Overview of the Profit Center Reorganization Tool

SAP provided a free (provided that you have the Landscape Transformation service as part of your license) tool which allows businesses to reorganize their profit center structure and change all existing master data, and open item assignments without going through a laborious process. What I find the most surprising about this tool is that even though it has been around for about three years, not many companies are using it. I recently delivered a well-attended session at the Financials 2014 conference in Europe, and none of the attendees in the session had implemented this tool. Normally, when I deliver sessions such as these, I usually get (approximately) 50% of the attendees having implemented the tool but are looking for more effective ways of utilizing it; and another 50% wanting to know about it, having not implemented it.

In this blog, therefore, I want to highlight a few aspects of this tool. First of all, here are the prerequisites for implementation:

(1)    You need to at least be on SAP’s Enhancement Package 5 (note that the current enhancement package while writing this blog, is EhP7);

(2)    You need to activate business function FIN_GL_REORG: Some functional users of SAP do not realize that even when you have done an upgrade, you may not get certain functionality if you do not activate the relevant business functions. The reason may be because the responsibility for activating these business functions normally lies with the Basis (SAP technical) team, and if they are not told, certain key functions may remain deactivated. I do advise that this functionality remains with the technical team because some of the business functions cannot be reversed.

(3)    You need to have the New G/L implemented: The key functionality of this tool is to ensure that you can produce full balance sheets by profit center, after you have made a profit center reassignment. Note that in light of New GL’s document splitting functionality, this could be a pretty arduous task, as ­every line in a financial document may need to have a profit center assigned

(4)    You need to have the Profit Center Update scenario assigned to the relevant ledgers: As mentioned above you need to have New GL activated, and an offshoot of this is that you should have the Profit Center Update scenario assigned to your ledger. It is probably likely that if you want to do a profit center reorganization, you already have this scenario activated (as it is the only way that the profit center field is updated in the New GL). However, I know some companies that still have classic PCA activated, and hence confuse the update that occurs with classic PCA as the one that should occur with New GL.

Once you have these prerequisites satisfied, the decision you need to make is whether you want to use this tool with the SAP ERP client or with the Net Weaver Business client. Note that the latter option provides much more functionality than the former.

You can use the tool to change, delete, split or merge profit centers in the master data that they exist in and have the system update all the sub-objects that these master data items are used in. Think of the material master and cost center as typical examples. These master data (normally) contain profit centers, and are used in various other objects such as sales orders, purchase orders, production orders, fixed assets, etc. and these sub-objects and any open items that they are assigned to can be updated as well.

You can therefore see that this is a very useful tool, which, considering its potential impact on several fundamental master data objects will normally require an (expensive) SLT (System Landscape Transformation) project to be undertaken.

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