Creating Organizational Structure in SAP-HCM

An Organizational Hierarchy is an essential framework which companies rely on to run their business. It may include various Organization Units, such as Procurement or Sales, Finance or HR, as well as the responsibilities that lie with the different units and the people of an organization. The functional classification of roles is defined by Human Resources (HR) and depicted in a Human Resources Information System (HRIS), such as SAP HCM, to manage each of the functions efficiently.

  1. Organizational Management

Within SAP, an Organizational Structure is created in one of the HCM components called Organizational Management. This is done in a very effective way which allows SAP Customers to control various functions, including System Authorizations, Process Workflows, and Self-Services scenarios, smoothly.

  1. Essential Elements of an Organizational Structure

An Organizational Structure is made up of Objects and their Relationships. These objects include Organizational Units, Positions, and Persons to name a few. Each Organizational Unit, for example a Division or Department, has Positions which are occupied by Individuals to carry out Jobs.

  1. The Objects in an Organizational Structure

The Objects used within an Organizational Structure are assigned to different Types and have unique IDs which differentiate them from each other. Hence, knowing the Object Type, Object, and Object Key is required to set-up the structure correctly.

  1. Interfaces to Create and Maintain the Organizational Structure

There are different interfaces, including Simple Maintenance and Organization and Staffing, through which the structure is created or maintained. The Expert Mode is used to edit the objects and their characteristics. The attributes of an Object are stored in different information structures called InfoTypes.

  1. Organizational Units and Positions in a Hierarchy

The Object and Relationships, which are two different InfoTypes, are created as soon as the structure is defined. Each of the objects, including Organizational Unit and Position, often require additional details, such as Levels, to determine the reporting line(s). 

  1. Controlling the Maintenance of Organizational Structures

After the implementation of the Organizational Structure, its maintenance usually requires different steps and roles. To facilitate and control the maintenance process, SAP provides a mechanism to manage the objects through statuses, from Planned to Active.

  1. Integration with HCM and other SAP Components

Closely integrated with other HCM components, Organizational Management also supports the Recruitment and HR Operation processes when it comes to creating or filling vacancies. Positions created in an Organizational Structure are first defined as Vacancies and later assigned to a Person or a System User.

  1. Simulating Changes in an Organizational Structure

In addition to its creation and maintenance, the Organizational Hierarchy can also be copied to simulate proposed or planned changes before implementing them. This is done by defining and using a Plan Version.

Summary

In a nutshell, the Organizational Management component of SAP HCM Solutions provides tools that enable companies to create and use Organizational Structure in a way which serves a number of essential business needs.

The e-book Creating Organizational Structure in SAP HCM describes the above topics in detail, including step-by-step instructions and screenshots, to help you create your own hierarchy in the SAP system.

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