Questions related to Division in SD part of Enterprise structure

[Former Member]

Dear Expert Friends,

I know "Division represents a product line or grouping of material services". But That is the definition. To be a good SAP SD consultant I am curious to understand answers to below questions :

> Strategy : What should be suggested to the clients? Fewer or greater divisions? why?

> Master data : How will divisions affect the master data? why?

> Transactions : How will divisions affect the Transactions? why?

> How can division creation help in achieving maximum impact on business transactions and subsequent reporting?

I done some research and have found no answers or relevant data for above questions.

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Thank you for your time.

[Lakshmipathi · Accepted solution]

Strategy
Less Divisions are recommended why because, your master data would accordingly be minimized

Master Data
Division will not affect but if you have more Divisions, again all those Divisions will have to be extended to the required sales areas

Transactions
Affecting or not affecting would be controlled, as you would be aware,  through your sales document type.  If you set the document type to control, then obviously, you will have invoice split which again, many clients would not accept to this.

To explain little bit in detail, let us assume Colgate-Palmolive as a Sales Organisation where they would be manufacturing different varieties like soaps, tooth pastes etc.  Here you need to go for different Division for Soaps and Tooth pastes as logically, that is correct. 

At the same time, having different Divisions will help you to have MIS reports but it is upto the client to indicate as to how they want their financial reporting should be.  Needless to mention, based on Material Group or Material Pricing group also, you can generate reports.  So before going for different Divisions, we need to decide how far, that would be useful from Management perspective.

Most importantly, as explained in SAP help,

use of divisions lets you organize your sales structure around groups of similar products or product lines. This allows the people in a division who process orders and service customers to specialize within a manageable area of expertise.

So to restrict users to create sale order for certain Division also, you can make use of that.

G. Lakshmipathi

[Former Member · Accepted solution]

Dear G. Lakshmipathi,

Thank you for the reply. Please find below responses :

Strategy
Of what I know, master data can be shared between the divisions. If such is the case, we can have multiple divisions with shared master data. Which will still result into minimized master data. I understand shared master data totally depends on the business and processes one is dealing with. My question here, is it only the master data size due to which fewer number of divisions are recommended? or are they any other factors?

Master Data
I think you answered the affect of having greater/fewer divisions to master data under strategy. Or maybe the same answer is relevant here as well.

Transactions

Yes I agree. effects can be controlled through sales document types. I will research further on this. Thank you for the lead.

Again thank you for throwing some light on Division purpose, reporting methods and example. Restricting users from creating SO for a particular is good information.

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Thank you for your time.

[Lakshmipathi · Accepted solution]

SCN has provided "Helpful Answer" and "Correct Answer" to award to members who help you in solving the issue.  Please dont select this for your own comments.

G. Lakshmipathi

[Former Member · Accepted solution]

Thanks for the information Lakshmipathi. I am new here, Thank you for the direction.

[balajirkrishnan · Accepted solution]

Thank you so much for detailed and wonderful explanation on sales organization and division.