Jon Reed on SAP Consulting

Which SAP Functional Module is the Hottest? A JonERP.com Exclusive

Which SAP Functional Module is the Hottest?
A Ranked List by Jon Reed of JonERP.com
Published: September 2008

For the first time ever, I am ranking all the core modules from hottest to least hot. I'm not going to count Business Suite
applications; I'll cover them in a separate piece down the road. Before you read this list, I recommend reading my full
disclaimer about my SAP hot skills rankings, which has some crucial skills tips as well.

Just remember one thing: sometimes what is hot is not a particular module, but which combination of modules are used.
For example, MM and PP are not as hot as some areas, but taken together as "Logistics" with a bit of SD thrown in, they
can be very hot. Then there are areas like Project Systems (PS), which are not necessarily super hot but are definitely
good niches.

Your background goes a long way towards determining what you should be pursuing - not just what's hot. In addition,
within a particular module, some areas are much hotter than others. The SAP version number you are working in also
has a lot to do with what's hot. ERP 6.0 skills are much hotter than 4.6c across the board.

With that in mind, let's have a look at some of the hottest modules in SAP, ranked in terms of their relative consulting
demand:

1. FI/CO (Financials) - Driven by the core upgrades, Financials is still the hottest thing going in the "functional module"
arena. I now divide SAP Financials into three areas: Financials (FI), Controlling (CO), and "value added" components. In
the core Financials area, you really need that ERP 6.0 upgrade experience. Good old "Accounts Payable" may not be the
hottest thing, but when you have the new General Ledger under your belt, now you're talking. The New GL ties into
increased activity on global reporting and compliance, driven by SAP's multi-lingual reporting capabilities. It is now
possible to really have a top-down GL structure that integrates parallel lines of subledgers in real time. This is a good skill
to have, and compliance-based reporting is yet one more reason why the SAP Financials demand ranks the highest. The
"Controlling" areas (CO module) are also in demand. Many of these areas involve the costing of various aspects of your
company's operations, and analyzing profit and loss by segment and product is very much in demand. SAP has been
honing its CO components for years, and the functional areas in CO are robust and also start to dovetail into BI/SEM,
which is not a bad skill to have on the resume either.

We're also seeing some definite demand for the FI/Travel Management piece, now that this has crossed over from HR.
In terms of the "value added" areas of SAP Financials, there are some interesting niches emerging too, from Treasury to
Funds Management (Public Sector), Fixed Assets/Asset Accountings, and, perhaps the most hyped, Financial Supply
Chain Management (FSCM). FSCM is, in part, about web-based collaborative tools, such as an online claims and
disputes management process that is integrated into the core ERP system. Anytime you have a cutting edge "extended
ERP" skill like that, you are moving in the right direction, as long as you don't get too far ahead of the overall market
demand. Also, keep on the lookout for more work in GRC (Governance, Risk and Compliance) and EPM (Enterprise
Performance Management) as the Business Objects product integration proceeds. All these strategic areas bode well for
both the present and future of SAP Financials consulting.

2. HR/HCM (Human Resources/Human Capital Management) - HR/HCM is making a surprisingly strong push for number
one. Also driven by core upgrades, HR/HCM is remaining hot in part because HCM is emerging as a competitive
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advantage for companies (as opposed to the traditional HR administrative/back office approach). This is increasing the
need for those who are skilled in Performance Management configuration, as well as E-Recruiting, and we can expect a
similar surge in the need for other areas of Talent Management as well, as more and more companies realize that they
need the best possible software solution to aid in their attempts to recruit and retain top talent as a key competitive
driver. Performance Management is currently one of the hottest areas of Talent Management, because you can't
manage talent unless you can systematically evaluate and reward performance.

We are also seeing a big push in terms of Portals-based HR self-service, with ESS (Employee Self-Service) and MSS
(Manager Self-Service) showing up on a lot of job orders. There are also some Portals-HR-Security tie-ins driving work in
this area. Another advantage to SAP HCM: many of the components are new, thus reducing competition from
experienced consultants. As one recruiting friend of mine told me, "SAP HR has grown up." The combination of the
increased quality of the core HR components and SAP's sophisticated HCM solutions is driving more and more
companies to standardize on SAP for HR and FI as they upgrade. This means we can be confident that SAP HR skills
will be in demand, not just during this "upgrade wave," but after the upgrade, as more strategic HCM components are
installed.

3. SD (Sales and Distribution) - I see SD getting pulled into Logistics upgrades, and to some degree, into extended
Supply Chain Management (SCM) when it comes to the "distribution" side of SD, and this is a hot area. There is also
some demand for SD-Variant Configuration, which often ties into PP and MM. Then of course you have Pricing, which
can be very sophisticated, and the bread-and-butter Billing component comes into play also. And, of course, SD-CRM
integration. Another area we are seeing that drives the demand for SD consultants is the SD-GTS (Global Trade
Systems), now frequently called GTM (Global Trade Management) - a key area for many international SAP
implementations, and one that requires significant expertise to configure properly. International tax requirements are
pretty complex, and SAP's GTM solution is going to play an increasing role in this. SD spans a lot of areas, from the
"sales" side of SD tying into CRM, and the "distribution" side tying into overall Logistics side of SAP as well as the Supply
Chain Management (SCM) components. SD's integral role in all these areas promises continued consulting demand.

4. WM (Warehouse Management) - Perhaps the biggest surprise on this list, Warehouse Management has made a big
rise from earlier days. If I had made this list four years ago, WM would not have ranked this high. This niche area has
traditionally been more attractive in combination with other skill sets, such as MM/WM. However, we are seeing more of
an emphasis on WM jobs lately, and that is because SAP's WM component is starting to win more projects over the bestof-breed warehouse management systems that many companies previously opted for instead of SAP WM.

SAP EWM (Extended Warehouse Management) is driving some of the job orders in this module also, as companies are
able to manage complex warehouses down to the storage bin level. Of course, some companies have more
sophisticated, industry-specific warehouse management needs than SAP can currently handle, but as SAP beefs up WM
further, that list is getting smaller. Another good skills combination involves WM and RF/RFID, and if RFID ever picks up
more momentum, that particular combination could solidify WM on this list even further. But what makes WM hot today is
just the simple needs of companies for more visibility into their inventory, integrated real time with their ERP system.
Basic issues like managing storage bins in multiple locations are the key to WM demand today.

5. PS (Project Systems) - PS continues to gain traction as a perhaps unexpectedly popular SAP niche area. It's a
versatile module that links up with several key areas of SAP, but the PS-FI/CO integration between PS and the costing
components in the SAP CO (Controlling) module is probably the key to the ongoing demand in this area.

6. PP (Production Planning) - Use varies by industry, so there's not as much demand here across the board as in more
general areas of SAP like HCM that cross industries more universally. PP is often in more demand when tied into other
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core Logistics components (SD/MM/PP) or integrated with APO on occasion. I think that PP is an area that may be better
pursued now as part of a broader SCM (Supply Chain Management) focus.

7. MM (Materials Management) - A pretty low place on the list for a core area of SAP, but there are some reasons for
this. Not all industries apply or use the MM module. It does get pulled into many Logistics and SCM processes and job
openings. Some would consider IM (Inventory Management) a separate SAP niche module, but for our purposes here,
I'm grouping it with MM, and the MM/IM skills combination is one of the hotter MM-related skill sets. However, MM has
also given way to SRM when it comes to e-procurement and more sophisticated marketplace and auction functionality.

8. QM (Quality Management) - Another niche module that seems to have more traction in areas where compliance
throughout the manufacturing process is mission critical, such as Pharma and Chemicals. This is another area of SAP
that does compete with best-of-breed systems for market acceptance. In many industries where companies would
consider QM, they cannot bend on functionality simply based on the appeal of easy integration with the ERP core.
Because QM is often tied to regulatory compliance, best-of-breed solutions that address the compliance issue perfectly
often have the upper hand over SAP QM. For this reason, SAP has very little penetration into best-of-breed "QM" areas
like LIMS (Laboratory Management Information Systems). While the QM area does support some senior level expert
consultants, in general QM skills often work best in conjunction with core modules like MM. The MM/QM mix is a
common and effective one.

9. PM (Plant Maintenance) - PM is another niche area of SAP that has always had a steady trickle of requirements,
typically scooped up by senior level consultants. Again, PM is often a handy module to have in conjunction with other
core areas like MM, or other niche areas like SM. I don't consider PM to be a good focus for an SAP "newbie," but it can
be a nice area for a senior level consultant. In some industries, we also see a nice skills combination of SM/PM/CS, and
this area may get a bit hotter as NetWeaver's embedded wireless capabilities have an impact on integrating the shop
floors of these remote service and plant areas. Another example of where SAP has had some success is in the SAP
MRO for Aerospace and Defense solution (Maintenance, Repairs, and Optimization). There is enough consulting work to
support an experienced consultant, but not enough for new folks in my opinion, unless their non-SAP industry
background lines up perfectly.

10. SM (Service Management) - If combined with the CRM Service area, which has overlapping functionality, SM might
go higher on this list. To the best of my knowledge, future development of Service functionality is taking place on the
CRM Service side, so the core SM module is not something to count on in the long term, which is why it earns last place
on this list. But, enough SAP customers are still utilizing it that it remains an area of some demand. SM/PM is an
interesting combination, and SM/CRM may have some appeal as well. We also see plenty of SM/CS (Customer Service)
requirements.

I hope this ranking of the SAP modules was taken with a grain of salt. There are successful consultants working in all ten
of these areas and many more besides. But if this answer helped to give a better sense of which functional skills are in
demand, then it was a fun way to do it. Let me know what you think of it.

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