User-Blog for SAP Business ByDesign

Pitfalls in organizational management


To ensure the structure and transparency of your company, good organizational management is indispensable. Modeling the organizational structure based on an organizational chart makes it easier to monitor the human resources and business economic processes and is helpful for the task control as well as the functionalities of the roles. This creation frequently entails you having to known your own organizational structure.

For companies with several business units and subsidiaries, a parent holding company should be created. This ensures that future developments will be adopted in the structure. This is advantageous if companies wish to establish further subsidiaries abroad and hence open up other markets. Sales divisions should be located on one level below a sales organization. This facilitates reporting on a revenue and cost level.

The organizational structure comprises organizational units. The nodes represent a department or a corporate division. A typical organizational structure could be the following, which can also be mapped in just the same way in SAP Business ByDesign:

This hierarchical representation can refer to diverse factors, for example:

  • Legal hierarchy – Assignment of the organizational units to the company/operational facilities
  • Financial hierarchy – Aggregation of the costs and profits
  • Reporting structure hierarchy – Display of responsibilities and transfer of tasks
  • Functional hierarchy – Transfer of tasks and approvals with business and economic functions

To comply with the hierarchical assignments, all organizational units need to be configured correctly by linking these with one another and specifying the definitions – the definition determining which role the unit assumes here. For instance, a unit can be a company or a cost center. Furthermore, it is necessary to classify the functions that determine the work centers suggested by the system and access rights for the end user.

Valid-from date

Changes that are made are always active from the selected “Valid-from” date and therefore not necessarily according to the system date. This means the activation date and validity are interdependent, as all data changes are only adopted in the active version. In this case, only parts of the organizational structure can be released.

Start date

The start date is the initial Valid-from date that you use when first setting up your organizational structure. This date should be chosen carefully. Before you create an organizational unit, indicate the unique start date that is to be used for the entire organizational structure. This should be shortly before the transition to the SAP Business ByDesign system, so that the data presented in the system reflects the real state of your company at the time. As soon as you have selected your start date, use this as a unique valid-from date for all setup activities associated with the initial structure and for the definition or functional assignments. This date is typically defined as the first of a month.

Time periods and validities

The valid-from date and start date serve for ascertaining validities of the organizational units. You can use the Time Periods tab to change the validity of your organizational units and associated properties. You can change the validity of a organizational unit as follows:

  • Move start date to a future date
  • Move end date to an earlier date
  • Move start and end date

It is only possible to change dates if no business documents from applications use the organizational unit during this time period. Otherwise error messages occur. You can display open business documents in the Organizational Unit Overview, so as to avoid shortening time periods and resulting inconsistencies in business documents.

Consistency checking

To describe binding relations between organizational units, the consistency needs to be fulfilled. A parent company typically needs to be assigned to a cost center for this. If you indicate a cost center, a cost center type must also be selected as a mandatory measure.

Assignment of employees and service agents

The organizational unit to which the employees and service agents are assigned defines their cost center, business office and superior.

Branches for logistics integration

A branch is automatically created in the system for each corporate location, this then approved for use in the logistics.

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