Sometimes it is not possible to adapt the system to the customer needs only by customizing. In these cases, the system needs to be enhanced using some type of extension.
These are the most common types of extensions in SAP:
User Exits: these are one of the first types of extensions in SAP. They are still useful, but in case of new extensions you should try an Enhancement or a BADI.
BADI‘s: BADI‘s (Business Add In‘s) are part of ABAP Objects. They appeared in SAP R/3 release 4.6 and are still very useful.
Enhancements: these are the newest type of extension in SAP, introduced in SAP release 6.x. Enhancements are very different from previous extension types as they allow the customer to modify the standard code virtually anywhere.
BTE‘s: Business Transaction Events, or BTE‘s are FI extensions.
Substitutions: allthough they are not exactly extensions, customers can add code using them.
You will find information regarding each one of these extension types throughout this section.
原文：http://www.cnblogs.com/jefflu2012/p/3973866.html