are detected to prevent failure or disruption to your business processes. 

Human Capital Management (HCM)

The final core component of SAP ECC is designed to handle all human resource-related needs. For example, the HCM component can handle payroll, time off, holiday calendars, employee training, and more. In large organizations with many employees, this component makes managing everyone’s needs and benefits much easier. 

The Future of SAP ECC

SAP has been one of the leaders in enterprise resource planning software for many years. The latest version recently developed and released is SAP S/4HANA. The difference between SAP ECC and HANA is that HANA is a cloud-based ERP system that allows organizations to get the same great service provided by SAP ECC on the cloud instead of on-premise. 

SAP HANA is the future of SAP ECC. However, organizations that handle sensitive data or are more concerned with data security can still choose to use an on-premise ERP solution instead of the cloud. If you’re struggling with SAP ECC vs. HANA, speak with an experienced partner who can help your organization make the best choice. 

Final Thoughts

SAP ECC is a powerful ERP system that organizations can benefit greatly from. However, SAP is not the only ERP provider. If your business is looking for a great ERP solution but doesn’t know how to choose the right one, reach out to an app development partner

A partner can help you gauge the pros and cons of each solution and weigh them against your needs. Plus, implementing ERP software and integrating components can be a difficult task to handle on your own. A custom development partner can help you implement the ERP system of your choice, whether it is SAP ECC or another solution. Now that you know more about this powerful ERP, you won’t have to ask, what SAP ECC stands for again. 

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