Organizational restructuring occurs when a company's business model changes due to internal or external factors. Restructuring is necessary and allows a company to adapt, survive, and ultimately grow. These changes are generally initiated by management decisions.
In SAP S/4HANA a company's organization is represented by profit centers. Profit centers can be used to represent products, functions, product groups, or locations.
Besides being a controlling object, a profit center is also an essential object in financial accounting as it is the object used to derive and fulfill the requirements for segment reporting. It was designated for that role because it's an account assignment that was integrated into most operational components of SAP S/4HANA including finance, logistics, sales, and so on.
Sometimes, reorganizing profit centers only leads to changes in the profit center structure and it isn't necessary to define new organizational entities. This type of change is supported in SAP S/4HANA and you can define a new global hierarchy for profit centers. However, the standard process for profit center reorganization is more complicated and involves dividing up, combining, and replacing profit centers. Generally, changing a profit center assignments is not allowed after you have started making postings to the assigned objects. For example, if you create a project master record and WBS element and post an expense for the WBS element, the system will no longer allow you to change the profit center on the project. This is why you need to use the profit center reorganization tool.
Note
Only the cost center master data allows the profit center reassignment and this by creating a new validity period.
The Manage Organizational Changes app is designed to assist you in this process. It allows you to define a date in the future on which the profit center reassignments occur. Objects that are affected by the reorganization are reassigned and their stocks or balances are reposted to the new organizational entities. You can use this app to control the overall change process and to navigate to related apps for organizational changes.
Reporting is also available for analyzing organizational change (simulated or completed). You can use the available reports to analyze the effect of a reorganization and the corresponding reassignment of profit centers.