Lecture 04 Financials and Human Capital Management

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Lecture 04Financials and Human Capital
Management

• Dr. Supakorn Kungpisdan
• supakorn_at_mut.ac.th

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Outline

• Financial
• Human Capital Management

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Objectives

• Outline the tasks associated within Financial
  Accounting and Management Accounting
• Explain how SAP within mySAP ERP Financials
  supports key processes in Financial Accounting
  and Management Accounting

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Business Example

• The financial department of IDES is required to
  regularly assess the companys financial status
  from a legal perspective, as well as monitor
  internal costs. As a manager working for IDES,
  you are interested in analyzing costing reports
  for your department

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mySAP ERP Financials

• Financial Accounting
• Financial Supply Chain Management
• Corporate Governance
• Management Accounting

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Financial Accounting

• mySAP ERP Financial provides the ability to
  centrally track financial accounting data within
  an international framework of multiple companies,
  languages, currencies, and charts of accounts
• Example
• When raw materials move from inventory into
  manufacturing, the system reduces quantity values
  in inventory and simultaneously subtracts
  monetary values for inventory accounts in the
  balance sheet
• Financial accounting function complies with
  international standards e.g. GAAP and IAS.
• Also fulfill the local requirements of many
  countries and fully reflects the legal and
  accounting changes resulting from European market
  and currency unification

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Financial Accounting (cont.)
A/P Account Payable A/R Account Receivable AA
Asset Accounting P/L Profit and Loss B/L Bank
Accounting
Take data from Procurement
Take data from Sales Order Management
GAAP General Accepted Accounting Standards IAS
International Accounting Standards
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Financial Accounting (cont.)
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Financial Supply Chain Management
Check customer credit limit online
Check cash flow, cash estimation
Online payment
Virtual bank
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Financial Supply Chain Management (cont.)

• Electronic Bill Presentment and Payment
• Send and receive invoices electronically
• Dispute Management
• Offer system support for processing payment
  deductions
• Lack of quantity
• Lack of quality
• Price variance
• Time variance
• Deduction because of trade promotion
• Misunderstanding between the business partners
• Enable cross-departmental resolution of dispute
  cases including workflow support and escalation
  procedures

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Financial Supply Chain Management (cont.)

• Collections Management
• Evaluate, identify, and prioritize accounts
• Credit Management
• Run cross-company credit limit check and variable
  monitoring of a customer on all distribution
  channels
• Cash Management
• Secure liquidity and optimization of financing
  costs by Transaction Manager
• In-House Cash
• A tool to centrally manage internal and external
  payment flows efficiently
• Treasury and Risk Management

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Electronic Bill Presentment and Payment
Dunning ??????????
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Electronic bill Presentment and Payment Model
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Corporate Governance

• Ensure an organization to comply with an
  increasing number of national and international
  legal requirements for financial reporting and
  corporate governance
• mySAP ERP Financials provides comprehensive
  functions that reduce the overall cost of
  managing internal controls and ensure adherence
  to standards and corporate laws

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Corporate Governance (cont.)
KonTraG Control and Transparency in Business
Act COSO The Committee of Sponsoring
Organizations of the Treadway Commission
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Corporate Governance Functions

• Management of Internal Controls (MIC)
• Certify accuracy of quarterly and annual
  financial statements and disclosures
• Design, establish, and maintain disclosure
  controls and procedures
• Evaluate the effectiveness of disclosure
  controls, and procedures and report on the
  effectiveness of the controls
• Indicate significant changes in internal controls
• Audit Information System (AIS)
• Helps become compliant with corporate governance
  requirements via system and business audits,
  audit trails, results for system inherent and
  security controls, and reports

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Corporate Governance Functions (cont.)

• Whistleblower Complaints
• Sending anonymous complaints
• Analyzing anonymous complaints
• Basel II
• A new capital requirement regulations for
  financial institutes issued by The Basel
  Committee on Banking Supervision

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Management Accounting

• mySAP ERP enables the valuztion and recording of
  financial data, not only for financial reporting,
  but also as the basis for all cost- and
  revenue-related reporting
• As financial data is tightly integrated with the
  business processes of mySAP ERP logistics
  applications, users can also easily obtain
  detailed information about cost structures and
  profit margins
• Helps support and enable management to achieve
  business goals e.g. Increasing revenue,
  maximizing customer profitability, reducing
  operating costs while increasing efficiency,
  reducing the cost of goods sold, and improving
  the visibility of inventory

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Areas in Management Accounting
???????????????????? External and internal views
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Control of cost of production
Identify types of costs and revenues
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Integration
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Extended Analysis of Results
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Outline

• Financial
• Human Capital Management

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Objectives

• Outline the tasks associated within Human Capital
  Management
• Explain how SAP within mySAP ERP Human Capital
  Management supports key processes in HCM

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Business Example

• The human resource department of IDES is
  responsible for the recruitment and maintaining
  of new hires

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mySAP ERP HCM
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Recruitment
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mySAP ERP HCM elements

• Organizational Management Objects
• Applicant Data
• Personnel Management
• Personnel Development
• Training and Event Management
• Time Management
• Appraisals
• Payroll
• Personnel Cost Planning
• Employee Self-Service and Manager Self-Service

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The Organizational Plan

• Use Organizational Management to quickly and
  effectively map your organizational and reporting
  structure with the relevant organizational objects

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Organizational Plan (cont.)
Organizational units
Jobs
Positions, Persons
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Key terms in Organizational Management

• Organizational units
• business units in the organization
• Jobs
• General job descriptions or templates that apply
  to several positions with comparable
  requirements, tasks, and characteristics
• Positions
• Smallest organizational units of the
  organizational structure
• Inherit the tasks and requirements of the job
  which it was defined
• Persons
• Occupy positions within the organizational
  structure
• Represent employees in the organization
• Personnel Management maintains the employee data

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Recruitment
via Recruitment
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Recruitment (cont.)

• mySAP ERP HCM supports in representing staff
  requirements, advertising, managing and selecting
  applicants, and applicant correspondence
• When hiring an applicant, you can transfer the
  applicant data entered in Recruitment as employee
  data to Personnel Administration
• External applicants and internal employees can
  use the Employment Opportunities self-service
  application to apply online
• Check status of their application using the
  Application Status service

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Personnel Management

• Integration between Recruitment and Personnel
  Administration enables the applicant data to be
  transferred as employee data
• Employee data is stored in mySAP ERP HCM as
  infotype records

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Infotype Records
StaffID
Wage
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Organizational Assignment

• One infotype is of central importance for
  employee data Organizational Assignment
• The employee is assigned to three important
  structures
• Enterprise structure
• Personnel structure
• Organizational plan

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Human Capital Management Structure
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Hiring

• When hiring an employee, you have to enter all
  kinds of data in the system including master data
  and data that is relevant for time management and
  payroll
• This can be carried out by Hiring action
• In going through the Hiring action, you create a
  new personnel file consisting of various infotype
  records including
• Organizational Assignment
• Personal Data
• Planned Working Time
• Basic Pay
• Band Details

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Personnel Actions
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Personnel Development
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Training and Event Management

• Support planning, executing, and managing
  training courses and business events

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Processes in Training and Event Management

• 1. Preparation of business event
• Business event environment
• Create business event groups
• Create business event type

• 2. Business event catalog
• Create business event data with and without
  resources
• Plan business event date based on requirements

• 3. Day-to-day activities
• Book
• Prebook
• Replace
• Rebook
• Cancel
• Business event
• Correspondence

• 3. Recurring tasks
• Firmly book/cancel
• Lock/unlock
• Follow up
• Business events
• Carry out appraisals
• Repost costs, allocate activities and issue
  invoices

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Training and Event Management
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Time Management

• Time Management component supports all processes
  concerning planning, recording, and valuating
  employees attendance and absence times
• Integrating Time Management to Training and Event
  Management causes a time data record to be
  created as an attendance

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Time Management (cont.)
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Appraisals

• Appraisal functionality in Personnel Development
  supports flexible appraisal processes used to
  carry out standardized appraisals with high level
  of objectivity

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360 Degree Appraisal

• 360 degree feedback is a method and a tool that
  provides each employee the opportunity to receive
  performance feedback from his or her supervisor
  and four to eight peers, reporting staff members,
  coworkers and customers.
• Most 360 degree feedback tools are also responded
  to by each individual in a self assessment.
• 360 degree feedback allows each individual to
  understand how his effectiveness as an employee,
  coworker, or staff member is viewed by others.
  The most effective 360 degree feedback processes
  provide feedback that is based on behaviors that
  other employees can see.

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Personnel Appraisal

• Performance appraisals are key for evaluating the
  work of employees, for developing and motivating
  employees as well as to identify and reward
  high-quality performers.
• The process begins when the manager receives an
  appraisal request for employees in his or her
  area of responsibility. The request specifies
  which employees should be appraised and which
  appraisal method should be used.
• In preparation, the manager collects information
  on the employee's profile and previous
  appraisals. The employee's profile contains
  information such as the employee's
  qualifications, knowledge and potential.

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Personnel Appraisal (cont.)

• The manager conducts an appraisal meeting with
  the employee and enters the personnel appraisal
  in the system.
• If required, a proposal for compensation planning
  will be created from the result of the personnel
  appraisal.
• The employee is informed that the personnel
  appraisal has been recorded in the system and the
  result is available.
• The employee reviews the result in the system and
  specifies whether or not he or she accepts it. If
  the employee does not accept the result, the
  manager may revise the personnel appraisal. After
  the employee has acknowledged the result, the
  procedure is complete.

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Payroll
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Personnel Cost Planning

• Personnel Cost Planning supports business
  processes that reach beyond the boundaries of
  departments and applications
• Information about payment can be derived from
  various sources to create personnel cost plans
• Once a plan has been released, the data can be
  used for processes such as
• Creating a training budget for Training and Event
  Management
• Transferring data to Controlling
• Extracting the cost projections for further
  analysis in the SAP Business Information Warehouse

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Personnel Cost Planning (cont.)
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Employee Self-Service

• Using Employee Self-Service (ESS), employees
  maintain their own personal information and
  control many administrative transactions
• Streamline approval process and task like
  checking vacation time or choosing benefits

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Manager Self-Service
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Question?