Hi PPM practitioners—welcome back! In my first blog in this series, I covered the basics of CA PPM Financial Planning by defining core capabilities. In this post (and next one), I will address essential elements of setting up CA PPM Financial Planning.
We will start with the Financial Framework. To support your financial planning model, you should first define the internal structure for tracking financial information, consisting of an entity and its associated locations and departments.
An entity represents the highest level of the financial tracking structure and is typically the overall organization’s name. You can define multiple entities if your organization has subsidiaries that keep separate general ledgers. Using multiple entities is also an option for companies supporting financial planning in multiple currencies, but use caution, because information cannot be shared across entities and adds additional administration complexity. For most PPM implementations, a single entity representing the overall company is all you need.
Locations typically represent the geographical locations where you conduct business and must be associated to a single entity. When multiple entities are created and a location supports both entities, set up two locations. It’s also possible to set up parent/child locations. Locations that you create are automatically added to the location organizational breakdown structure (OBS). Unless you use PPM Chargebacks for inter-departmental transfers and/or establish a rate matrix model for resources with rates that vary by location/region, you can generally establish a single default location.
Departments represent the company’s organizational units (cost centers) that perform work on investments and/or receive the services. Departments must be associated to a single entity and may be associated to one or more locations. It’s also possible to set up parent/child departments. This is an area that should be thought through carefully with the financial team and kept as simple as possible. As noted with locations, you may be able to get by with a basic structure that represents the organization at a high level and add more detailed org unit breakouts as the need arises. Start with the minimum departments needed to support financial cost center tracking for investments. Be careful not to mix up the need for modeling the cost center structure with the resource pool structure for staffing resources. If they are the same, you can often use the department OBS for both. If not (financial tracking trumps), consider creating a separate resource pool OBS to support staffing.
A few prerequisites need to be created before building the financial framework.
- Currency: CA PPM supports single or multiple currencies. If multiple currencies are used, this decision is typically made and defined during CA PPM installation. One currency may be defined as the system currency (home currency) and must be defined before setup of the financial framework. If multiple currencies are used, foreign exchange rates need to be defined from/to each currency supported before processing financial transactions.
- Location OBS: A location OBS placeholder needs to be defined before creating the entity. Location OBS units are automatically created as locations are defined.
- Department OBS: A department OBS placeholder needs to be defined before creating the entity. Department OBS units are automatically created as departments are defined.
Fiscal time periods (not to be confused with time sheet periods) are created to support use of detailed financial plans or chargeback rules and are defined at the entity level. For example, if your investment cost needs to be planned by month, configure monthly periods (beginning with the earliest planning month) through the longest planning period to be supported on investments. Fiscal periods may be created for the following types: 13 periods, weekly, monthly, semi-monthly, quarterly, and annually. Add additional fiscal periods as needed as part of annual maintenance. Once a fiscal period has been used on an investment plan, you cannot modify the period’s dates or deactivate it.
Note: Beginning with CA PPM 15.2, fiscal periods are required to support the telescoping feature in the new Resource Management user experience.
In my next blog, I’ll cover the key financial classifications needed to support financial planning setup.
Readers interested in more detail around CA PPM Financial Planning can check out DocOps. I encourage you to participate in the best-in-class CA Communities site, where you have access to your peers, events and support. You can also reach out to CA Services for information about CA PPM and individualized business outcome references and analysis. Feel free to post in the comments section of this blog or contact me directly via email and Twitter @kdobsonppm.