Personnel Cost Planning

the past, the present, the future

International HERUG conference
26th - 28th March 2002
Melbourne, Australia
Henny Claessens
Universiteit Maastricht
Agenda
1. Universiteit Maastricht
- Introduction of the university
2. The past
- HERUG 2001 development request # 13
3. The present
- Pecaso Cost Planner, add on solution
4. The future
- SAP White Paper Personnel Cost Planning
5. Summary
Universiteit Maastricht
Introduction
7 faculties

Faculty of Medicine 1974
Faculty of Health Sciences 1980
Faculty of Law 1982
Faculty of Economics & Business Administration 1984
Faculty of Arts and Culture 1991
Faculty of Science 1992
Faculty 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 staff
Universiteit Maastricht
Introduction
0
2000
4000
6000
8000
10000
12000
14000
Students
Staff
1980 1985 1990
1995 2000
Universiteit Maastricht
UMs 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
You cant manage
what you cant measure


Peter Drucker
Extremely true in a growing university !
The process
UMs 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. .
The past (I)
UMs requirements for Personnel Cost
Planning
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)
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)
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 UMs personnel cost planning
In particular soft future oriented changes (starting from)
Reason for: HERUG development request # 13
Next major release; R/3 enterprise; wont wait for this .
Temporary solution: Cost Planner (ROI 2-3 years)
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
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
C
P
IT 0008
basic 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 0001
organisation
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
2000
700
150
The present (I)
Integration HR Cost Planner CO
CO
Cost
Planner
HR
Infotype 0008
Infotype 0014
Infotype 0015
Cost element
Wage-element
UM specific development
of drill down functionality
(two steps):
1. K or OD S or P
2. Detail of S or P
Drill down functions within
standard Cost Planner:
cost center (K)
request (OD)
object (O, P, S, C)
Infotype 9008
Wage-type
The present (II)
Standard
Cost Planner
functions
Cost Planner
Plan Scenario
Administration
The present (III)
Personnel Cost Planning
finalized
when transferred
from Cost Planner
to CO
..
(HR Plan Version)
The present (IV)
UM specific drill down
functions
from Cost Planner
to 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
functions
functions
from Cost Planner
from Cost Planner
to HR
to HR
Step 1. Drill down at large Step 1. Drill down at large
- Cost - Cost Center Center (K) (K)
- Internal order (OD) - Internal order (OD)
Step 2. Drill down detail Step 2. Drill down detail
- Person (P) - Person (P)
- Vacant Position (S) - Vacant Position (S)
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
Agenda
1. Universiteit Maastricht
- Brief introduction of the university
2. The past
- HERUG 2001 development request # 13
3. The present
- Pecaso Cost Planner, add on solution
4. The future
- SAP White Paper Personnel Cost Planning
5. Summary
Planning run
1. 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 ?
E henny.claessens@bu.unimaas.nl
T +31 43 388 2510
F +31 43 388 4890
W www.unimaas.nl