SAP Functions in DetailSAP ERP

SAP General Ledger

Simplify and Streamline the Reorganization of Your Profit Centers and Segments

Table of Contents4 Quick Facts

5 Executive Summary – Reorganizing Profit Centers and Segments in SAP General LedgerPerforming Activities from a Business Perspective

7 The Reorganization Process – A Phase Model

9 Roles and Responsibilities and Status of the ReorganizationGenerating Object Lists

Viewing the Object Status

11 Profit Center Standard Hierarchy

12 Segment Standard Derivation HierarchyFor More Information

Quick FactsBusiness Challenges

• Change organizational structures and responsibilities quickly

• Easily adopt segment and profit center assignments to changing reporting requirements

• Manage reorganization in a consistent and transparent way

• Involve everyone whose data is being impacted

• Bring the balance sheet back into sync after reorganizing a profit center or segment

Key Features • Alignment of all related parties –

Identify their specific responsibilities and initiate and monitor all necessary activities

• User-friendly framework – Create, edit, and administer a well-defined reorganization plan

• Phase model – Perform activities in a certain predefined order for best results

• Audit trail – Keep all changes within the reorganization plan for reviewing and analyzing the reorganization results

Business Benefits • Help ensure a successful reorganiza-tion by starting with a clearly defined plan

• Collaborate for better results with a single point of entry for defining, triggering, monitoring, and reporting on a reorganization

• Combine improved data consistency with organizational flexibility

• Help ensure that tasks go to the right people, who have the knowledge to assign the new profit centers for objects in their areas, with a transparent, interactive, and communicative way of walking through the whole reorgani-zation process

For More InformationFor more information, contact your local SAP representative or visit us on the Web at www.service.sap.com.

SummaryThe reorganization functionality for profit centers and segments in the SAP® General Ledger application lets you create a clearly defined plan before performing the reor-ganization. It gives you a single point of entry for defining, triggering, monitoring, and reporting on a reorganization and supports you with a highly automated and transparent process.

5SAP Functions in Detail – Simplify and Streamline the Reorganization of Your Profit Centers and Segments

Executive Summary – Reorganizing Profit Centers and Segments in SAP® General Ledger

In modern, dynamic companies, the adop-tion of responsibilities – often reflected in profit centers – or reporting structures is an ongoing task. Or, when a merger or acquisition of a company occurs, it might be necessary to have a different layout for the structure of the reporting (business) segments. The reorganization functionality in the SAP® General Ledger application supports this by offering a highly auto-mated and transparent process. You will now be able to combine improved data consistency with organizational flexibility by using this standard function, which is provided by SAP Landscape Transfor-mation software.

Your business challenges are to: • Break down a management decision

for a reorganization into a clearly defined reorganization plan

• Align all related parties, identify their specific responsibilities, and initiate and monitor all activities

• Provide information for an audit

With the reorganization functionality in SAP General Ledger, you have a single point of entry for defining, triggering, monitoring, and reporting on a reorgani-zation. It lets you create a clear and com-plete process to reorganize your profit centers and segments (see Figure 1).

For example, when you first set up the profit center scenario in SAP General Ledger, one of your main tasks is to con-figure the system to derive the correct profit centers from your profit center carrying objects (for example, materials, cost centers, orders, and projects) so that each posting is assigned to the correct profit center. In this way you can ultimately show the correct balances at profit center level in SAP General Ledger. The same applies for a segment – but in a simpler way. A segment in SAP General Ledger is, by default, derived from the profit center; thus it represents an aggregation of dif-ferent profit centers.

Today’s companies have to follow rapidly changing market requirements by quickly changing organizational structures and responsibilities. But how can you manage the shift in a consistent and transparent way? How do you know when the process starts? Who will be involved? What is the current status, and when is it complete? How can you be sure that everyone whose data will be impacted by the reorganization has really been involved?

Figure 1: Reorganization Process

Makes manage-ment decision:

corporate reorganization

Defines reorganization

plan

Makes detailed

decisions

Monitors status, triggers

automated steps

Reports results

Corporate management

Central controller

Plant manager,sales manager,

cost accountant

Central controller

Accountant

This all goes well until the organizational structure and responsibility changes – which, of course, it does from time to time. If profit centers have to be split or several profit centers merged, this repre-sents a headache not just in terms of selecting the relevant objects or master data to be changed but also in terms of catching the affected transactional data, because there are invariably thousands of open customer orders, purchase orders, production orders, projects, invoices, and so on that are running under the old profit center assignment. Depending on your business, it can take months or even years for these orders to run their course. Worse, since SAP General Ledger records balance sheet postings by profit center, shifting your profit center structure also requires a series of correction postings to bring the balance sheet back into sync. However, if segments have to be split, this is far easier. You just have to decide which

Note: A reorganization of profit centers cannot be performed simultaneously with a reorganization of segments.

allows you to trigger, monitor, and perform all activities from a central place, involving and aligning all participants affected by the reorganization.

A reorganization is usually performed during a certain time span – let’s say within one posting period. This allows you to perform reorganizations subsequently and as often as needed while not losing your data history.

of the relevant profit centers receives the new one. Since the segment definition in the profit center master data is now time dependent, this is a simple task.

PERFoRMInG ACTIvITIES FRoM A BUSInESS PERSPECTIvE

Until now, reorganizing a company’s profit center or segment assignment structure was typically a consulting project in which custom programs were used to select all the affected data and make the necessary corrections. With enhancement package 5 for the SAP ERP application and SAP Landscape Transfor-mation, you can reassign new profit centers for a quantity of object types (for example, materials, assets, and invoices) and their related transactional data using a standard procedure – without system downtime – and you can make these adjustments in an auditable fashion. The reorganization of segments is available with enhancement package 6. This enables you to perform the activities from a busi-ness perspective rather than using an IT-driven approach. SAP Landscape Transformation offers the reorganization functionality in the form of a process tree, which guides you step by step through the complete reorganization process (see Figure 2). It contains a user-friendly framework for creating, editing, and admin-istrating the reorganization plan as a sin-gle point for managing all reorganizing and reassigning activities. This framework

With the reorganization functionality in SAP General Ledger, you have a single point of entry for defining, triggering, monitoring, and reporting on a reorganization.

Figure 2: Process Tree for Profit Center Reorganization

7SAP Functions in Detail – Simplify and Streamline the Reorganization of Your Profit Centers and Segments

The second phase starts at the beginning of the reorganization period (normally the first day of the following posting period). In this phase:

• You perform closing activities for the previous posting period, which is finally closed

• You create new master data and assign the old profit center or segment in master data, regenerate an object list (reorganization manager), and assign the new profit center or segment in the object list (object owner) for new objects relevant for postings to the previous posting period

• Add time slices with new profit centers to cost for profit center reorganization

• Add time slices with new segments to profit centers for segment reorganization

• Generate object lists (reorganization manager)

• Assign each object to the responsible person (reorganization manager)

• Assign new profit centers to objects and release objects for further processing (object owner)

Posting period April can be opened after these steps are executed (which can also be before April 1).

The reorganization functionality in SAP General Ledger supports a future-oriented activity following a phase model that requires you to perform certain activities in a certain order (see Figure 3).

The first phase is the preparation phase – that is, the posting period (typically one calendar month) before the reorganization period is reached

Here you: • Create new profit centers or segments

(if necessary) • Check reorganization customizing • Define the reorganization plan (reorga-

nization manager)

The Reorganization Process – A Phase Model

Update object lists

Execution

March April 1 April 10 April 20 April 30

Preparation

Close prior period

Reorganization Period

Reorganization date

Prior period closed

Reorganization completed

End of reorganization

period

Figure 3: Phases of Reorganization

• You execute the automatic assignment of the new profit center or segments to all objects (reorganization manager)

• You execute transfer postings (reorga-nization manager)

The reorganization plan is now closed.

The fourth phase begins after the reorganization plan is closed. Here you:

• Validate and document the reorganiza-tion process and results

• Perform all postings now using the new profit centers or segments

• Perform additional adjustment postings if required

You can now perform a new reorganiza-tion in the next posting period.

• You assign all new objects to the new profit center (the object lists should ideally not change) after closing the previous posting period (in the case of a segment reorganization, the profit centers carry the new segment in the new time slice)

• The system redirects P&L postings to new profit centers based on object lists (balance sheet postings can still contain “wrong” postings but will be reorganized during the later “transfer posting” step)

• You repeat object list processing as often as required (for example, in case of errors)

• You mark all object lists as “released for further processing” (back to the reorganization manager)

• You create new master data and assign the new profit center for new objects that are only relevant for postings in the fol-lowing posting period (they do not need to be included in reorganization); new profit centers with the new segment also do not need to be included into the reorganization

• For the new period, the system redirects profit and loss (P&L) postings with controlling objects automatically to the new profit centers or to the new segments based on the object lists

The third phase starts after the previous posting period has been closed. Here the reorganization is executed in the system, meaning that:

SAP General Ledger enables you to perform activities from a business perspective rather than using an IT-driven approach.

9SAP Functions in Detail – Simplify and Streamline the Reorganization of Your Profit Centers and Segments

Figure 5 shows an example of a work list in a profit center reorganization that is generated by the reorganization manager and that is offered to the object owners. Each list is offered individually to the experts according to their profit center responsibilities.

In the next step, the object owner receives the object list and will assign the new profit centers to the objects. In the example in Figure 6, it is a list of mate-rials. The user interface in the Web Dynpro development environment lets you run the reorganization within SAP NetWeaver® Business Client software or within the SAP NetWeaver Portal component.

Figure 4 shows a simple example of how easily a reorganization manager enters a management decision to reorganize a profit center. Here profit center 8024 will be split to profit centers 8124 and 8224.

GEnERATInG oBjECT LISTS

In the next activity, the reorganization manager generates the object lists (for example, in the case of profit center reor-ganization) for materials, projects, invoices, and all other objects that have to be involved in the reorganization. The system then offers the lists to the object owners who are the experts for these objects.

Two roles are involved in a reorganization: • Reorganization manager • Object owner

The reorganization manager creates the reorganization plan. He or she initi-ates the whole process by entering basic information, like the reorganization date (which, at the moment of definition, always has to be a future date) and the involved profit centers or segments. The reorgani-zation manager also might restrict cer-tain objects (materials, assets, and so on) or company codes, if necessary. He or she generates all object lists, which will be offered to the experts called “object owner.” The transparent, interactive, and communicative way of walking through the whole reorganization process is one of the big advantages and helps ensure that tasks go to the people who have the knowledge to assign the new profit centers or segments for objects in their areas – for example (for profit centers), to the person responsible for the materi-als in a plant.

The reorganization manager typically: • Creates the reorganization plan • Generates the object list for the object

owners • Monitors the whole process • Changes all involved objects, which

have been assigned earlier by the object owner to the new profit centers or segments

• Transfers all balance sheet–relevant postings

• Closes the reorganization plan

Roles and Responsibilities and Status of the Reorganization

Figure 4: Reorganization Plan with a Definition of a Profit Center Split

Therefore, a wide range of options for editing lists is available, which makes the task of assigning the new profit centers easier and more comfortable for the user.

Assigning, for example, the new profit centers can be an ongoing task, since the reorganization manager will probably regenerate the list in order to enhance the list containing the newest objects with old profit center or segment assignments. By default, the objects are offered to the users that are maintained in the master data of the respective profit center. If required, a business add-in (BAdI) is available that allows you to change the logic when selecting profit centers – for example, based on the project manager or the cost center manager.

Viewing THe OBjeCT STaTuS

As an example of reorganizing profit centers, once the new profit centers are entered, a new status will be set by the object owner to hand over to the reorga-nization manager.

If the corresponding status is set by the object owner, the reorganization manager can start to change the affected objects and the transfer postings of the balance sheet–relevant positions to the new profit centers or segments. As a result, all transfer postings are recorded in the object lists and are available for audit.

Once all object changes and transfer postings have been performed, the reor-ganization manager will close the reorga-nization plan.

Enter new profit center

Figure 5: object List Generated by the Reorganization Manager

Figure 6: object List to Be Filled out by the object owner

Enter new profit center

11SAP Functions in Detail – Simplify and Streamline the Reorganization of Your Profit Centers and Segments

The object lists for the profit center re- organization are structured according to the derivation hierarchy (see Figure 7). This represents the logic by which profit centers are derived from the master data when the standard business processes are performed in SAP ERP. For example, entering a profit center in the material master results in that profit center being the default profit center for all purchase order items, production orders, and sales order items created with reference to that material. If the profit center in the material master has to be changed, this affects all the derived profit center as-signments in the purchase order items, production orders, and sales order items. If you want, you can leave out hierarchy objects if those objects are not subject to reorganization.

Profit Center Standard Hierarchy

Figure 7: Standard Derivation Hierarchy for Profit Centers

Segment Standard Derivation HierarchySimply put, the standard derivation hierarchy for segments encompasses the profit center containing the segment (see Figure 8: Standard Derivation Hier-archy for Segments). When you enter the new segment using a time slice in the respective profit centers, the system automatically adjusts the new assign-ment in the dependent objects, such as “Payables” or “Sales Document” (settlement rules).

FoR MoRE InFoRMATIon

To learn more about how SAP General Ledger can support the reorganization of your profit centers and segments, contact your local SAP representative or visit us online at www.sap.com or www.service.sap.com.

note: Please contact your SAP account executive to establish whether using profit center reorganization means additional license fees for you.

Figure 8: Standard Derivation Hierarchy for Segments

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