4. CUSTOMIZATION › 4.1 Defining Cost Centers › 4.1.1 Defining the Cost Center Structure
4.1.1 Defining the Cost Center Structure
The cost center structure is defined using the Cost Center
Structure option on the Cost Center Definition Menu
(MWF;4;2;3;1;1).
How the cost center structure is defined is critical because
CA MICS Accounting and Chargeback organizes all of its
accounting information based primarily on the cost center
fields. That is, the cost center fields occupy the highest
position in the sort key of the accounting files.
COST CENTER FIELDS
Cost center fields have data element names of the form
COSTCTRn, where n is an integer between 1 and 9. The number
and length of the cost center fields are defined uniquely by
each installation to meet its needs. To define your cost
center structure, you have to determine how your installation
needs its accounting information organized and translate
those requirements into the cost center structure.
INVESTIGATING YOUR INSTALLATION'S COST CENTER REQUIREMENTS
The tasks required to investigate your installation's cost
center requirements include the following:
o Identify the financial information breakdowns (report
subsets) and the set of sequence variables required to
define those breakdowns. Unless a suitable cross reference
table exists, your reporting sequence variables must be a
part of the cost center structure.
Potential information breakdowns include:
- Organizational structure, such as department, project,
and employee.
- Internal IS management identifiers that may be directly
or indirectly related to charging, such as application
name, test, or production status.
- External classification information, such as general
ledger account codes. Since the data processing
department is often required to provide charges organized
by the corporate chart of accounts as input to the
general ledger system, a substantial amount of
translation effort can be eliminated by including these
codes in the cost center structure.
- Indicators of special billing requirements. Since
CA MICS Accounting and Chargeback allows separate
charging algorithms to be specified at the COSTCTR1
level, some special rate considerations may be addressed
in this way.
o Identify how the codes are specified.
Once you have determined the cost center structure, you
must decide how you want it expressed in the database. You
must settle on the number of cost center levels (CA MICS
supports 1 through 9) and what will be placed in them.
Because the cost center fields are part of the sort key of
the files in which they exist, there will exist at least
one record for each unique combination of values, and
because there are other fields in the keys, there may exist
more than one record for each unique combination of values.
WHERE THE COST CENTER STRUCTURE IS STORED
The cost center structure is stored in the COSTCTR member in
sharedprefix.MICS.PARMS.
USABILITY CONSIDERATIONS
The System Administrator should be aware of usability and
space considerations, as described below.
An elaborate cost center structure tends to be difficult to
develop and maintain. If the cost center structure properly
identifies the different business groups of the firm, any
higher level groupings used for reporting can be derived as
needed. Since a separate cost center level is not required
for each reporting group, we recommend a comprehensive, yet
simple, definition of the structure.
The following diagram illustrates an organization structure
with the cost center levels beginning at the department
level. Each department is unique within the organization.
========================================================
-----------
|President|
-----------
|
------------|-------------
| | |
------ ------ ------
| VP | | VP | | VP |
HIGHER ------ ------ ------
LEVELS | | |
------- ------- -------
| | | | | |
----- ----- ----- ----- ----- -----
|DIV| |DIV| |DIV| |DIV| |DIV| |DIV|
----- ----- ----- ----- ----- -----
|
========================================================
|
---------
| |
------ ------
|DEPT| |DEPT|
------ ------
COST | |
CENTER ------ ------
LEVELS |PROJ| |PROJ|
------ ------
|
---------
| |
------ ------
|USER| |USER|
------ ------
|
----------------
| | |
------ ------ ------
|APPL| |APPL| |APPL|
------ ------ ------
|
---------
| |
------ ------
|PROD| |TEST|
------ ------
|
========================================================
|
EXTERNAL ------ ------ ------
LEVELS | GL | | GL | | GL |
------ ------ ------
The cost center structure allows standard reporting as well
as any additional ad hoc reporting. The relationship between
the entities of a hierarchical structure (for example, a
department within a division) can be easily defined via a set
of user-specified parameters.
This cost center structure also provides for internal IS
information that may not be directly utilized for charging.
In this case, the cost center structure retains the
application identification and whether the mode of operation
was production or testing.
External reporting requirements were also considered,
although they were not explicitly incorporated into the cost
center structure. In this case, an installation-developed
translation table will be used to convert certain cost center
levels into general ledger account codes as required for
input into the corporate accounting system.
SPACE CONSIDERATIONS
You must determine the number of cost centers and their
values. Because cost centers are part of the key of the
files in which they exist, there will exist at least one
record for each unique combination of values. Because the
key contains other fields as well, more than one record may
exist for each cost center value. The greater the number of
unique values, the greater the number of observations each
file will contain and the greater the amount of DASD the file
will require. A large number of unique values will also
limit the amount of summarization that will occur at higher
timespans.
The following sections describe how to complete the cost
center structure:
1 - Cost Center Structure Worksheet
2 - Cost Center Structure Example
