CO's Resource Planning Brings More Detail to Cost and Consumption Projections

  • by Tony Rogan, Consultant, SAP America
  • January 15, 2003
A new resource-planning functionality in the CO module of R/3 refines traditional cost element planning into additional levels, or makes projections about the consumption of materials. The author, a certified FI/CO consultant, explains how to use it to obtain a greater level of detail than is available through the cost element/general ledger account.

A new resource-planning functionality in the CO module of R/3 has raised questions, such as: How does it work? Should I use it? Available with version 4.6C, resource planning refines traditional cost element planning into additional levels or makes projections about the consumption of materials.

Resource planning is one of several R/3 tools available for planning. Others are cost object/cost element planning and dependent and independent activity-type consumption planning.1

Resource planning differs in that it is a quantity-driven tool used strictly for planning purposes. It obtains a greater level of detail than is available through the cost element/general ledger account. For instance, using this functionality, a company could project business travel expenses to more refined levels or could project savings in material costs by reducing consumption.

Similar to activity-dependent planning, resource planning allows you to plan quantities against a master data element such as a cost center or WBS (work breakdown structure) element. You use a set price to calculate a planned amount. Similar to the activity type, it is not specified when posting actual data.

A note about resource planning in the SAP documentation2 has raised a concern: Will it replace cost object/cost element planning? The answer is that it will not. Rather, resource planning is an additional planning tool that has the potential to benefit planning managers by allowing them to plan quantities of resources consumed rather than detailed costs—for instance, the number of trips rather than planned costs for airfare, rental cars, and taxis.

Tony Rogan

Tony Rogan is a certified FI/CO consultant at SAP with eight years of SAP consulting experience. He began his SAP career with a Big 5 consulting firm and over the years has worked in various industries, including utilities, non-profit, high-tech, consumer goods, and process manufacturing. Tony’s expertise lies in the Financial and Controlling modules, with emphasis on Cost Center Accounting, Profitability Analysis, Internal Orders, Profit Center Accounting, Special Purpose Ledger, Project Systems, and Product Costing. He also has experience working with Enterprise Consolidations, LIS, and Business Information Warehouse.

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