Business Area Structure. January 5, 2018

Transcription

1 Business Area Structure January 5, 2018

2 OVERALL STRUCTURE CAMPUS Groups Segments SEGMENTS Groups Business Areas BUSINESS AREAS Groups Cost Centers COST CENTERS Groups Internal Orders INTERNAL ORDERS/WBS ELEMENTS ( accounts ) All transactions post to either internal orders or WBS elements

3 INTERNAL ORDERS INTERNAL ORDERS/WBS Elements ( accounts ) All transactions post to either internal orders or WBS elements IO s (and WBSE s the equivalent for faculty accounts) are the lowest level of the new structure In the future, IO s will represent accounts I.e. IO will be required on every transaction All other organizational data elements will be derived from the IO Cost Center Business Area Segment Campus Income Statements (revenue, expenses, transfers) will be available for all IO s Available Balance will be calculated for each IO

4 COST CENTERS COST CENTERS Groups Internal Orders Cost centers represent organizational units to which IO s and positions can be assigned Every cost center in the Finance structure will have an equivalent organizational unit in the HR structure Cost centers for a department can be arranged in a three-level hierarchy I.e. a cost center can roll-up to another cost center Level names are Department (top-level), Sub-Department, and Program At PNW/PFW, of the 278 cost centers in the future design, only 37 are at the Sub-Department level E.g. Athletic Training is Sub-Department within PFW Athletics Admin No Program cost centers are planned Department cost centers should represent units that are accountable to an annual budget Full annual budgets (i.e. by Cat 3 commitment item) will be required for all dept-level cost centers Annual budgets will be optional for sub-dept and program-level cost centers But lower level cost centers should still represent units which own positions, have a leader, and have accountability for determining how funds are used Income Statements (revenue, expenses, transfers) will be available for all cost centers FTE and Headcount will be available for all cost centers

5 BUSINESS AREA BUSINESS AREAS Groups Cost Centers Fundamentally, a business area is simply a grouping of cost centers Business Area will be similar to Major Unit, but is not an exact replacement In the current design for the future state, business areas represent the grouping of cost centers for which each Direct Report to an Executive is responsible Executives are defined as the President, Provost, Treasurer and Exec VP for Research & Partnerships, and regional equivalents E.g. the Asst Vice Chancellor for Finance and Administration at PFW is responsible for three cost centers Those three cost centers are grouped to form a business area If an Executive s Direct Report is not responsible for any cost centers, no business area exists If an Executive s Direct Report is responsible for only one cost center, a business area is still created for consistency across the Direct Report level SAP will automatically produce balance sheets for each business area In addition to the income statements, budgets, and FTE counts available at lower levels

6 BUSINESS AREA SEGMENTS Groups Business Areas Segments are simply groupings of business areas In the future state, segments will represent the grouping of business areas for which each Executive is responsible No financial information is available for segments that isn t already available for all business areas

7 BUSINESS AREA CAMPUS Groups Segments Campus reporting in the future is accomplished by grouping segments

8 OVERALL STRUCTURE Information Available Structure CAMPUS Income Statement Budget & FTE Balance Sheet SEGMENTS Business Areas for which each Executive is responsible BUSINESS AREAS Cost centers for which each Direct Report to an Executive is responsible COST CENTERS Organizational units with IO s and Positions Available Balance INTERNAL ORDERS/WBS Elements ( accounts ) All transactions post to either internal orders or WBS elements

9 ADDITIONAL REPORTING OPTIONS INTERNAL ORDERS/WBS Elements ( accounts ) All transactions post to either internal orders or WBS elements Every IO will have several attributes to improve reporting Functional Area Categorizes all IO s according to NACUBO-defined functionalization codes Used for IPEDS, annual financial statement reporting Funded Program Type Categorizes all IO s according to a Purdue-defined list of types which identify restrictions on the funds and, in some cases, activities that are of significant interest to the institution E.g. graduate vs. undergraduate scholarships, faculty startup, professorships, state line items, digital education programs Department Account Classification Categorizes all IO s according to a Purdue-defined list of classifications that will aid with SoFA and departmental reporting Classifications are rolled up into three Institutional Groupings: Operating, Faculty Allocations, Non-Operating Institutional Attribute Identifies IO s associated with activities of specific interest to the President Currently: Diversity, Development, Marketing, Information Technology, Management Consulting Institutional Initiative Identifies accounts associated with Purdue Moves-level initiatives Public/NonPublic Available/Unavailable

10 ADDITIONAL REPORTING OPTIONS COST CENTERS Organizational units with IO s and Positions Cost centers can also be categorized according to a Purdue-defined list Values for this list have not yet been determined Could be used to identify similar cost centers across campuses E.g. Purchasing, Accounting, Libraries, IT, etc. Advantage of cost center categorization is the inclusion of position information (FTE, etc.) Need to ensure any values used at the cost center level are consistent with IO reporting values E.g. If a cost center is categorized as administrative, the functional areas for IO s assigned to that cost center should also reflect administrative categorizations