Transcript
Design Phase
FinancialOrganizational StructureConfirmation SessionJan 16 2008
2• 2
Confirmation session objectives
• Analyze the results of the Organizational Structure Workshop Sessions• Analyze issues and define action items if necessary.
3• 3
Agenda
• Introductions• Objectives• Agenda
• SAP Org structure Overview
• Logistics– Overview– Purchasing Organizations, purchasing groups– Plants & Storage Locations.– Issues/Action-Items Summary
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Agenda
• Accounting– Company Code, Controlling Area, FM Area.– Accounting String
• Object - GL account• Location - Cost center• Fund• Project• Function• Program - Grant• Issues/Action-Items Summary
• Project Systems– Overview– Projects & WBS Elements– Integration with Accounting/Budgeting– Issues/Action-Items Summary
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SAP Org structure OverviewThe SAP System: Modularity and Integration
Integration - Integrity - Standardization - Accountability
• SAPs perhaps most important benefit: INTEGRATION
– Components or solutions in SAP are real-time integrated
– This increases users efficiency significantly, because data only needs to be entered one time, you can re-use data, you have high data validity and so on. . . . Banking
Externalreporting
AvailControl
COCost
Centers
COOrders
CO
GL
AA
PS
FM
GMMM
Inventory
SDMMPurchasing
Payroll
TravelMgmt.
TV
MM
HR
AP
AR
TRCashFlow
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SAP Org structure OverviewSAP Data structure
Drives the fundamental data framework within the SAP system
SAP’s static informational and processing data
Tasks which combine to form integratedbusiness processes
Master Data
Transactions
Org Structure
SAPClient
CONFIGURATION SIDE
FUNCTIONAL SIDE
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Logistics
– Overview– Purchasing Organizations, purchasing groups– Plants & Storage Locations.– Issues/Action-Items Summary
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Purchasing Organization (ECC) - Key Considerations
Purchase organization for each department (TMT, S&D, Maintenance etc) vs. one central purchase organization. The decision has been made to have one central purchasing organization since:
Vendor master records are maintained centrallyContracts are maintained centrally
Purchasing Groups will mirror the existing buyer groups to:Facilitate efficient reportingEase conversion and cutover activities
Note: Other purchasing groups can be added to enable separate reporting capability
Note: One separate purchase organization can be created for purchases with internal funds
Key considerationsKey considerations
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Proposed SAP Purchase Organization (ECC)
Client X Company Code
Client XCentral Pur. Org.
Purchasing Group A
Purchasing Group C
Purchasing Group B
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Purchasing Organization (SRM) - Key Considerations
SRM Purchasing organization hierarchy would have the company code, purchasing organization, departments, purchasing group (as required) and user in that order. One single company code and one central purchasing organization will be used
Departments will mirror existing departments such as S&D, Schools, Textbooks, Food & Nutrition, Maintenance and TMT
Purchasing Groups will mirror the existing buyer groups toFacilitate efficient reportingEase conversion and cutover activities
SRM attributes will be used to provide some level of automation with: Delivery address for school buyers generated automaticallyDefault cost center information populated automatically
Key considerationsKey considerations
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Proposed SAP Purchase Organization (SRM)
Client X Company Code
Client XPurchasing Org.
Department S&D
Department Schools
Purchasing Group A
Location X Springs High School
User 2
S. Location X High School
User 3
User 1
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Plants & Storage Locations - Key Considerations
Driving factors:Physical addressFuture scalabilityEfficient ReportingConfiguration/ Default values
In order to accommodate the Stock Transport Order (STO) process, we will create 1 plant representing all the schools
Separate plants will be created for Departments – Food & Nutrition, TMT & Maintenance
Separate storage locations will be created to representEach individual schoolS&D aisles which are used to store products. There will be no location
tracking below aisle.
Key considerationsKey considerations
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Proposed SAP Organization StructurePlants and Storage Locations
Client XCompany Code
Plant 1000S&D Warehouse
Plant 2000Schools
Plant 3000Food & Nutrition
Stor Loc 0001Aisle 1
Stor Loc 0002Aisle 2
Stor Loc 0003Aisle 3
Stor Loc 7151Location X Springs
High School
Stor Loc 7152S. Location X High School
Stor Loc 1
Plant 4000TMT
Stor Loc 1
Plant 5000Maintenance
Stor Loc 1
Stor Loc 7153N. Location X High School
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Procurement Issues/Action Items Summary
• Security model between ECC and SRM can be different. User access maintenance is an issue that need to be discussed with HR – Position
• Conversion. As there are two different structures, will it mean two different conversion programs: one for SRM, the other for ECC (MM)?
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Finance
• Overview• Company Code, Controlling Area, FM Area.• Accounting String
– Object - GL account– Location - Cost center– Fund– Project– Function– Program - Grant
• Issues/Action-Items Summary
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Financial Organizational Structure
CompanyCode
Highest organizational structure for financial accounting and control purposes. A company code is an independent unit that represents a legal entity or balanced set of books.All structures within a company code have similar financial processes and use the same chart of accounts. Client X will only use ONE company code.
DECISIONS AND KEY CONSIDERATIONS
– One company code for all Client X; Four Digit Code
– One company code is the leading practice for public sector• Full management of financial operations under one single umbrella: Full visibility• Simplifies the maintenance of G/L accounts, vendors and customers: Using one single
company code eliminates the need for a consolidation process and avoid data redundancy.
• Eliminates the need for substantial configuration to add, integrate and maintain new company codes.
M D P S
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Financial Organizational Structure
ControllingArea
Controlling area is the umbrella in which expense management activities are performed. Controls boundaries in cost center accounting.The controlling area is an organizational unit delimiting the company's managerial accounting operations
KEY CONSIDERATIONS
– One Controlling Area for all Client X; Four Digit Code:– One FM Area for all Client X; Four Digit Code:– One company code can have only one controlling area and one FM area assigned
– All Client X expenditures and budgets are managed within a single structure.
M D P S
FMArea
The FM area is derived from Financial Accounting organizational unit, the Company Code by assigning the company code relevant for Funds Management in your organization to an FM area.
M D P S
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Financial Organizational Structure
Business Area
A business area is an organizational unit within accounting that represents a separate area of operations or responsibilities in a business organization. It permits the generation of independent Balance Sheet and P/L statements, and, a more sophisticated security model.
DECISIONS AND KEY CONSIDERATIONS
– SAP recommends the use of business areas to represent fully reportable organizational levels (Full financial statements) necessary below the main reporting entity:
– Business Areas will represent agencies, lines of business, or locations where complete (or even partial) financial statements or cost accounting information is required. Client X includes one agency or organizational unit but has several locations/schools that can be represented with business areas
– If only one agency/line of business/location is necessary, it’s a leading practice to activate business areas with a generic defaulted value. That option allows its use in the future
– The team to determine if Business Area is necessary for Schools or any other subdivision of Client X
– Access can be controlled per Business Area as it can be made mandatory.
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Master Data Relationship Overview at Client X
FIFinancial
Accounting(external accounting)
GMGrantee
Management(sponsor’s view/reporting
requirements)
FMFunds Management(budgetary accounting)
COControlling
(managerial/cost accounting)
GL Account
Grant
Functional Area
Business Area
Fund
Fiscal Year
Cost ElementPrimary & Secondary
Grant
Functional Area
Internal OrderWBS Element
Cost Center
Fund
Fiscal Year
Commitment Item
Grant
Functional Area
Funded Program
Funds Center
Fund
Fiscal Year
Sponsor Class
Grant
Sponsored Program
Fund
Budget Validity Period
Object
Grant
Location
Function
Fund
Program &Project
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Client X Object Code
Recommended G/L Account
Recommended Commitment Item
Recommended Cost Element
Object
GL Account
Cost Element
CommitmentItem
KEY CONSIDERATIONS– One to one relationship between GL account, Cost Element and Commitment Item
simplifying reporting, reconciliation and conversion– All object codes aligned with the red book to the greatest extend possible– Provide space for possible future growth or subdivision of an object code
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Issue: Salary Objects/GL accounts
• Recommend consistency with Florida DOE guidelines for Salary Expenditure Objects
(5)100 Salaries – Currently agrees to DOE (5)110 Administrator (5)120 Classroom Teacher (5)130 Other Certified (5)140 Substitute Teacher (5)150 Aide (5)160 Other support Personnel (5)170 Board Members and Attorneys
KEY CONSIDERATIONS– Consistency with Florida DOE guidelines– Simplifies the system and master data configuration in Finance and Payroll– GL reporting on salary category groups such as Classroom Teachers, Administrators,
Other support Personnel Position information is retained in HR, not in the General Ledger. Details can be reported through Business Intelligence
– System response time can degrade when multiple GL accounts are assigned for each individual employee
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Client X Current Fund Strategy
Option 2 : 6 Digit Fund With Room for Growth
Client X Current Fund Strategy
Option 1: 4 Digit Fund Realigned
KEY CONSIDERATIONS– Keep funds aligned with the red book – Provide extension for future growth – Provide Client X with the ability to classify Funds by multiple fund sources by extending
the field and allowing roll up
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Client X Location Code
Palm Springs Elementary
Recommended Cost Center
Recommended Fund Center
Location
Cost Center
Fund Center
KEY CONSIDERATIONS– Keep funds aligned with the red book – Provide space for possible future growth, as:
• The is currently no space for growth in the district centers assigned to the 9XXX range• Rolling up centers to a higher level of the hierarchy can require additional characters.
For example, subdividing a school into multiple locations can require more than 4 digits
• Cost Centers and Funds Centers are time dependent information, and can be changed but with historical data remaining accessible
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Client X Locations - SAP Cost Centers
• Client X Chargeable Location Codes - SAP Cost Centers• Chargeable location codes are the ones relevant to accounting• Cost Center Accounting enables analysis of overhead costs according to where they
were incurred• Client X Chargeable Location Codes are represented as Cost Centers and Fund
Centers in SAP• Cost Centers generally correspond to internal departments like HR, Finance, IT, etc. In
K-12 environment, a school can be represented as a cost center or group of cost centers
• Each Cost Center must be assigned to a “Standard Hierarchy” of Cost Centers• Standard Hierarchy is a grouping of all Cost Centers within the Controlling Area (which
can include multiple Company Codes) providing a default view of the departmental structure – Alternative groups can be created for reporting purposes
• Alternate Hierarchies are optional and can be used to group location codes as needed by the district for reporting purposes.
• These Alternate Hierarchies for Client X can be focused on representing structures related to District Code, Location Type Code, Division, Geography, etc.
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Client X Locations - SAP Cost Centers
• Client X Chargeable Location Codes - SAP Cost Centers
• Examples – Cost Center 9015 - BUILDING OPERATIONSCost Center 9016 - MANAGEMENT PROJECTSCost Center 9022 - LABOR RELATIONSCost Center 9035 - BUILDING OPERATIONS IICost Center 9126 - TREASURERCost Center 9127 - OFFICE OF FINANCIAL OPERATION Cost Center 9128 - FINANCIAL OPS/BUDGETCost Center 9130 - BUSINESS OPERATIONSCost Center 9131 - MANAGEMENT & COMPLIANCE AUDITCost Center 9132 - AUDIT & INVESTIGATIVE AFFAIRSCost Center 9135 - NORTHWEST REGIONAL TRANS CTRCost Center 9141 - ACCOUNTS PAYABLECost Center 9151 - CONTROLLER
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Client X Cost Center Standard Hierarchy: Example
Client X
Regions Curriculum & Instruction
Charter Schools
Private Schools
Rosa ParksCharter
Pine Crest Academy
Region 1 Region 2 Region 3
Elementary
Middle School
High Schools
K-8 Schools
Zone Schools
Elementary
Middle School
High Schools
K-8 Schools
Elementary
Middle School
High Schools
K-8 Schools
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Client X Cost Center Alternate Hierarchy: Example
Client X
School Types Admin
Elementary
Region 1
Region 2
Region 3
Region n
Middle High K-8
Region 1
Region 2
Region 3
Region n
Region 1
Region 2
Region 3
Region n
Region 1
Region 2
Region 3
Region n
9015 - BUILDING OPERATIONS
9016 - MANAGEMENT PROJECTS
9022 - LABOR RELATIONS
9035 - BUILDING OPERATIONS II
9126 - TREASURER
9127 - OFFICE OF FINANCIAL OPERATION
9128 - FINANCIAL OPS/BUDGET
9130 - BUSINESS OPERATIONS
9131 - MANAGEMENT & COMPLIANCE AUDIT
9132 - AUDIT & INVESTIGATIVE AFFAIRS
9135 - NORTHWEST REGIONAL TRANS CTR
9141 - ACCOUNTS PAYABLE
9151 - CONTROLLER
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Client X Function & Program
Function: Basic Instruction
Recommended SAP Functional Area
Program: Title I Reading Coach
Functional Area + Program + 1 digit for Growth
KEY CONSIDERATIONS– Grants strategy will need to integrate with each Function-Program-Fund combination
assigned to the grant– Capital projects strategy will need to integrate the WBS with each Function-Program-
Fund combination used for the capital project – A five digit Program is already utilized but to a limited degree, Client X uses an alpha
character to tag onto the program
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Finance Issues/Action Items Summary
• Because of the change of coding structure, the development of conversion and interface routines will become more complex
• Cleansing of unused location codes and other MSAF information• A strategy to access historical data needs to be developed to support
conversion and reporting• The detailed security model that will be developed during design can
influence the enterprise structure
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Project Systems
• Project Systems– Overview– Projects & WBS Elements– Integration with Accounting/Budgeting– Issues/Action-Items Summary
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Projects Landscape Overview
Primavera
Project Number
Payment Information
Project Number Application
(WPNR )
Original Budget
PO Generation
SAP
Project Systems
Funds Management
PLANNING
Magellan
• Facility• Deficiencies• Planning• Inspect
Project Funding
Project Number
Budget Updates
Budget Preparation Budget Execution
Expedition
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Project Structures
• This example shows a Project Definition with a three level WBS element structure
• Project structures are made up of WBS elements. It is used to control and monitor the schedule, cost, revenues, and funds availability.
WBS WBS WBS
WBS WBS WBS WBS
WBSWBSLevel 1 WBS
Level 3 WBS
Level 2 WBS
Project DefinitionProject Definition
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WBS (project number) Coding Structure
Project number is a 8 digit auto generated sequential number e.g. 00400700
M-DCSP prefers to retain the sequential project number generation in the SAP scenario
The project number generated by WPNR will be used to create WBS elements in Project systems
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WBS (project number) Coding Structure
Middle School Addition
Site ImprovementCosts Cost of EHPA Cost of Site
Purchase Road Improvement Environmental issues
School Addition
Project Definition
A&E Fees
Owners contingency
ContingencyMaterial Testing Survey Construction
Project contingency
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Project Types Capital
New Facilities
Additions
Remodeling/Renovation
Site improvement
Maintenance
Roofing
Major Systems Replacement
Furniture/Equipment/Library books
ITS
These projects can be stand alone or be embedded with the above project types (Capital/Maintenance)
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Project Flow
Project CapitalizationProject Capitalization
WBS Elements
Cost CenterPlanned Values Actual Values
C I P
Asset 1Asset 1
Asset 2Asset 2
Asset 3Asset 3
Final settlementFinal settlement
Asset history sheet
Purchase Order Down payment
InvoiceInternal Activity
Transactions duringTransactions duringconstructionconstruction
Periodic settlement
BudgetBudget
Planned ValuesPlanned Values
CommitmentsCommitments
Actual ValuesActual Values
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Projects / Funds Management Integration
Client
Cost Centers
\Internal Orders
Funded Programs
CO Area Company Code
Functional Areas
Business Areas
Fund Centers
Funds
GL Accounts
FM Area
WBS Elements
Commitment ItemsCost Elements
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Project Issues/Action Items Summary
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