Configure a Matrix Organization Structure to Track Skills and Responsibilities Across Product Lines

  • by A.J. Whalen, SAP Marketing Director, Velocity Technology Solutions
  • November 15, 2004
R/3 Organizational Management allows you to configure and define objects and relationships to create non-hierarchical views of your organization. These views go across departmental and business lines and they provide more efficient reporting, task management, and resource planning. You can use matrix organizations in R/3 to display large, complex organizations or small, project-based groups.
Key Concept
The use of matrix organization structures in businesses of all sizes is not a recent phenomenon. Case studies on the design and use of matrix hierarchies date back to the 1960s and early 1970s when companies such as Xerox, General Electric, and Dow Corning were among the first to tout the benefits of cross-functional, matrix-driven organizational structures. For these large conglomerates, the allocation of key resources and functional roles across multiple business lines allowed greater productivity with fewer resources, which ultimately translated into a more favorable bottom line.

Many businesses have turned to a matrix organization structure to track use of resources across traditional functional, departmental, and product line boundaries. A matrix can also map micro-organizations such as project and team structures within an overall organizational structure. In both cases, a main goal is to save money by avoiding duplication of effort.

With all the possible uses for matrix organizational structures, I’m going to address two questions: What is a matrix organization structure and how can you use R/3’s Organizational Management functionality to depict it? Then I’ll show you how to configure a simple product-based matrix.

A.J. Whalen

A.J. Whalen has successfully combined more than two decades of global business expertise with in-depth experience in the strategic development, management, and delivery of large-scale projects and education for SAP ERP HCM. Prior to his current role as SAP Marketing Director at Velocity Technology Solutions, he served as lead consultant for several global SAP implementations and engagements as well as an SAP Conference Producer for Wellesley Information Services. A.J. has been invited to speak at nine annual SAP educational events and holds an MBA degree from the Stern School of Business at New York University.

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