Profit Center Scenarios (Bibliothèque R/3 - Enterprise Modelling

Profit Center Scenarios

Definition

Profit-Center scenarios use profit centers to display strategic business units. Profit centers may cover more than one legally independent organizational unit.

Use

The main difference between profit centers and business areas is that profit centers are used for internal management whereas business areas are geared more towards external purposes.

Whereas profit centers use key figures such as return on investment and profit-sales ratio to evaluate performance, business areas focus on balance sheets and profit and loss statements.

A typical profit center could look as follows:

For more information about the graphic, see. Portrayal in the Structure Modeler.

It makes sense to represent strategic business units as profit centers if

Technologies and business processes used in different business units for value-added purposes are more or less standard

The markets of the various business units have a uniform structure

It is not planned to exclude individual business areas for legal reasons

Transfer prices are used when processing material or service transactions between business areas.

It is likely that strategic business areas will be restructured or changed regularly.

Several hierarchical structures (profit-oriented, functional, regional and so on) are required.

The most important operational requirements for strategic business units are centered around reporting,

Information systems, assignments and planning are to be used more flexibly.