Design Phase

Financial
Organizational
Structure
Confirmation Session
Jan 16 2008


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Confirmation session objectives
Analyze the results of the Organizational Structure Workshop Sessions
Analyze issues and define action items if necessary.
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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 Overview
The 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
External
reporting
Avail
Control
CO
Cost
Centers

CO
Orders
CO
GL
AA
PS
FM
GM
MM
Inventory
SD
MM
Purchasing
Payroll
Travel
Mgmt.
TV
MM
HR
AP
AR
TR
Cash
Flow
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SAP Org structure Overview
SAP Data structure
Drives the fundamental
data framework within
the SAP system
SAPs static
informational and
processing data
Tasks which
combine to form
integrated
business processes
Master Data
Transactions
Org
Structure
SAP
Client
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 centrally
Contracts are maintained centrally
Purchasing Groups will mirror the existing buyer groups to:
Facilitate efficient reporting
Ease 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 considerations
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Proposed SAP Purchase Organization (ECC)
Client X
Company Code
Client X
Central 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 to
Facilitate efficient reporting
Ease conversion and cutover activities
SRM attributes will be used to provide some level of automation with:
Delivery address for school buyers generated automatically
Default cost center information populated automatically


Key considerations
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Proposed SAP Purchase Organization (SRM)
Client X
Company Code
Client X
Purchasing 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 address
Future scalability
Efficient Reporting
Configuration/ 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 represent
Each individual school
S&D aisles which are used to store products. There will be no location
tracking below aisle.
Key considerations
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Proposed SAP Organization Structure
Plants and Storage Locations
Client X
Company Code
Plant 1000
S&D Warehouse
Plant 2000
Schools
Plant 3000
Food & Nutrition
Stor Loc 0001
Aisle 1
Stor Loc 0002
Aisle 2
Stor Loc 0003
Aisle 3
Stor Loc 7151
Location X Springs
High School
Stor Loc 7152
S. Location X
High School
Stor Loc 1
Plant 4000
TMT
Stor Loc 1
Plant 5000
Maintenance
Stor Loc 1
Stor Loc 7153
N. 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
Company
Code
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
Controlling
Area
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
FM
Area
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, its 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
FI
Financial
Accounting
( external accounting )
GM
Grantee
Management
( sponsors view / reporting
requirements )
FM
Funds Management
( budgetary accounting )
CO
Controlling
( managerial / cost
accounting )
GL Account
Grant
Functional Area
Business Area
Fund
Fiscal Year
Cost Element
Primary &
Secondary
Grant
Functional Area
Internal Order
WBS 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
Commitment
Item
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 OPERATIONS
Cost Center 9016 - MANAGEMENT PROJECTS
Cost Center 9022 - LABOR RELATIONS
Cost Center 9035 - BUILDING OPERATIONS II
Cost Center 9126 - TREASURER
Cost Center 9127 - OFFICE OF FINANCIAL OPERATION
Cost Center 9128 - FINANCIAL OPS/BUDGET
Cost Center 9130 - BUSINESS OPERATIONS
Cost Center 9131 - MANAGEMENT & COMPLIANCE AUDIT
Cost Center 9132 - AUDIT & INVESTIGATIVE AFFAIRS
Cost Center 9135 - NORTHWEST REGIONAL TRANS CTR
Cost Center 9141 - ACCOUNTS PAYABLE
Cost Center 9151 - CONTROLLER
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Client X Cost Center Standard Hierarchy: Example
Client X
Regions
Curriculum &
Instruction
Charter
Schools
Private
Schools
Rosa Parks
Charter
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
WBS
Level 1 WBS
Level 3 WBS
Level 2 WBS
Project 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 Improvement
Costs
Cost of EHPA
Cost of Site
Purchase
Road Improvement Environmental issues
School
Addition
Project Definition
A&E Fees
Owners contingency
Contingency Material 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 Capitalization
WBS Elements
Cost Center Planned Values Actual Values
C I P
Asset 1
Asset 2
Asset 3
Final settlement
Asset history
sheet
Purchase Order
Down payment
Invoice
Internal Activity
Transactions during
construction
Periodic settlement
Budget
Planned Values
Commitments
Actual 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
Items
Cost Elements
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Project Issues/Action Items Summary