CO Master Data Review 2010 Aug 23

7/30/2019 CO Master Data Review 2010 Aug 23

1/24

Status Update: OPTIMUS CO Master DataAugust 23, 2010


2/24

Agenda

Operating Concern

Controlling Area Profit Centers & Hierarchy

Cost Center & Hierarchy


3/24

Operating Concern

Definition: An Operating Concern is the highest organizational unit within the

Profitability analysis module. The operating concern is modeled

after the business organization.

Optimus Design:

Cameron will create a single Operating Concern, to link to the

Cameron single controlling area. One Operating Concern ensures

the standardization of the profitability analysis across the

enterprise.

Recommendation:

One Operating Concern:

1000 - Cameron International


4/24

Controlling Area

Definition: The Controlling Area is the highest structural unit in the controlling

module.

The Controlling Area is an organizational unit within an Enterprise

where comprehensive management accounting can be performed.

Profit Centers, Cost Centers, and Internal Orders are associated with a

Controlling Area.

The Controlling Area links financial accounting (FI) to management

accounting (CO) in SAP. Multiple Company Codes are attached to a

single controlling area.

A Controlling Area must be assigned to one Chart of Accounts.


5/24

Controlling Area continued

Optimus Design: Cameron will create a single controlling area. This controlling area will

be used for internal management of Profit Centers, Cost Centers and

Internal Orders. This also conforms to Camerons usage of a single

Operating Chart of Accounts.

Recommendation:

One Controlling Area:

CAM1 - Cameron Controlling Area


6/24

Profit Center

Definition: The Profit Center is a subdivision of a business organization set up

for internal management control purposes. Profit Center postings will

derive from the business segment on financial postings. Each

segment may be linked to multiple profit centers.

Profit Centers are used to categorize revenue and expense by

responsibility within the organization.

Profit Centers may or may not be linked to specific Company Codes;

however, they are linked to only one Controlling Area.

Profit Centers are grouped in a standard hierarchy so they roll into a

defined management structure. All Profit Centers must be assigned to

the standard hierarchy.


7/24

Profit Centercontinued

Optimus Design:

Profit Center will be the lowest possible level for which a P/L and

Balance Sheet are generated. Profit Centers will be arranged in a

hierarchical manner to enable roll-up reporting functionality. The

Cameron management structure will be represented by the Profit

Center Standard Hierarchy.

Profit Center balancing will also be possible using the features of the

New GL. This functionality will facilitate balanced books at all levels of

the Profit Center Hierarchy.

Current Profit Centers 1,291 representing various plant locations &organizational groupings

Future Profit Centers 12 representing Divisions


8/24

Profit Center Hierarchy

Profit center = Division

Profit centers & profit center groups are 4 digit characters

- Currently use 4 digits for PC, up to 10 for PC group, SAP design allows up to 10character field

Hierarchy starts at the group/segment level and provides flexibility fordivisions


9/24

Profit Center Hierarchy continued

SEG = Profit

Center Group

DIV = ProfitCenter

SEG DIV Description

1000 Corporate

1100 Corporate

2000 Process & Compression Systems

2100 Centrifugal Compression

2200 Reciprocating Compression

2300 Process Systems

3000 Valves & Measurements

3100 Distributed Valves

3200 Process & Engineered Valves

3300 Flow Management Systems

3400 Measurement

4000 Drilling & Production Systems

4100 Drilling

4200 Surface

4300 Subsea

4400 Flow Control


10/24

Cost Center

Definition:

A Cost Center is an organizational unit representing a clearly defined

location or responsibility where costs are incurred.

Cost Centers are linked to a single Controlling Area, a single Profit

Center, and a single Company Code.

Both planned and actual costs can be measured in a Cost Center.

Cost Centers are organized into hierarchies, the primary one being

the Standard Cost Center Hierarchy, where all cost centers must be

assigned.

Additional hierarchies may be created for internal reporting and

allocation requirements.


11/24

Cost Centercontinued

Optimus Design:

Cost Centers will be used to derive functional level detail of

costs/expenses within a Profit Center. Each Cost Center will have a

unique ID and be assigned to a specific Profit Center.

Following is the criteria that will be considered in defining Camerons cost

centers: Managerial responsibility can be clearly defined

Only one function can be attributed to the proposed Cost Center

Lowest level of budget responsibility

Costs flowing to the proposed Cost Center are material

Cannot cross physical locations and/or legal entities


12/24


Optimus Design:

Roll-up reporting of Cost Centers is achieved through the Cost Center

Hierarchy. As a general rule, Cost Centers have both employees and

assets assigned to them.

Cost Centers are not considered temporary events whose purpose is to

capture cost. Other SAP cost objects such as Internal Orders andProjects Systems are to be used when a life expectancy exists

surrounding cost collection.


13/24


Cost Center Smart Numbering& Master Data Considerations

Character Fixed or Data

Field Variable Control

Cost Center 10 Variable Finance

Company Code 4 Fixed Finance

Country 2 Fixed Finance

Cost Center Category 1 Fixed Finance

Functional Area 16 Variable Finance

Profit Center 10 Variable Finance

Plant 4 Fixed Logistics


14/24


Current Master Data Considerations Involving Plants:

Current design largely has an equivalence of plant = profit center

Today Cameron has 454 plants set-up in SAP

About 25% of profit centers are not tied to a plant

Cost centers most frequently not plant related are in Sales & Service


15/24


Cost Center Category

Direct Labor 1

Indirect Labor & Overhead 2

Production Period Cost 3

Service, Repair & Rental 4

Selling & Marketing Expense 5

Administrative Expense 6

Variable

OVMC

SG&A


16/24


Functional Unique Profit Ctr

Area (3) ID (3) / Plant (4)

774 C36 9707

Assembly CS =97

& Test Okla City = 07

Current Cost Center Structure


17/24


Cost Ctr Unique

Profit Ctr (3) Plant (4) Category (1) ID (2) Comments

220 9703 1 XX 10 Digits

Maximum smart numbering

Recip Houston Direct Labor Maintained as master data

Plant code ~75%

220 9999 5 XX 10 DigitsNon-Plant code ~ 25%

Recip Non-Plant Selling & Mkt Unique ID only 2 digit

May need alpha/numeric

Proposed Cost Center Structure


18/24


Proposed Cost Center Structure 8/23/10

Profit Center (4) Cost Center Category (1) Unique ID (3)

2200 5 xxx

Reciprocating Comp Selling & Mkt


19/24

Cost Center Hierarchy

Standard Cost Center Hierarchy Considerations

Build up to company codeBuild up to profit center,

alternate to company code

Inconsistent group structures Consistent group structures

Includes Variable Cost rollupfor Mfg + OVMC

Variable Cost rollup eliminated

Hierarchy by profit center Hierarchy by plant & non-plant

Current Future

Structure does not reflect FAC Structure reflects FAC


20/24

Cost Center Hierarchy continued

Current Standard Cost Center Hierarchy Overview

TOP000xxxx TOTAL COMPANY CODE

G5CCxxxxxx TOTAL STANDARD COST CENTER GROUPS

G4VCxxxxxx TOTAL VARIABLE COST

G3TMxxxxxx TOTAL MANUFACTURING VARIANCES

G2MFxxxxxx TOTAL DIRECT LABOR & PROD OVHDG1MDxxxxxx DIRECT LABOR

G1MIxxxxxx INDIRECT OVERHEAD

G3TVxxxxxx TOTAL OVMC

G4PCxxxxxx TOTAL PERIOD COSTS

G3TPxxxxxx TOTAL PRODUCTION PERIOD COSTSG3TSxxxxxx TOTAL SELLING & MARKETING EXPENSE

G3TAxxxxxx TOTAL ADMINISTRATIVE EXPENSE

Note: Level 1 & 2 purposely omitted from OVMC and Period Cost


21/24

Cost Center Hierarchy continued

Proposed Standard Cost Center Hierarchy Overview

5T00002200 TOTAL PROFIT CENTER

4C22005000 TOTAL COMPANY CODE

3P22009703 TOTAL PLANT COST

2M22009703 TOTAL MANUFACTURING VARIANCES1M22009703 TOTAL DIRECT LABOR & PROD OVHD

MD22009703 DIRECT LABOR

MI22009703 INDIRECT OVERHEAD

1P22009703 TOTAL PRODUCTION PERIOD COSTS

2V22009703 TOTAL OVMC2S22009703 TOTAL SG&A PERIOD COSTS

Note: Level 1 purposely omitted from OVMC and Period Cost


22/24

Cost Center Hierarchy continuedCAMERON STANDARD COST CENTER GROUP HIERARCHY

Old Company Code = 9700, Profit Center = 9720, Plant = 9703

New Company Code = 5000, Profit Center = 220, Plant = 9703

TOTAL PROFIT CENTER 5T00002200

TOP0009700 TOTAL COMPANY CODE 4C22005000

G5CC009703 TOTAL PLANT COST CENTER GROUPS 3P22009703

(for cost centers tied to a plant)

G4VC009703 TOTAL VARIABLE COST

G3TM009703 TOTAL MANUFACTURING VARIANCES 2M22009703

G2MF009703 TOTAL DIRECT LABOR & PROD OVHD 1M22009703

G1MD009703 DIRECT LABOR MD22009703

G1MI009703 INDIRECT OVERHEAD MI22009703

TOTAL PRODUCTION PERIOD COST 1P22009703

G5CC009700 TOTAL PLANT COST CENTER GROUPS 3N22005000

(for cost centers not tied to a plant)

G4VC009700 TOTAL VARIABLE COST

G3TM009700 TOTAL MANUFACTURING VARIANCES 2N22005000

G2MF009700 TOTAL DIRECT LABOR & PROD OVHD 1N22005000

G1MD009700 DIRECT LABOR ND22005000

G1MI009700 INDIRECT OVERHEAD NI22005000

TOTAL PRODUCTION PERIOD COST 1Q22005000

CURRENT HIERARCHY FUTURE HIERARCHY


23/24

Approvals Needed

Operating Concern

Controlling Area

Profit Center

Profit Center Hierarchy

Cost Centers

Cost Center Hierarchy


24/24

Questions ???

Documents

CO Master Data Review 2010 Aug 23