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Why is there only one Operating Concern defined in GBI?

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Hi all,

I have the following question: when looking at the CO structure of the GBI case study, why is there only one, global operating concern defined? According to the definition of an OC, it is the level whereupon profitability analysis is performed. So why is in GBI that has two very distinct business areas not at least two OCs defined (one per business area), if not more (per product)?

As a follow-on, what is then the relation between OC and Controlling Area? I am looking for a plain English explanation that I can also use for teaching purposes.

Thank you in advance for reading!

Regards,

Gerhard

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Answers (2)

Answers (2)

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Hi Gerhard,

I hope my reply is not too late.

I agree with you.  Profitability analysis is typically done at a detailed level - by market segments, which may be defined by geographical segments, customer groupings, product groupings, salesforce grouping, etc.  CO-PA does support profitability analysis at such detailed levels.

After defining an operating concern and activating it, the system generates a series of database tables for the operating concern.  I took a screenshot of the (partial) structure of the "master" table for the global GBI operating concern, GL00, from the GBI 2.2 system I am using, below:

As you can see, with such a table structure, CO-PA is capable of capturing profitability information at a very detailed level for reporting and analysis.

You may also notice that operating concern is not a field in the table.  The reason is, the entire table (as well as its related tables in the same series) is used only for operating concern GL00.  Its name is even hard-coded in the last 4 characters of the names of these tables.  When CO-PA reports are executed in SAP ECC, they retrieve data from only one series of tables, i.e., only data of only one operating concern can be reported.

Back to your question: Why is there only one operating concern and not two?  The wisdom of defining one global operating concern is that profitability data of both controlling areas (Europe and North America) will be updated into the same series of database tables and reported together.  If there had been two separate operating concerns for the two controlling areas, there would have been two series of database tables, making profitability analysis across the two areas difficult, if not impossible.

Let me know if you need further clarifications.

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That is a bit disappointing. Two months that question has been up, and no answer?

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Gerhard,

COAreas are assigned to an Operating Concern.  Profit Center Accounting is done within a COArea for internal profitability analysis of areas of responsibility, like a particular store in retail.  An Operating Concern is the org. level where you perform profitability of external market segments.  As an example, a company may want to know the profitability of several products across various customers in various CoCds.  This is the role of the Operating Concern.

Hope this makes sense.
Bob

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Dear Bob,

Thank you for your reply. However, my question was about the motive why GBI had only one operating concern when it would make sense to define two - one for BI, one for AS. I am not sure why a profitability analysis would not make more sense that way if these types of products are clearly on different markets.

I know that the masterminds behind the GBI case study are also registered here - maybe they could shed some light on the issue?

Thank you!

Regards,

Gerhard