Personnel Cost PlanningPersonnel Cost Planningthe past, the present, the futurethe past, the present, the future

Personnel Cost PlanningPersonnel Cost Planningthe past, the present, the futurethe past, the present, the future

International HERUG conferenceInternational HERUG conference26th - 28th March 200226th - 28th March 2002Melbourne, AustraliaMelbourne, Australia

International HERUG conferenceInternational HERUG conference26th - 28th March 200226th - 28th March 2002Melbourne, AustraliaMelbourne, Australia

Henny ClaessensHenny ClaessensUniversiteit MaastrichtUniversiteit Maastricht

Henny ClaessensHenny ClaessensUniversiteit MaastrichtUniversiteit Maastricht

AgendaAgenda AgendaAgenda

1. Universiteit Maastricht1. Universiteit Maastricht- Introduction of the university- Introduction of the university

2. The past2. The past- HERUG 2001 development request # 13- HERUG 2001 development request # 13

3. The present3. The present- Pecaso Cost Planner, add on solution- Pecaso Cost Planner, add on solution

4. The future4. The future- SAP White Paper Personnel Cost Planning- SAP White Paper Personnel Cost Planning

5. Summary5. Summary

1. Universiteit Maastricht1. Universiteit Maastricht- Introduction of the university- Introduction of the university

2. The past2. The past- HERUG 2001 development request # 13- HERUG 2001 development request # 13

3. The present3. The present- Pecaso Cost Planner, add on solution- Pecaso Cost Planner, add on solution

4. The future4. The future- SAP White Paper Personnel Cost Planning- SAP White Paper Personnel Cost Planning

5. Summary5. Summary

Universiteit MaastrichtUniversiteit MaastrichtIntroductionIntroduction

7 faculties

Faculty of Medicine 1974Faculty of Health Sciences 1980Faculty of Law 1982Faculty of Economics & Business Administration 1984Faculty of Arts and Culture 1991Faculty of Science 1992Faculty of Psychology 1995

11.000 students 3.000 staff

SAP modules implemented:- HR 1999- FI, CO, MM, SD, AM 2001- Cost Planner (integrated add on; not SAP) 2002

7 faculties

Faculty of Medicine 1974Faculty of Health Sciences 1980Faculty of Law 1982Faculty of Economics & Business Administration 1984Faculty of Arts and Culture 1991Faculty of Science 1992Faculty of Psychology 1995

11.000 students 3.000 staff

SAP modules implemented:- HR 1999- FI, CO, MM, SD, AM 2001- Cost Planner (integrated add on; not SAP) 2002

Students and staffStudents and staff

Universiteit MaastrichtUniversiteit MaastrichtIntroductionIntroduction

0

2000

4000

6000

8000

10000

12000

14000

StudentsStudents

StaffStaff

1980 1985 1990 1995 2000

Universiteit MaastrichtUniversiteit MaastrichtUM’s missionUM’s mission

• Educational innovation

• Problem Based Learning Curriculum

• International orientation

• Geographically situated in a tri-lingual region (Dutch, French, German)

• Growing part of Curriculum is offered in English

• Educational innovation

• Problem Based Learning Curriculum

• International orientation

• Geographically situated in a tri-lingual region (Dutch, French, German)

• Growing part of Curriculum is offered in English

You can’t manage You can’t manage what you can’t measurewhat you can’t measure

Peter DruckerPeter Drucker

You can’t manage You can’t manage what you can’t measurewhat you can’t measure

Peter DruckerPeter Drucker

Extremely true in a growing university !Extremely true in a growing university !Extremely true in a growing university !Extremely true in a growing university !

The processThe process

UM’s Personnel Cost Planning (2 cycles)UM’s Personnel Cost Planning (2 cycles)

The processThe process

UM’s Personnel Cost Planning (2 cycles)UM’s Personnel Cost Planning (2 cycles) 1. Monthly rolling forecast within the year

Months within the year (cumulation YTD actuals + planned months) Increasing YTD actuals/decreasing planning period within the year:

Actual YTD 2002 Planned months 2002 Total– Jan-Apr May-Dec xxx– Jan-May Jun-Dec yyy– Jan-Jun Jul-Dec zzz– Etc. Etc. ….

2. Yearly rolling forecast for next 5 years After current year:

Planning period Total– 2003-2007 XXX– 2004-2008 YYY– 2005-2009 ZZZ– Etc. ….

1. Monthly rolling forecast within the year Months within the year (cumulation YTD actuals + planned months) Increasing YTD actuals/decreasing planning period within the year:

Actual YTD 2002 Planned months 2002 Total– Jan-Apr May-Dec xxx– Jan-May Jun-Dec yyy– Jan-Jun Jul-Dec zzz– Etc. Etc. ….

2. Yearly rolling forecast for next 5 years After current year:

Planning period Total– 2003-2007 XXX– 2004-2008 YYY– 2005-2009 ZZZ– Etc. ….

The past (I)The past (I)UM’s requirements for Personnel Cost UM’s requirements for Personnel Cost

PlanningPlanning

The past (I)The past (I)UM’s requirements for Personnel Cost UM’s requirements for Personnel Cost

PlanningPlanning 1. Planning occupied positions (P)

Periodic pay increases starting from …. (dd/mm/yy) Change in working time starting from …. (dd/mm/yy) Change in PSgroup/level starting from …. (dd/mm/yy) End of employment contract starting from …. (dd/mm/yy) Change in cost distribution starting from …. (dd/mm/yy)

2. Planning vacant positions (S) GPL based (Gemiddelde Personeels Last)In English: APC based (Average Personnel Cost)

3. Rolling forecast within the year Months within current year; actuals YTD + planned periods

4. Rolling forecast for next 5 years Beyond current year

1. Planning occupied positions (P) Periodic pay increases starting from …. (dd/mm/yy) Change in working time starting from …. (dd/mm/yy) Change in PSgroup/level starting from …. (dd/mm/yy) End of employment contract starting from …. (dd/mm/yy) Change in cost distribution starting from …. (dd/mm/yy)

2. Planning vacant positions (S) GPL based (Gemiddelde Personeels Last)In English: APC based (Average Personnel Cost)

3. Rolling forecast within the year Months within current year; actuals YTD + planned periods

4. Rolling forecast for next 5 years Beyond current year

The past (II) The past (II) The past (II) The past (II) 1986: Personnel Planning System UM

Stand alone/tailor made legacy system Central registration of personnel & vacancies High accuracy rate

– Planned-actual comparisons: <2%– ‘Sets the tone’ for everything that will follow ….

1999: SAP HR productive Decentral registration

– Starting point: registration at the source Interface from SAP HR to PPS

– Planned-actual comparisons: >10%• Organisation UM was not ready for this

– Decentral registration of vacancies did not ‘take off’• ‘Recruitment’ module not used consistently• Matter of: Organisational change !

1986: Personnel Planning System UM Stand alone/tailor made legacy system Central registration of personnel & vacancies High accuracy rate

– Planned-actual comparisons: <2%– ‘Sets the tone’ for everything that will follow ….

1999: SAP HR productive Decentral registration

– Starting point: registration at the source Interface from SAP HR to PPS

– Planned-actual comparisons: >10%• Organisation UM was not ready for this

– Decentral registration of vacancies did not ‘take off’• ‘Recruitment’ module not used consistently• Matter of: Organisational change !

The past (III) The past (III) The past (III) The past (III) 2000: Preliminary study standard SAP/PCP

Projected Pay– Alternative I: based on Jobs (C)– Alternative II: partly based on Jobs (C); partly on Positions (S)– Alternative III: based on Positions (S)

Basic Pay– Alternative I: generic percentage raise for employers’ costs– Alternative II: dummy wage type for employers’ costs

Payroll Results– No alternative: because of external (non SAP) Payroll

2000: Findings of preliminary study Not flexible enough for UM’s personnel cost planning

– In particular ‘soft’ future oriented changes (starting from…) Reason for: HERUG development request # 13

– Next major release; R/3 enterprise; won’t wait for this …. – Temporary solution: Cost Planner (ROI 2-3 years)

2000: Preliminary study standard SAP/PCP Projected Pay

– Alternative I: based on Jobs (C)– Alternative II: partly based on Jobs (C); partly on Positions (S)– Alternative III: based on Positions (S)

Basic Pay– Alternative I: generic percentage raise for employers’ costs– Alternative II: dummy wage type for employers’ costs

Payroll Results– No alternative: because of external (non SAP) Payroll

2000: Findings of preliminary study Not flexible enough for UM’s personnel cost planning

– In particular ‘soft’ future oriented changes (starting from…) Reason for: HERUG development request # 13

– Next major release; R/3 enterprise; won’t wait for this …. – Temporary solution: Cost Planner (ROI 2-3 years)

The past (IV) The past (IV) The past (IV) The past (IV)

2000: HERUG development request # 13 Description

– Personnel Cost Planning in standard R/3 (release 4.6) is not flexible enough for our needs. We would like to use Personnel Cost Planning as follows:• Basic Pay for employees (Infotype 0008)• Projected Pay for vacant positions (Infotype 1018)

– More flexibility is needed with regard to:• Employee specific scheduled payments• Expiration date of the job assignment

– For planning purposes these data have to be manipulated separately without causing changes in real basic pay data (Infotype 0008)

Business motivation– Personnel Cost Planning in standard R/3 does not meet the business

needs of the university. Personnel Costs typically represent 70% of total costs of the university. So relatively small differences tend to have substantial financial impact

2000: HERUG development request # 13 Description

– Personnel Cost Planning in standard R/3 (release 4.6) is not flexible enough for our needs. We would like to use Personnel Cost Planning as follows:• Basic Pay for employees (Infotype 0008)• Projected Pay for vacant positions (Infotype 1018)

– More flexibility is needed with regard to:• Employee specific scheduled payments• Expiration date of the job assignment

– For planning purposes these data have to be manipulated separately without causing changes in real basic pay data (Infotype 0008)

Business motivation– Personnel Cost Planning in standard R/3 does not meet the business

needs of the university. Personnel Costs typically represent 70% of total costs of the university. So relatively small differences tend to have substantial financial impact

The past (V) The past (V) The past (V) The past (V) 2001: Pilot Cost Planner

Flexibility occupied positions– Additional Infotype 9008 for planning purposes only– Limited customizing during pilot

GO-decision (July 2001)– Completing the customizing– Developing tailor made enhancements

• Drill down functionality from Cost Planner to HR• Scheduled pay increases for 72 months rolling forecast

Post pilot finding (December 2001)– No decentral use because of Chart of accounts structure…..

Findings of the pilot: Cost Planner meets all essential functional requirements Additional programming required for:

– Drill down reports from Cost Planner to HR– Scheduled pay increases for 6 year period

• Simulating 72 consecutive RPITUM00 runs in just one run

2001: Pilot Cost Planner Flexibility occupied positions

– Additional Infotype 9008 for planning purposes only– Limited customizing during pilot

GO-decision (July 2001)– Completing the customizing– Developing tailor made enhancements

• Drill down functionality from Cost Planner to HR• Scheduled pay increases for 72 months rolling forecast

Post pilot finding (December 2001)– No decentral use because of Chart of accounts structure…..

Findings of the pilot: Cost Planner meets all essential functional requirements Additional programming required for:

– Drill down reports from Cost Planner to HR– Scheduled pay increases for 6 year period

• Simulating 72 consecutive RPITUM00 runs in just one run

C

P IT 0008basic pay

detailed info?

Wage element:• basic pay (PSgroup/period)

IT 0014 fixed additional

pay

S

3000

27

3000

OM(vacant positions)

yes

no

IT 1011 work schedule

IT 1015 cost planning

CO

K

PA (occupied positions)

Wage element:• GPL (average personnel costs)

E.g..:•work schedule•GPL•direct valuation•...

IT 0001organisation

IT 1007 vacancy

O

PERSONNEL COST PLANNING• basic pay for occupied positions (P)• projected pay for vacant positions (S)

IT 1015 cost planning

IT 1018 cost distribution

Cost distribution:• internal orders (OD)

IT 0015 variable additional

pay

95%

5%

Wage elements:• additional pay

Wage elements:• additional pay

OD

HR

2000700

150

The present (I) The present (I) Integration HR Cost Planner COIntegration HR Cost Planner CO The present (I) The present (I) Integration HR Cost Planner COIntegration HR Cost Planner CO

CO

Cost Planner

HR• Infotype 0008Infotype 0008• Infotype 0014Infotype 0014• Infotype 0015Infotype 0015

• Infotype 0008Infotype 0008• Infotype 0014Infotype 0014• Infotype 0015Infotype 0015

Cost elementCost elementCost elementCost element

Wage-elementWage-elementWage-elementWage-element

UM specific development UM specific development of drill down functionalityof drill down functionality(two steps):(two steps):1. K or OD 1. K or OD S or P S or P2. Detail of S or P2. Detail of S or P

UM specific development UM specific development of drill down functionalityof drill down functionality(two steps):(two steps):1. K or OD 1. K or OD S or P S or P2. Detail of S or P2. Detail of S or P

Drill down functions within Drill down functions within standard Cost Planner:standard Cost Planner:• cost center (K)cost center (K)• request (OD)request (OD)• object (O, P, S, C)object (O, P, S, C)

Drill down functions within Drill down functions within standard Cost Planner:standard Cost Planner:• cost center (K)cost center (K)• request (OD)request (OD)• object (O, P, S, C)object (O, P, S, C)

• Infotype 9008Infotype 9008• Infotype 9008Infotype 9008

Wage-typeWage-typeWage-typeWage-type

The present (II)The present (II) The present (II)The present (II)

‘‘Standard’ Standard’ Cost Planner Cost Planner

functionsfunctions

‘‘Standard’ Standard’ Cost Planner Cost Planner

functionsfunctions

Cost PlannerCost Planner

Plan Scenario Plan Scenario AdministrationAdministration

The present (III)The present (III) The present (III)The present (III)

Personnel Cost Planning Personnel Cost Planning ‘finalized’ ‘finalized’

when transferredwhen transferredfrom Cost Plannerfrom Cost Planner

to COto CO……....

(HR Plan Version)(HR Plan Version)

Personnel Cost Planning Personnel Cost Planning ‘finalized’ ‘finalized’

when transferredwhen transferredfrom Cost Plannerfrom Cost Planner

to COto CO……....

(HR Plan Version)(HR Plan Version)

The present (IV)The present (IV) The present (IV)The present (IV)

UM specific ‘drill down’functions

from Cost Plannerto HR

Step 1. Drill down at large

- Cost Center (K)- Internal order (OD)

Step 2. Drill down detail

- Person (P)- Vacant Position (S)

UM specific ‘drill down’UM specific ‘drill down’functionsfunctions

from Cost Plannerfrom Cost Plannerto HRto HR

Step 1. Drill down at largeStep 1. Drill down at large

- Cost - Cost Center Center (K)(K)- Internal order (OD)- Internal order (OD)

Step 2. Drill down detailStep 2. Drill down detail

- Person (P)- Person (P)- Vacant Position (S)- Vacant Position (S)

The future The future The future The future 2002: R/3 Enterprise (‘4.7a’)

Ramp up (first shipments): start in July 2002 Far superior to the previous SAP Personnel Cost Planning solution

– Based on separate planning Infotype– Data transfer to SAP BW for detailed analyses– SAP BW contains Personnel Cost Planning InfoCube– Continious improvements: web, portal, workflow

Install on DEV; install on PRD ?

2003: R/3 Enterprise (‘4.7b’) Unrestricted availability: in the beginning of 2003 Install on PRD; expected to be mature

White Paper: see download section SAPnet www.sap.com/solutions/hr/factsheets.asp

2002: R/3 Enterprise (‘4.7a’) Ramp up (first shipments): start in July 2002 Far superior to the previous SAP Personnel Cost Planning solution

– Based on separate planning Infotype– Data transfer to SAP BW for detailed analyses– SAP BW contains Personnel Cost Planning InfoCube– Continious improvements: web, portal, workflow

Install on DEV; install on PRD ?

2003: R/3 Enterprise (‘4.7b’) Unrestricted availability: in the beginning of 2003 Install on PRD; expected to be mature

White Paper: see download section SAPnet www.sap.com/solutions/hr/factsheets.asp

AgendaAgenda AgendaAgenda

1. Universiteit Maastricht1. Universiteit Maastricht- Brief introduction of the university- Brief introduction of the university

2. The past2. The past- HERUG 2001 development request # 13- HERUG 2001 development request # 13

3. The present3. The present- Pecaso Cost Planner, add on solution- Pecaso Cost Planner, add on solution

4. The future4. The future- SAP White Paper Personnel Cost Planning- SAP White Paper Personnel Cost Planning

5. Summary5. Summary

1. Universiteit Maastricht1. Universiteit Maastricht- Brief introduction of the university- Brief introduction of the university

2. The past2. The past- HERUG 2001 development request # 13- HERUG 2001 development request # 13

3. The present3. The present- Pecaso Cost Planner, add on solution- Pecaso Cost Planner, add on solution

4. The future4. The future- SAP White Paper Personnel Cost Planning- SAP White Paper Personnel Cost Planning

5. Summary5. Summary

Planning run1. View of cost center (K)

2. View of requests (OD)

3. Detailed view of requests (cost objects: persons, vacant positions, organisational units)

4. Detailed view of personnel costs (wage elements)

1

2

3

4

Questions ?Questions ?Questions ?Questions ?

E henny.claessens@bu.unimaas.nlE henny.claessens@bu.unimaas.nl

T +31 43 388 2510T +31 43 388 2510

F +31 43 388 4890F +31 43 388 4890

W www.unimaas.nlW www.unimaas.nl

E henny.claessens@bu.unimaas.nlE henny.claessens@bu.unimaas.nl

T +31 43 388 2510T +31 43 388 2510

F +31 43 388 4890F +31 43 388 4890

W www.unimaas.nlW www.unimaas.nl