Change Discussion Guide

Transcription

1 Example: Budget Coordinator <Insert project name> <Insert date here>

2 About This Guide What is a Change Discussion Guide? The Change Discussion Guide describes process changes that affect the way you will perform your job after we start using ERP. How should I use this guide? Use this guide to understand the process changes that affect your job. This guide is not training. Training will teach you how to use the ERP system to do your job. But, before training, you should understand how your role and tasks will change. After you read through this guide, you will sit down with your supervisor and walk through it together. Your supervisor will help you understand which parts of the process change affect you and any differences your team or your location will experience. What if I have questions? As you review this guide, your supervisor will answer any questions you have. If your supervisor doesn t know the answer to a question, he or she will raise it to the project team or your primary budget coordinator and get you an answer. If you have questions later, ask your supervisor or an ERP implementation contact. Who are my ERP Implementation contacts? The following individuals have been designated to ensure that finance and budgeting activities are performed successfully for all three of the approaches described above. Please contact the budgeting designate for your team with any questions or concerns. You can also contact your supervisor or your team s ERP Change Agent. Team Contact Phone Finance Location A XX XXX-XXX-XXXX Finance Location B XX XXX-XXX-XXXX Finance Location C XX XXX-XXX-XXXX 2

3 Budget Coordinator Changes What does a Budget Coordinator do? Budget Coordinators play an important role by developing and monitoring budget data for their department. The Budget Coordinator's ability to create and maintain budgets, monitor variances, explain budget data variances successfully, ensures the department hits its financial goals. How do we budget today? There are four components to budget for the Annual Performance Plan (APP) process. Direct Department Expenses (DDE) are budgeted at the cost element level. Charge-ins (CIs) and charge-outs (COs) are budgeted by dollar amount. The level at which charge-ins and chargeouts are budgeted varies from a cost center within a department to the cost center for the entire business unit. These three components are reported today in the 321 system. The fourth component, major cash, is budgeted outside any common system and is done by department or by cost center within a department. How will we budget using the ERP system? The ERP system has the ability to both budget and plan. ERP budgeting is a top-down approach, whereas ERP system planning forecasts at lower levels and rolls up the numbers to summary levels. Corporate and Shared Services will be using ERP planning, which is similar to what we do today. Planning in the ERP system will provide a common tool for all Corporate and Shared Services groups to use. It will also provide a more streamlined process and reduce costs through less maintenance of individual departmental systems. A budgeting common design will be implemented for use across all units. This design will mean doing all planning in the ERP system. However, we will not use the common design until 20XX - when all XXX business units have been converted to the ERP system. So there is a simplified approach to planning for the interim, during 20XX. Process flows of the approaches for both 20XX and 20XX planning are described in more detail in this guide. 3

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5 Budgeting: Common Design in the ERP System What is the common design? The common design can be summarized by a common theme: DDE, CIs and COs will be planned at the same level of detail as actual. This is both in terms of the level of detail of the charge itself and the organizational level to which it is charged. This means that each cost recovery mechanism is planned by component (rate and usage versus dollars). Both the provider and customer plan at the same level of detail. DDE is currently budgeted by cost element level, which correlates with actual today in the 321 system, and tomorrow in the ERP system Also, common design allows the Shared Service provider to ensure that COs equal CIs. Major Cash will be planned in the ERP at the department level with the having entity discretion to input into several cost centers just one. What are the benefits of the common design? Supports stronger analysis - Customers can determine the cause of the variances and take corrective action. Establishes accountability - Plan and actual data are aligned at the same level, eliminating any offsetting variances between cost centers. Eliminates the need for customer allocation - Determination of data at partnering time between provider and customer should be more accurate than a customer allocation. More work initially, but less throughout the year - By loading more plan detail into the ERP system, customers will have tools and data to research independently as questions come up throughout the year. 5

6 Changes Impacts If you are the Budget Coordinator, you will: Stop using all systems and proprietary tools currently used for budgeting - all planned activities, beginning for 20XX budgets, will be done in the ERP system. Continue planning DDE at the cost element level (but you will do this in the ERP system). Start planning charge-ins (CIs) and chargeouts (COs) at the activity level, to the same organizational level as actuals. If you are the Shared Service provider, you will: Start planning activity quantity and rates by sending cost center. (These are the chargeout components.) Start verifying that charge-ins = charge-outs. You will no longer use the 321 system to perform budgeting tasks. Cost recovery activities will be planned at the same level as actuals. This is both in terms of the level of detail of the charge itself and the organizational level to which it is charged. This means that cost recovery activities are planned by component (rate and usage vs. dollars). Depending upon how many cost recovery activities a department provides or receives, there could be a significant increase in the plan data input into the ERP system. If you are the customer, you will: Start planning charge-ins at the same organizational level as your Shared Service providers. Start planning activity consumption (quantity) by provider cost center to your receiver cost center(s). (These are the charge-in components.) Start planning Major Cash in the ERP system. Stop submitting separate templates for Corporate rollup, as it will be done in the ERP system. See Plan Versions for more information related to the common design in the ERP system. 6

7 Budgeting: Interim Approach Why is an interim approach needed for 20XX budgeting? The budgeting common design will be used by all business units. However, not all groups will be converted to ERP until 20XX. An interim approach to the common design to be used for the 20XX APP cycle. It was developed because, during the transition, Finance won t be able to forecast charges at low levels of detail with no historical trends. Also, the Shared Services groups are at various stages of developing their rate structure; the common design has a prerequisite that a rate structure is in place. 7

8 Changes Impacts If you are a Budget Coordinator, you will: Stop using the 321 system for budgeting. Continue planning DDE at the cost element level. Continue planning charge-ins (CIs) and charge-outs (COs) at the dollar level BUT, you will... Start using the rate and quantity functionality of the ERP system. If you are the Shared Service provider, you will: Start planning activity quantity and rates by sending cost center. (These are the chargeout components.) Start verifying that charge-ins = charge-outs. If you are the customer, you will: Start planning charge-ins at the same organizational level as your Shared Service providers. Start planning activity consumption (quantity) by provider cost center to your receiver cost center(s). (These are the charge-in components.) Start budgeting Major Cash in the ERP system. Continue to load template for PP&A s Corporate rollup. You will no longer use the 321 system to perform budgeting tasks. Rates for planning activities need to be "$1." For example, if $1,000 must be charged-out, you would charge out 1,000 units at $1 per unit (dollar = quantity). The number of plan charge-in lines will increase if your Shared Service provider plans charge-outs from multiple cost centers. Cost recovery activities are planned by component (usage and rates) instead of dollars. Providers will enter a total charge-out quantity for an activity and customers will enter their consumption of that activity. For more information, see Uploading 2007 Budget Data and Plan Versions. 8

9 Uploading 20XX Plan Data How will 20XX plan data be uploaded in the Interim Approach? For the 20XX Interim Approach, the plan data will be uploaded into the ERP system following implementation using a common Excel spreadsheet template and ACCESS database tools. Individuals have been selected from each entity to coordinate this activity for Corporate and Shared Services. Training will be provided on this process and the related tools separately from ERP training. How will the process work? To perform the upload of 20XX plan data, users will enter the DDE, charge-ins and charge-outs as defined in the 20XX Budgeting - Interim Approach section of this Guide. Data will be loaded into a common Excel spreadsheet template. The primary Budget Coordinator from each entity (see Corporate and Shared Services Budgeting Contacts) will collect the spreadsheets from your team and upload them into an ACCESS database application. After the data are uploaded into ACCESS, some data (such as cost centers and activity codes) will be validated. A test upload with the primary Budget Coordinators from each entity is tentatively planned for late 20XX. This test will verify that data are accepted into the ERP system and provide a report that will help Shared Services providers verify that charge-ins = charge-outs. This reconciliation is critical to an accurate budget. 9

10 Changes Impacts If you are a Budget Coordinator, you will: Continue current procedures for developing detailed plan data. Stop using other proprietary tools you currently use to assemble your plan data. Start using the common Excel spreadsheet template and ACCESS tools. The use of the common Excel spreadsheet template and the ACCESS tools is a new task for the Budget Coordinator. These tools were developed to load data only for the 20XX APP. You will be trained on using these tools correctly. Some basic verification reports are produced in ACCESS. Consolidation of a department's plan in ACCESS is a prerequisite to obtaining the reports. 10

11 Plan Versions What is a plan version? The ERP system has the ability to keep multiple versions of a department's budget - these are called "plan versions. The following describes the plan versions for expenses to be used effective with the 2007 APP: Plan Version 0 This is the official version of a department's budget, which remains unlocked throughout the year so changes to rates can be made as necessary. Budget Coordinators will initially upload their plan data to this plan version. Plan Version 2 This version is a copy of Plan Version 0 (the official departmental budget) that remains locked (no changes). Each entity needs to notify PP&A that their final budget (plan Version 0) has been verified. Once PP&A has been notified, ABS will copy Plan Version 0 to Plan Version 2 and lock it. How will changes to either plan versions be handled? As stated above, Plan Version 0 will remain unlocked so rate changes can be made as necessary, as actual and plan rates are one in the same. Changes to Plan Version 2 must be coordinated through PP&A and will only be made in situations when there is a significant change. An entity can also notify ABS if they require another working version of their current budget for internal departmental use. This may be needed as the result of a department's reorganization. Changes to this internal version will not impact the official locked plan (Plan Version 2). 11

12 Changes Impacts If you are a Budget Coordinator, you will: Continue communication with PP&A and Shared Services Integration that your current budget is complete Start having a locked version, and an unlocked version of your current budget Start using plan versions for internal departments changes when deemed appropriate Today, there is only one version of a department's budget, and that version cannot be technically locked. Those who request online reports will select the plan version they want. 12

13 Terms What is the difference between budgeting and planning? ERP budgeting provides summary forecasts such as one bottom line value for an entire cost center. ERP planning provides values at the detail level, which are summarized to higher levels. For example: providing values for DDE, charge-in and charge-out detail at the cost center level and summarizing those components at the department level. Currently, we are only using ERP cost center planning to develop the APP. What is a Primary Budget Coordinator? The Primary Budget Coordinator is the person who acts as the primary contact within an entity for ERP system planning issues and questions. A list of these contacts is provided in this guide. What is the PP&A? The Performance Plans & Analysis group. What is the SSI? The Shared Service Integration group. What is an Internal Order? Internal orders are usually used as an interim collector of costs and as an aid in the planning, monitoring, and reporting processes. The costs are settled periodically to their final destination (cost center, fixed asset, business segment, etc.). For our purposes, internal orders generally have the following characteristics: They can be used by an organizational unit that collects costs and revenues for a fixed time frame. They are relatively simple in structure and would not involve a high degree of risk. They have a precise, agreed-upon goal and a limited life. They are usually used with single activities that do not involve complex activities (e.g., a technical seminar that all business units attend). 13

14 What is a cost recovery mechanism? A cost recovery mechanism is a method by which a Shared Service provider recovers its costs. Methods available in the ERP system include activities and assessments. Internal Orders can also be used to gather costs for charging purposes. 14