Reorganization of Profit
Centers in ERP
Product Management SAP Landscape Transformation
SAP AG
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 2
Solution Overview: Reorganization of Profit Centers
New Features Description Target Users
Reorganization
of profit
centers
Reorganization scenarios Merge
Split
Change
Reorganization Scope: Current Assets
W I P
Fixed Assets
Receivables / Liablities
P&L
GR/IR Account
Change of master data, transactional data and value
flow
Audit Trail
Generic framework allowing customer specific adoption
Controller
(responsible for
overall organizational
model )
Line Manager / Project
Manager / Plant
Manager (responsible
for detailed
reassignments)
Reorganization Management: Defined procedure for organizational change in ERP
Reorganization Plan: Unique and comprehensive view on reorganization measures.
Benefits
Flexibility: Fast adaption of organizational structures
Transparency: High data quality for Management Reporting.
Compliance: Approval Steps & Audit Trail.
Low TCO / TCI
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 3
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
* * Take
detailed
decisions
Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Corporate Management
(CEO)
Defines
reorganizat
ion plan
Central Controller Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
Business Value
Single point of entry for defining, triggering,
monitoring and reporting on a reorganization
plan.
Customer business challenges
Break down a management decision for a
reorganization aim into a well defined reorganization
plan.
Align all related parties, identify their specific
responsibilities, initiate and monitor all necessary
activities.
Provide the database for audit trail.
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 4
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
Take detailed
decisions Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Defines
reorganizat
ion plan
My Company
Profit Center 2
Profit Center 3
Purchasing
Production
My Company
Profit Ctr A
Profit Ctr 2
Profit Ctr 3
°°°
Purchasing
Production Profit Center A
°°°
Fast implementation of new organization
Low TCO / TCI
Reporting on fulfillment
Profit Ctr B
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 5
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Defines
reorganization
plan
Take
detailed
decisions
Break down reorganization decision into well defined tasks
Assign decision tasks to people in charge
Monitorinig of reorganization progress
Reorg Date Reorg Completion Prior Period closing
Change orders
Period end
processes
in FI-AA, CO
Change WBS element
Change Master
Cumulative
Transfer
postings of
balance sheet
accounts
04/01 04/30
Define
Reorganization
Plan
Change cost center
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 6
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
Take detailed
decision
Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Defines
reorganizatio
n plan
Execute tasks according to plan
Report on fulfillment
Reorg Date Reorg Completion Prior Period closing
Change orders
Period end
processes
in FI-AA, CO
Change WBS element
Change Master Cumulative
Transfer
postings of
balance sheet
accounts
Define
Reorganization
Plan
Assign
New
Profit Ctr
to Objects
04/01 04/30
Change cost center
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 7
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
Define
Reorganization
Plan
Assign
New
Profit Ctr
To
objects
Prior Period closing
Change orders
Change WBS element
Change master records
Transfer
postings of
balance sheet
accounts
Reorg Date
Change cost center
04/01 04/30
Take
detailed
decisions
Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Defines
reorganizat
ion plan
Reorg Completion
Period end
processes
in FI-AA, CO
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 8
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
Take detailed
decision
Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Defines
reorganizatio
n plan
Reorg Date Reorg Completion Prior Period closing
Period end
processes
in FI-AA, CO
Define
Reorganization
Plan
Assign
New
Profit Ctr
to
Objects
Change cost center
04/01 04/30
Change orders
Change WBS element
Change Master Cumulative
Transfer
postings of
balance sheet
accounts
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 9
Feature: SAP Reorganization Plan provides one unique & complete
view on reorganization process
Define
Reorganization
Plan
Assign
New
Profit Ctr
To
objects
Prior Period closing
Change orders
Period end
processes
in FI-AA, CO
Change WBS element
Change master records
Transfer
postings of
balance sheet
accounts
Reorg Date
Change cost center
04/01 04/30
* * Take
detailed
decisions
Report
Results
Monitors Status,
Triggers
automated steps
Management
decision:
corporate
reorganization
Defines
reorganizat
ion plan
Reorg Completion
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 10
Status Management in the Reorganization Plan
Make
Detailed
Decision
Report
Results
Management
Decision:
Corporate
Reorganization
Defines
Reorgani-
zation Plan
1. Objects are selected by system
Status: Object in the Reorganization
2. Objects are assigned to experts
Status: Object Released for Object Owner
3. Object Owners enter profit center assignments
Status: Approved for Further Processing
4. Objects are reassigned to new profit centers
Status: Reassignment Successful
5. Transfer Postings for Balance Sheet Items
Status: Balance Determination Successful
Monitors Status,
Triggers
Automated Steps
Corporate Management
(CEO) Central Controller
Central Controller
Plant Manager
Sales Manager
Cost Accountant Accountant
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 11
Scope of Profit Center Reorganization:
Considered Objects
Material
Sales Order
Purchase Order
Payable
Receivable
GR/IR Account
Fixed Asset
Internal Order
Cost Center
WBS Element
Network
Network Activity
Cost Object
Production Order
Process Order
Product Cost Collector
Accrual Calculation Order
QM Order
Maintenance Order
…and all related open processes
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 12
Currently Out of Scope
In SAP ERP 6.0 EhP5 the following features are out of scope:
Restatement (historical reporting under the new entity assignment)
Commitments
Real Estate objects
Accrual objects of the accrual engine
Allocation cycles in New GL
Contract Accounting (FI-CA, profit center for receivables)
Plan data (planning integration, manual entries)
G/L accounts with open item management will not be considered in reorganization;
exception GR/IR account in case the document split is activated
Sales documents with revenue recognition
ALE scenarios
The new profit center to which an object is assigned needs to be valid in the same
company code as the old profit center -> no cross company transfer posting possible
P&L postings into the reorganization period without a cost object carrying the profit center.
For more information see SAP Note 1801767
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 13
Derivation Hierarchy for Profit Center:
Objects Considered in Reorganization
Objects considered in reorganization:
Person responsible has to decide about the assignment
of the new profit center on the first level
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 14
SAP Landscape Transformation – Portfolio Overview
The Profit Center Reorganization is offered within the product portfolio of SAP Landscape
Transformation (see SAP Note 1534197)
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 15
SAP LT – Requirements ‘Leverage Sell, Buy, and
Restructure’
There are two solutions for Profit Center Reorganization:
- Analysis for Profit Center Reorganization (as of SP06)
- Profit Center Reorganization
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 16
SAP LT – Project View with Execution Plan
Access to package that contains process tree
for the reorganization process
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 17
SAP LT - Process Tree I
Create REORG Plan,
identify affected
objects and assign
owners
Closing operations for the prior period,
completion of the reorganization and
activities after closing the
reorganization plan
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 18
SAP LT- Process Tree II
Represents the view of the reorganization manager
Guides him step-by-step through the complete profit center reorganization process
Each activity in the process tree is documented
The process monitor provides information about the execution of the reorganization
(activity logs, start and end times etc.)
Process tree is automatically generated when the profit center reorganization project
in the Solution Manager system is created
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 19
Edit a Reorganization Plan: Basic Data
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 20
Creating a Reorganization Plan: General Restrictions
These will appear in the lists for the object
owners, to ensure that they can only use these
profit centers when they make their
reassignments!
The profit centers entered under
“General Restrictions” determine the
scope of reorganization.
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 21
Assign New Profit Center Assignments and Approval for Further
Processing
The object owner makes the assignment using profit
centers listed in “General Restrictions”
Finished Materials (FERT……..) are assigned to profit
center 8124
On completion, the owner sets the status to “Approved
for Further Processing”
Central Controlling can now complete the
reorganization
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 22
Reassignments, Transfer Postings, Finalize
Reorganization
Once the reorganization key date has been
reached, the object lists are used to document
the reassignments
The derivation hierarchy determines all items
affected by the profit center change
The assignment of a material from profit center A
to profit center B will affect all dependent objects
After successful and complete reassignment the
general ledger transfer postings are executed
Finally, the reorganization plan is closed
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 23
Analysis for Profit Center Reorganization
Availability: As of SAP Landscape Transformation SP06
New analysis included in SAP LT work center which compares profit center values of the
new General Ledger (FI-GL) with the respective profit center values in
- Fixed Assets (FI-AA)
- Materials Management (MM)
- Work in process (WiP) & SD Objects
- GR/IR Accounts
Aim: Check whether your system is consistent with regard to the profit center balances, i.e.
whether the balances of the areas mentioned above are consistent with the new general
ledger (FI-GL)
After profit center reorganization, you can prove that no inconsistencies occurred during the
reorganization
Recommendation: Start the analysis with a certain lead time before the reorganization and
harmonize any inconsistencies before the first profit center reorganization run
For further information, see SAP note 1943178
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 24
Analysis for Profit Center Reorganization - As of SAP LT SP06 -
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 25
Project Setup and Testing Profit Center Reorganization
Profit Center Reorganization requires the setup of a project
Appropriate testing with 1-n test cycles depending on the complexity and requirements of
the project necessary
Suitable test environment required
Test system should be a recent copy of production system
Test and production system should be on latest Support Package level
All relevant SAP notes have to be implemented in the systems affected by the
reorganization. For a list of these SAP Notes, see SAP Note 1471153
For more information on Profit Center Reorganization, see SAP Note 1810605
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 26
Project Schedule Profit Center Reorganization
provide test system application testing
2014
August September October November December
Provision of SAP LT
Preparation and Blueprint
1. Reorganization in test
system Reorg date 1 October 2014
User Acceptance Test
2. Reorganization in test
system Reorg date 1 December 2014
User Acceptance Test
Reorganization in
production system
- Reorg date 1 February 2015
Kick-off
workshop
January February
2015
Sign off scenario
Test
confirmation …
Legend: reorganization milestone
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 27
Some Key Points to Take Home
Profit Center Restructuring can affect not only the profit center assignments in your general ledger
but also all data that feeds into the general ledger (e.g., inventory postings, payables, receivables
and expense postings).
SAP‘s reorganization plan allows you to create a framework to select all the affected profit centers,
gather sign-offs from affected managers (experts), and perform all reassignments including
transfer postings.
You can prepare for the reorganization long before the key date.
The reorganization postings are performed with reference to that key date.
Cost centers are handled by creating a new data slice for the new profit center assignment.
Other objects are not time dependent. You must be careful to ensure that all close activities are
completed properly before you start to reorganize.
Transfer Postings can be updated in the general ledger using a special document type.
A special transaction type identifies them for consolidation (transfer posting for
material, assets).
Profit Center reorganization requires the setup of a project with appropriate testing in a suitable
test environment (see SAP Note 1810605 for further details)
The new function is offered within the product portfolio of SAP Landscape Transformation (see
SAP note 1534197).
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 28
Further Information
Profit Center Reorganization
Functions in Detail
https://websmp101.sap-ag.de/~sapidb/011000358700000540412012E/ReorgProfitCentSegmERPen.pdf
Application Help
http://help.sap.com/erp2005_ehp_05/helpdata/en/93/87c1b6f74e4c82bc0a47d16b5007dd/frameset.htm
Business Function Documentation
http://help.sap.com/erp2005_ehp_06/helpdata/en/fb/84a48d665e4fa9a2dc7b60adeb7c7d/frameset.htm
SAP Landscape Transformation in general
Service Marketplace
http://service.sap.com/sapLT
Application Help
http://help.sap.com/saplt20
SAP LT overview documents
Video 1: SAP Landscape Transformation Software: Speeding Time to Value
Video 2: SAP Landscape Transformation 2.0
© 2014 SAP AG or an SAP affiliate company. All rights reserved.
Thank you
© 2014 SAP AG. All rights reserved. 43
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