Operating concern (SAP Library)

Operating concern

Definition

The operating concern represents a part of an organization for which the sales market is structured in a uniform manner. By setting off the costs against the revenues, you can calculate an operating profit for individual profitability segments, which are defined by a combination of classifying characteristics (for example, product group, customer group, country, and distribution channel). The market segments of each operating concern are displayed as profitability segments.

Use

If your enterprise has or plans to have uniform controlling structures, it makes sense to set up uniform structures for profitability analysis. Whether you set up one or several logical operating concerns depends on whether management of your enterprise is centralized or decentralized.

One operating concern

Within each operating concern:

There are several characteristics that you can use to define your profitability segments
There are several value fields, which describe the structure of contribution margin accounting (for key figure schemes)
Earnings can evaluated without any constraints (that is, profitability segments can be aggregated in a flexible way).

This means that, for all units in the enterprise that are assigned to the same operating concern:

There is consistency in the characteristics and values fields used in profitability analysis
The same currency is used in each case.

Several operating concerns

It may make sense to create several operating concerns, if:

Enterprise areas that act independently of each other are to be portrayed
There are enterprise areas that require a single specific market segmentation

If you work with several operating concerns:

Each operating concern can have an independent structure (with its own characteristics and value fields)
Valuations within each operating concern can be carried out without constraints
Structures can be made consistent in terms of the organization (if you wish)

Valuations:

The organizational units of the R/3 System are among the fixed characteristics of profitability analysis and are thus always available for valuations within the operating concern.

Reporting activities for profitability analysis focus on the representation of a contribution margin for individual market segments and their aggregations (planned and actual).

For valuations that aggregate profitability segments from different operating concerns:

You must ensure that the aggregated profitability segments fit together logically
You may use the Business Information Warehouse (BW) or the Executive Information System (EIS).
You must bear in mind that the resources required depend partly on the extent to which the affected operating concerns differ

Actual data are transferred to profitability analysis from different components in the R/3 System (SD, FI, MM). You can also extract data from external systems.

Several controlling areas can be assigned to an operating concern.

For more information, see:

Operating Concern: Notes

Integration

Operating Concern: Integration (Organizational Units)