Market Impetus for Actual Cost Allocation
Exponentia teams have experience with many complex implementation projects and challenges
in the manufacturing sector. Our experience shows that SAP MII is the best solution
available in the market for development of Operational Excellence Applications and can
be used to leverage some important strategic initiatives in the company, such as Lean
Manufacturing, Real Time Performance Management, Six Sigma,
Overall Equipment Effectiveness (OEE) and Plant to Supply Chain Integration (P2SC).
However there is a growing demand for costs to be calculated on an actual basis, and
not just in terms of time, but also the dollars associated with it. This demand is very
high especially in the public sector Grants Management environment where sponsors of
Grants are not ready to pay cost on a plan price. They demand actual price and hours to
reimburse the Grantee.
Our teams with expertise in public sector SAP Software Services and ABAP development are developing a
product that can work as add-on that fits into existing implementation of standard SAP public
sector and provide solution to calculate cost to be allocated on an actual basis, both time and dollar.
Standard SAP Solution Limitations
The standard SAP solution offers a solution to transfer to controlling (CAT7) before payroll is calculated. This results in actual hours but only a plan/standard rate. Since the actual is calculated from Payroll after time transfer to controlling, there is a limitation to calculating actual rate. This allows for the option to report variance and do adjustments from thereon, but limits the option to post only plan cost on an actual basis.
The standard SAP solution offers a solution to transfer to controlling (CAT7) before payroll is calculated. This results in actual hours but only a plan/standard rate. Since the actual is calculated from Payroll after time transfer to controlling, there is a limitation to calculating actual rate. This allows for the option to report variance and do adjustments from thereon, but limits the option to post only plan cost on an actual basis.
Standard SAP solution offers cost allocation at a plan price on actual hours performed. Otherwise, a direct payroll posting on the performing cost object would be necessary as part of the CATS setting. Customers needed a solution to do cost allocation between requesting and performing cost objects on an actual cost and time basis to avoid variances and other hassles .
Standard SAP Solution Limitations
The solution that Exponentia is developing is capable of posting allocation on an actual basis,
both time and cost associated. This solution fits into standard implemented landscape but doesn’t
break any existing architecture (since it works as an add-on independent component). It would
still depend on standard Payroll cluster results such as C1 & WPBP clusters to post allocation on an actual basis.
Its key advantages include:
- • Cost effective, robust, online & real time solution
- • Fits into existing architecture
- • Cost allocation on an actual basis, both cost and time
- • Real time reports
- • Uses payroll cluster as source for posting, so no discrepancies of calculation actual cost
- • Developed by experienced consultants and developers who are in the industry for more than 10 years.
- • Capabilities to report allocated cost either in primary or secondary cost elements./li>