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cleanFiles/bookmap_SAP_Commodity_Management_Solution_for_Oil__en-US_learning-sap-com_lsc-prod.zip (MMCP-DROPZONE) - 2025-03-17T13:06:31.000Z

Using Free Characteristics and Relevance to Book Structures

<div id="content"><div class="parentsection"><div class="section"><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_gg16cix2"></div></div></div></div><div class="parentsection"><div class="section"><div tabindex="0"><h3>Lesson Summary</h3></div><div class="formalblock"><p tabindex="0">In this video you've learned:</p></div><ul style="list-style-type:disc"><li tabindex="0"><strong>Book Structure in Risk Management:</strong> Each trading unit is referred to as a book, crucial for risk reporting and hedging strategies.</li><li tabindex="0"><strong>Free Characteristics in SAP:</strong> SAP provides free characteristics to create book structures, integrating them into logistics and financial documents.</li><li tabindex="0"><strong>Customization and Flexibility:</strong> Book structures can be customized based on organizational needs, with no limit to defining trading units.</li><li tabindex="0"><strong>Integration Across Documents:</strong> Free characteristics integrate with purchase orders, sales orders, contracts, and follow-on documents for comprehensive risk analytics.</li><li tabindex="0"><strong>Configuration in Financial Trades:</strong> Free characteristics can be configured in financial trades, enhancing market risk analysis and reporting.</li></ul></div></div></div>

Usage of Free Characteristics and Relevance to Book Structures

SAP Commodity Management Solution for Oil & Gas and Metals & Mining

SAPIndustry_Day_4_Part_2_.mp4

Our next topic is basically concept of book structures, right? Every risk manager or risk admin team or the business unit who takes care of the risk management for a particular organization. They have certain attributes. They need to capture exposure based on their business units or to be specific yet trading units. right it could be as simple as multiple company codes or you know a multiple profit centers managed as you know your business units and all those elements which you have seen in your standard as dmm or even if iCO those are still valid but that's not the same is uh that those are the not same terminologies which are quite often used on the risk management side Right. So that's where what we have seen and what everyone from the industry speaks about is a certain book structure. Right. So every trading unit is referenced as a book. And this goes, and it could be direct in relationship with, you know, one-to-one relationship with a profit center or it could have multiple profit centers and so on and so forth. And this is a very critical attribute of risk reporting because it's not like a standard report where, oh, I would see, you know, balances based off of my particular jail account or a company code and then do my analysis. But when it comes to risk management, each of these attributes play a very important role. and since each of these trading units are hedged differently. So a gasoline book might be hedged differently. It might have different hedge policies, you know, if a particular organization is doing hedge accounting. So each book might have a different strategy for hedging. So there could be one book could be following a cash flow hedging or, you know, and another book could be doing a fair way. But this all depends on what even accounting standards. you follow. So all these are very critical when it comes to risk reporting, basically. And that's where to manage such kind of a book structure, SAP provides a functionality called free characteristics. So these three characteristics are a way to create your book structure. These are integrated into your risk reporting as well. And this gets integrated to your physical side of the documents and financial side of the documents as well. So the agenda for this particular slide is to see, you know, how free characteristics are used in the logistics documents, how free characteristics are used in financial documents as well. So as I was saying, you know, you have different attributes in your, for your, in your organizing For example, I mean, I gave an example of, you know, your certain trading books or, you know, your business units or to one more example is in this screen here, which is a portfolio. So portfolio could also be, you know, different portfolio or strategies. Like strategies are the most common book structure attribute what we have seen, what we see in each organization, right? and strategy, again, could be a part of a trading unit or could be a directly one -to-one relationship with your profit centers for your financial accounting when it comes to a financial accounting, right? But when it comes to risk reporting, every report or every risk manager would not ask, hey, give me the exposure for this profit center. Rather, the expectation is, you know, positions and expose. for a particular strategy, you know, and you will, then your reporting needs to follow that. For free characteristics, basically, SAP uses the standard class management for creating free characteristics. So we have a standard class delivered and a class type for free characteristics, which integrates into logistics sites. So this slide here speaks how you are integrating for example, in this case, portfolio and strategy into a physical contract. So you see this screen here is basically probably a purchase order, purchase order, and you see this free characteristic is already available and integrated here. And we will talk through some configuration. We do have a topic slide for that as well. But this is how it integrates. and then this is, once you assign this into your trade, physical purchase order in this case, this information is automatically captured in your description. So as I was saying, the book structure is basically can be any categorization, right? It need not be the same for each organization. In fact, it's never the same. So for one organization, it could be just organizational structure, you know, process or any other market overview or market trading units or, you know, even it could be on a very high -level trading units like marketing or, you know, OTC, so it could be anything. Or it could drill down to more complex or more deeper, like, you know, compliance, market, strategy, HVC and so on and so forth. and then goes into more detail if you have a region-specific trading units or, you know, commodity-specific trading units. So there is no limit to the way you can define your book structure. It purely depends on what your customer requires you to manage or what your customer's risk reporting requirements are. So whenever we talk about risk reporting, this is the first. question, you know, we need to understand how is the book structure defined for the risk reporting thing? So as I was saying, so every free characteristic is assigned in the logistic document, you know, they can be predefined as well. You can create your own characteristics. these are just the two views in a particular document, simple view and detail viewing. And this is where you would, so you would have to select these attributes manually on the trade. You know, this is all integrated also if, you know, if a customer is using SAP's deal capture solution, since commodity management as a whole is integrated with deal capture. So everything is integrated. and then flows back to the risk analytics um so right now you know the standard offers risk managed free character integration with purchase orders sales orders and contracts so this is then you know this also flows through the fall on documents and like here go to see deliveries and and that's you know and we provide integration on DSW side as well that I think that probably is not a standard at this moment but you know with some modification you could integrate that as well but since strategies and everything are required on each of the fall on documents. So this is the current standard functionalities in when it comes to the pre-charity six right now. These are the document types, which can be available for usage of pre-character-6. And then, so this is a standard purchase order, right? So there is nothing new here, you select the item, and then there is a small option once you activate pre-character-6, this button will be activated and then you know from here you would basically see all when you navigate through all these screens you would see an option for pre-character-six and basically those free characteristics will be then be available for you to enter so I mean you guys are pretty much aware of all the purchase order so these are just the screens navigation to the pre-character-6 and you know you can enter so you can have as many free characteristics as you want as such there is no restriction to how many you can really add but yeah so the next few slides talks about the same integration on the financial documents or any kind of derivatives right so we do have a concept of market risk analyzer into financial trades and we will talk through this when we go through financial trades as well so within this within that architecture the three characteristics can be configured like the same thing right you see the portfolio and the strategy or you can have anything here literally And then that gets assigned into your financial trades as well. Again, when you create the trades, the users must be selecting those attributes. So you can even link this to a Z table or, you know, basically the configuration of analysis parameter within treasury and risk management is quite flexible in that sense as well. right so this was just an overview