what are criterias for defining various controlling area in oprating concrn

[Former Member]

Hi All,

for a holding with various businesses, I'm looking for criteria or characteristics to:

1- divide client into multiple operating concern? ("best Practice" characteristics)

2- divide an "operating concern" into multiple "controlling area"?

I'm confused in dividing a holding in how many operating concerns and controlling areas?

which solution is better: few operating concern with various controlling area within each one OR more operating concern with fewer controlling area within each operating concern?

Best Regards

[former_member182098]

Though technically it is possible to have multiple operating concerns, it is NOT recommended to have more than ONE.

Create ONE operating concern and assign your controlling area to the same.

Operating Concern : Controlling area is 1 : 1 or 1 : N

Regards,

Ravi

[Former Member]

Dear Ravi Sankar Venna,

thanks for answer,

would you mind please helping me with following question:

I'm looking for criteria or characteristics to divide an "operating concern" into multiple "controlling area"?

Best Regards

[Former Member]

Dear Ravi Sankar Venna,

another question:

our holding operate in wide range businesses such as: manufacturing: detergent, cosmetic, kitchen accessories, and distribution wide range of products, ...

is it proper to have unique operating concern for all them at once?

Thanks in advance

Best Regards

[former_member182098]

Hello,

Operating Concern is defined at Group Level in general. You may have any number of products, product categories etc.

SAP has given sample characteristics in S001. You can copy your operating concern from the standard and add your own customized characteristics. It all depends on business reporting requirements.

If you want reporting on product categories and products, you can add accordingly. There is no specific or rigid rule to have only particular characteristics.

In most of the implementations, the best practice is going with a single operating concern (this is at group level - bird view sort of thing)

Hope this clarifies your doubt.

Regards,

Ravi

[Former Member]

COPA was designed to give you reports based on many products.

Generally you will have one operating concern per KIND of business, i.e. one for insurance, and one for manufacturing, because the value fields and characteristics are just so different.

Controlling areas you generally have one per country, except if there is reason to split them.

Generally, for both objects, fewer is better.

[Former Member]

Dear friends,

according to helpSAP:

"A Controlling Area is the highest level organizational entity within Controlling in which cost and profit analysis takes place (except for PA analysis which takes place within an operating concern).

Organizational unit in an organization that represents a closed system used for cost accounting purposes.

A controlling area is a self-contained unit within a group in which cost accounting can be performed."

but neither mentioned recommends above nor other recommends in helpSAP don't explicitly describe main characteristic according which, someone could divide an operating concern among "controlling areas".

I'm looking for best practice characteristics to divide a complex operating concern in a country to controlling areas.

Best Regards

[Former Member]

as I said earlier, a good rule for controlling areas to follow, is to have one per country code. That way each country will work in its own currency. There is no need to break it down further.

[Former Member]

Dear Piet Strydom,

thanks for your quick response,

there is special situation: our holding produce and distribute wide range of products in A country,

some manufactures in our holding produce same products with various brands (for example Company A and its partner company B produce keyboards under brand X and company C produce the same keyboards with brand Y), because of market uniformity we plan to group them (company A& B&C) in an operating concern, now:

1- is it a correct decision to group all manufactures (with various brands-same products) in one operating concern?

2- if we do so, isn't it right decision to divide each brand manufactures group in a controlling area? in other word we assign for each brand a controlling area? (one controlling area for both company A&B and another controlling area for company C)

Best Regards

Mohammad

Edited by: Mohammad Molana on May 17, 2009 12:19 PM

[Former Member]

HI Mohammad,

What would you achieve by using a controlling area per brand?