Organizational Management in SAP S/4HANA HCM

Organizational Management in SAP S/4HANA

What is Organizational Management?

At its core, Organizational Management is the central module in SAP S/4HANA used to map your entire enterprise structure. It’s not just about creating an org chart; it’s about building a dynamic, time-dependent model of your business that can be used for:

Analysis and Reporting: Gaining insights into your current organizational plan.Workforce Planning: Simulating future structures and planning for reorganizations or expansions.Process Automation: Driving workflows by ensuring tasks are routed to the right people in the right roles.Integration: Serving as the foundational “blueprint” for a vast range of other SAP modules, including Human Experience Management (HXM), Financials (Controlling), Logistics, and more.

Think of OM as the digital skeleton of your company. Every department, team, role, and employee position is a bone, and the relationships between them allow the skeleton to function. A well-defined OM structure is the prerequisite for countless business processes.

From the Past to the Future: What’s New in S/4HANA?

While the core concepts of OM remain timeless, the way we interact with them has evolved. This guide bridges the gap between the classic SAP ERP approach and the modern S/4HANA experience:

User Experience: We’ll focus on intuitive SAP Fiori apps, which provide a modern, web-based interface for managing your org structure, replacing older transactions like “Organization and Staffing” (PPOME).Real-Time Analytics: Leveraging the power of the HANA database, reporting on your org structure is faster and more powerful than ever.Simplified Integration: S/4HANA provides a more streamlined integration between OM, HXM (the successor to HCM), and Finance.

Let’s begin by exploring the fundamental concepts that make up your organizational blueprint.

Chapter 1: The Core Concepts of OM

To master Organizational Management, you first need to understand its unique, object-oriented design. Instead of static tables, OM uses a flexible network of individual objects and the relationships between them.

The Object-Oriented Approach 🧱

Every element in your organization is treated as a separate, self-contained

object with its own individual characteristics and data. These objects are then connected to each other through

relationships to form a dynamic network that mirrors your business reality.

Objects: These are the building blocks. Think of them as the nouns of your organization (e.g., a department, a job title, a specific person).Relationships: These are the connections, or the verbs, that link objects together (e.g., a department incorporates a position, a position is held by a person).Characteristics: These are the attributes or adjectives that describe an object, stored in data records called infotypes (e.g., the name of an org unit, the working hours for a position).

This model provides incredible flexibility to map complex structures, plan changes, and run detailed reports.

The Building Blocks: Core Object Types

While you can create custom object types, five basic types form the foundation of nearly every organizational plan. Each has a unique one-letter key.

🏢Organizational Unit (Key: O)

An Organizational Unit describes the different business units in your company. These are typically structured hierarchically to form your departmental structure, like a family tree for your company.

Examples: Executive Board, Human Resources Department, Sales Team, Project Group.Key Function: They group together positions and can be linked to financial entities like Cost Centers.🗂️ Job (Key: C)

A Job is a

general classification or template for responsibilities and tasks, not a specific role. Jobs are used to standardize roles across the company.

Examples: Manager, Consultant, Secretary, Engineer.Key Function: They serve as templates for positions. A position inherits tasks, qualifications, and planned compensation from its describing Job, which significantly reduces data entry.👤Position (Key: S)

A Position is a

specific, individual instance of a Job within a particular Organizational Unit. Positions are the concrete “slots” that can be held by people.

Examples: “Manager of Sales, North America” (based on the “Manager” Job), “Secretary for Production Department” (based on the “Secretary” Job).Key Function: Positions are the critical link between the organizational structure (OM) and the people (HXM). An employee is hired into a Position, not a Job. A position can be 100% filled, partially filled, or vacant.💰Cost Center (Key: K)

A Cost Center is an object that represents a location where costs are incurred. It’s a fundamental object from the

Controlling (CO) module.

Examples: CC-SALES-NA (North American Sales), CC-HR-ADMIN.Key Function: By linking Cost Centers to Organizational Units or Positions, you ensure that all personnel costs associated with those units are correctly allocated in your financial system. This is a primary point of integration between OM and Finance.🧑‍💼 Person (Key: P)

A Person represents an individual employee in your company who holds a position.

Examples: John Smith, Maria Garcia.Key Function: While the Person object exists in OM, most of its detailed data (like address, salary, bank details) is maintained in the Human Experience Management (HXM) module. The link is made when a Person is assigned as the

holder of a Position.

Connecting the Dots: Key Relationships

Relationships are stored in a specific infotype (1001) and are reciprocal; defining one direction automatically creates the inverse. For example, if you state

Position A reports to Position B, the system automatically knows Position B is the line manager of Position A.

Here are some of the most critical relationships:

O is line manager of O (B002): Creates the hierarchy between organizational units.O incorporates S (B003): Assigns a position to an organizational unit.C describes S (A007): Links a position to its template Job.S is holder P (B008): The most important relationship for integration, assigning an employee to a position.O cost center assignment K (A011): Links an org unit to a cost center.S manages O (A012): Designates a “chief position” or manager for an org unit.The Big Picture: The Organizational Plan

When you combine these objects and relationships, you create your Organizational Plan. This is the complete, dynamic model of your enterprise structure. This plan can contain multiple structures:

Organizational Structure: The hierarchy of organizational units.Reporting Structure: The hierarchy of positions showing who reports to whom.Staff Assignments: The complete picture of which positions belong to which org units and which people hold those positions.

To view these different structures, the system uses Evaluation Paths. An evaluation path is simply a predefined chain of relationships that tells the system how to navigate the network of objects to display a specific structure. For example, the

O-S-P evaluation path tells the system to start with an Org Unit (O), find all its Positions (S), and then find the People (P) holding those positions.

Chapter 2: Planning & Structuring Your Organization

A key strength of SAP’s Organizational Management is its ability to manage your structure over time and simulate changes without impacting your live operations. This is achieved through a few core properties.

Time is Everything: Validity Periods ⏳

Every piece of data in OM—every object, every relationship, every characteristic—has a

start date and an end date. This validity period defines the lifespan of that data record.

This is incredibly powerful because it allows you to:

Maintain a full history: You can see exactly what your organization looked like on any date in the past.Plan for the future: You can create new org units, positions, or relationships that will only become active on a future date. For example, you can build out the structure for a new department months before it officially opens.Manage transitions smoothly: When a department is closed, you don’t delete it. You delimit it by setting an end date. The data is preserved for historical reporting but is no longer active.“What-If” Scenarios: Plan Versions 📋

Plan Versions are parallel universes for your organizational plan. They allow you to create and manage multiple, separate org plans simultaneously within the same system.

The 01 Current Plan: This is almost always the active, integrated plan version that your live business operations run on.Planning Versions: You can create copies of the current plan to simulate different scenarios, such as an Acquisition Scenario or a Downsizing Scenario. You can model changes, analyze the impact, and plan costs in these “sandbox” versions without any risk to your live data.

Key Customizing Point: The active plan version is set in table T77S0 with the entry PLOGI PLOGI. This setting is foundational and should not be changed after go-live.

The Lifecycle of a Change: Plan Statuses ✅

Every data record (infotype) can go through a status cycle, which is especially useful for creating approval workflows. The primary statuses are:

Planned: A proposed change that is not yet active.Submitted: Sent for approval.Approved: Approved but not yet active.Active: The change is live and operational in the system.Rejected: A proposed change that was denied.

While you can use all statuses, many companies simplify the process and primarily use the

Active status for direct changes.

Automatic Data Flow: The Power of Inheritance

Inheritance is a key feature that promotes data consistency and reduces manual effort. When objects are linked in a hierarchy, attributes from higher-level objects can flow down to lower-level ones.

Cost Center Inheritance: If you assign a cost center to a high-level org unit (e.g., “Human Resources”), all subordinate org units (“Personnel Admin,” “Talent Development”) and their positions will automatically inherit that cost center, unless a more specific assignment is made at a lower level.Job-to-Position Inheritance: When a position is created from a job, it inherits attributes like tasks, required qualifications, and planned compensation from the job.Chapter 3: Maintaining the Organizational Plan

Now that we understand the concepts, let’s explore the modern tools in SAP S/4HANA for creating, changing, and displaying your organizational plan.

The Modern Way: SAP Fiori Apps

For day-to-day maintenance, SAP Fiori provides a user-friendly, web-based experience. The primary app for this is Manage Organizational Structure (App ID: F5324). This app is the modern successor to the classic “Organization and Staffing” interface (PPOME/PPOCE).

With this app, you can:

Visually navigate your org structure in a tree format.Create new organizational units and positions.Assign positions to org units using simple drag-and-drop.Assign employees (holders) to positions.Delimit objects that are no longer needed.Maintain the most important details (infotypes) for each object in a clear, tabbed layout.Classic but Powerful: Expert Mode (SAP GUI)

For consultants and key users who need to perform detailed maintenance on specific object characteristics (infotypes), the classic SAP GUI “Expert Mode” is still an indispensable tool.

The main transaction code is PP01 – Maintain Object. From this single screen, you can:

Select any object by its type and ID.See a list of all available infotypes for that object.Create, change, display, copy, delimit, or delete any infotype record for the object.

This provides granular control over every piece of data in the OM module.

Key Infotypes in Detail

Here are some of the most commonly maintained infotypes you will work with, both in Fiori and the GUI:

Infotype 1000: Object: Defines the existence of an object, including its name and validity period. This is the first infotype created for any new object.Infotype 1001: Relationships: The engine of OM. Every link between objects is a record in this infotype.Infotype 1003: Department/Staff: An important flag for organizational units. The “Staff” checkbox indicates an advisory unit (like a board assistant) that sits outside the main hierarchy. The “Department” checkbox can be used for integration with Personnel Administration to define official departmental units.Infotype 1007: Vacancy: This infotype explicitly flags a position as vacant and open for recruitment. This is crucial for integration with Recruiting modules. An occupied position can also be flagged as vacant if you know the holder is leaving in the future.Infotype 1008: Account Assignment Features: This stores default values for Personnel Area, Personnel Subarea, and Business Area. These values are passed to an employee’s record during hiring, ensuring consistency with Finance and HR policies.Infotype 1011: Work Schedule: Defines the planned working hours for a position or org unit (e.g., 40 hours/week). This is used as a default value and for comparison when an employee’s personal work schedule is defined in HXM.Infotype 1018: Cost Distribution: Allows you to split the costs of a position or org unit across multiple cost centers or other financial objects (e.g., 70% to Cost Center A and 30% to Internal Order B).Chapter 4: Integration with S/4HANA

Organizational Management does not exist in a vacuum. Its primary purpose is to provide a consistent structural foundation for other processes and modules.

Integration with Human Experience Management (HXM)

This is the most critical integration point. HXM (formerly Personnel Administration or PA) manages all data related to individual employees.

The Link: The integration is established when a Person (P) is assigned as the holder of a Position (S).How it Works: When an employee is hired or transferred in HXM, the user selects the target position. The system then automatically reads the OM structure and populates the employee’s

Organizational Assignment (Infotype 0001) with the correct Org Unit, Job, and Cost Center from that position. If integration is active, these fields in the employee record become display-only, ensuring that the data can only originate from OM, guaranteeing consistency.

Integration with Financials (Controlling)

The link to finance is primarily through Cost Centers.

The Link: A Cost Center Assignment relationship (A011) is created between an Org Unit or Position and a Cost Center.How it Works: When an employee is assigned to a position, they automatically inherit the position’s cost center assignment. All payroll costs for that employee are then posted to that cost center in the financial ledger. The

Cost Distribution (Infotype 1018) allows for even more granular cost allocation.

Setting Up Integration: Key Steps

Activating integration is a critical configuration task performed by consultants. The core settings are managed in the Customizing table

T77S0.

Set Active Plan Version: The entry PLOGI PLOGI must be set to 01 (or your active plan version). Without this, integration is off.Activate Main Integration Switch: The entry PLOGI ORGA must be set to X to enable the link between OM and HXM/PA objects.Run Initial Load Reports: To establish consistency between existing HXM/PA data and a new OM module (or vice-versa), SAP provides standard reports:RHINTE00: Creates OM objects (Org Units, Positions, Jobs) based on data already existing in HXM employee records.RHINTE10: Creates the necessary entries in HXM configuration tables for objects that were created first in OM.RHINTE30: Updates the employee’s Organizational Assignment infotype (0001) with data from OM.RHINTE20: A reconciliation report to check for inconsistencies between the two modules.Chapter 5: Business Case & Test Plan

Let’s apply these concepts in a practical, end-to-end business scenario.

🏢Business Scenario: Global Innovations Inc.

Global Innovations Inc. is a growing technology firm. They are restructuring their Human Resources department to better support their global workforce. They need to create a new “Global HR” organizational unit, define new roles, create positions, and hire an employee into one of the new roles.

This test plan will guide you through building this structure from scratch.

Test Plan: Restructuring the HR Department

Objective: To correctly model the new HR structure in SAP S/4HANA, create positions, and hire an employee, ensuring data flows correctly through integrated systems.

Part 1: Master Data Prerequisites

Before building the structure, we need the foundational master data.

Exercise 1.1: Create Cost Centers

App: Manage Cost Centers (Fiori App ID F1563) or SAP GUI KS01.Task: Create two new cost centers for the fiscal year.HR-ADMIN-##: HR Administration – Group ##HR-TALENT-##: Talent Development – Group ##(Replace ## with your assigned group number, e.g., 01).

Exercise 1.2: Create Jobs

App: Manage Job Descriptions (Fiori) or SAP GUI PO03 / PP01.Task: Create the following general Jobs that will be used as templates.HR_MGR_##: HR Manager – Group ##HR_ADMIN_##: HR Administrator – Group ##TAL_SPEC_##: Talent Specialist – Group ##Part 2: Building the Organizational Structure

Now we will use the core OM maintenance tools to build the org plan.

Exercise 2.1: Create the New “Global HR” Structure

App: Manage Organizational Structure (Fiori App ID F5324).Task: Create the main organizational units.Create a new root organizational unit called

Global HR – ##.

In the details section for this org unit, go to the

Account Assignment tab and assign the Cost Center HR-ADMIN-## as the master cost center.

Select the

Global HR – ## unit, and create two subordinate org units underneath it:

Personnel Admin – ##Talent Development – ##Select the Talent Development – ## unit and assign it the specific Cost Center HR-TALENT-##. This will override the inherited cost center for this specific branch of the structure.Save your changes.

Exercise 2.2: Create Positions within the Structure

App: Manage Organizational Structure (Fiori).Task: Create the specific positions (the “slots” for employees) within your new org units.Select the Talent Development – ## org unit.Create a new position within it named Head of Talent Dev – ##.In the position’s details, link it to the

HR_MGR_## Job you created earlier.

Select the Personnel Admin – ## org unit.Create a new position named PA Administrator – ##.Link this position to the HR_ADMIN_## Job.Save your changes. You now have an organizational structure with defined, vacant positions.

Exercise 2.3: Hire an Employee (HXM Integration)

App: Manage Workforce (Fiori) or SAP GUI PA40 (Personnel Actions).Task: Hire a new employee into the PA Administrator – ## position and observe the data integration.Start the “Hiring” action for a new employee.In the initial screen, enter the

Start Date and specify the Position Number for PA Administrator – ##.

Press Enter.

Observe the results: The system should automatically propose values for Personnel Area, Employee Group, and Employee Subgroup based on settings inherited from the position and its org unit.

Proceed to the Organizational Assignment screen (Infotype 0001).Observe the results: The fields for Organizational Unit, Job, and Cost Center should be filled automatically and greyed out (display-only). This confirms that integration is active and data is flowing correctly from your OM structure.Complete the hiring process by entering the required personal data.Part 3: Reporting and Analysis

Finally, let’s use reporting tools to view and validate our new structure.

Exercise 3.1: View the Organizational Chart

App: Display Organizational Structure (Fiori).Task: View the structure you built.Search for your root organizational unit, Global HR – ##.The app will display the hierarchy, showing the org units, the positions within them, and the name of the employee you just hired as the holder of the

PA Administrator – ## position.

Exercise 3.2: Find Vacant Positions

App: SAP GUI Report S_AHR_61016502 – Vacant Positions.Task: Run a report to find all positions that are not yet filled.Enter your root organizational unit Global HR – ## as the object to be evaluated.Execute the report.The result list should show the position Head of Talent Dev – ## as vacant, while the PA Administrator – ## position should not appear on this list because it is now occupied.

Congratulations! You have successfully completed an end-to-end process in Organizational Management, from master data creation and structure building to hiring an employee and running reports.

Chapter 6: Advanced Organizational Structures

While a standard hierarchy meets the needs of many companies, modern enterprises often require more complex structures to manage projects, product lines, or regional responsibilities. SAP Organizational Management provides powerful tools to model these advanced scenarios.

Matrix Organizations: The Two-Boss System 🌐

matrix organization is a structure where employees have multiple reporting lines. For instance, a software developer might report to their functional line manager (e.g., “Head of Engineering”) and simultaneously to a specific project manager (e.g., “Project Alpha Lead”). This creates a two-dimensional, or matrix, chain of command.

SAP provides a dedicated interface to manage these structures.

Concept: The matrix view maps the objects from one structure (e.g., the standard organizational hierarchy) against the objects of a second structure (e.g., a project structure). You can then create relationships between objects from the two dimensions.SAP S/4HANA Tool: The classic interface for this is Matrix Maintenance (SAP GUI transaction PPME).How it Works:You define

Dimension 1, typically your standard org structure, by selecting a root object (like an org unit) and an evaluation path (like O-S-P to show all people).

You define

Dimension 2, the second structure, such as a project team hierarchy.

The interface displays a grid. You can then create a new relationship (e.g., “is a member of project team”) simply by clicking the intersection between an employee from Dimension 1 and a project team from Dimension 2.

Customizing Point: The types of matrices you can create are defined in Customizing, where you specify the object types, evaluation paths for each dimension, and the relationship type that connects the two dimensions.

General Structures: The All-Purpose Tool 🛠️

What if you need to model a structure that doesn’t fit a standard view, perhaps involving custom object types? The General Structures interface (SAP GUI transaction PPST) is the answer.

This highly flexible tool allows you to display and maintain

any structure in your system, provided you can define it with an evaluation path. It’s particularly useful for:

Mapping corporate legal structures (e.g., holding companies and their subsidiaries).Visualizing relationships between non-standard or custom object types.Performing maintenance on relationships that aren’t available in the standard Fiori apps.

Using it is simple: you provide a starting object, an evaluation path, and a time period, and the system displays the resulting structure in a tree format, ready for maintenance.

Chapter 7: Empowering Managers with Self-Service

In a modern enterprise, HR processes are no longer confined to the HR department. Line managers are increasingly responsible for administrative and strategic tasks related to their teams. SAP S/4HANA empowers them through

Manager Self-Service (MSS), a collection of Fiori apps designed specifically for managers.

MSS is the modern, portal-based successor to the classic “Manager’s Desktop”. It provides a single point of entry for managers to access information and initiate processes for their area of responsibility.

Prerequisites for MSS

For MSS to work, a correctly maintained OM structure is absolutely essential. The system identifies a manager’s team using specific relationships:

The manager must hold a

Position.

That Position must be designated as the

chief position of an Organizational Unit (using the manages A/B012 relationship).

The manager’s employee record must be linked to their system

User ID (in Infotype 0105, subtype 0001).

When the manager logs in, the system reads this structure to determine which employees and org units fall under their responsibility.

Common MSS Functions

MSS provides managers with a suite of apps to handle a wide range of tasks, streamlining processes and reducing the burden on HR.

Team Management:View detailed employee profiles and org charts for their team.Access contact information and view team calendars for leave and travel.Compensation & Budgeting:Initiate compensation changes like salary adjustments or bonuses.Monitor budgets and compare planned vs. actual personnel costs.Recruitment & Staffing:Request to open a new position.View applicants and participate in the hiring process.Organizational Changes:Initiate an

organizational reassignment for an employee, such as a transfer to a new position or a change of reporting line.

Approvals (Workflow Integration):Approve requests submitted by employees via

Employee Self-Service (ESS), such as leave requests, travel expenses, and timesheet entries.

When a manager initiates a process like a transfer or a pay raise, it typically triggers an SAP Business Workflow. The request is stored as a plan and routed to the responsible HR administrator’s inbox for review, validation, and final execution. This ensures that while managers are empowered to act, proper governance and HR oversight are maintained.

Chapter 8: In-Depth Reporting and Analytics

A well-maintained organizational plan is a goldmine of data. SAP S/4HANA provides a suite of standard reports to help you analyze your structure, audit your data, and answer critical business questions.

Reporting in OM is primarily based on the Logical Database PCH, a technical framework designed specifically for reading the complex, networked data of the organizational plan.

Understanding the Standard Selection Screen

Most OM reports share a standard selection screen that allows you to precisely define the data you want to see. The key parameters are:

Plan Version: Specifies which plan version to report on (e.g., the 01 Current Plan).Object Type / ID: Allows you to start the report for one or more specific objects (e.g., your company’s root org unit).Evaluation Path: This is the most important parameter for structural reports. It tells the system

how to navigate the structure from your starting object. For example, using the

O-S-P path will show org units, their positions, and the employees in them.

Reporting Period: Defines the key date or period for which the data should be valid, allowing you to run historical reports.Display Depth: Limits how many levels of the hierarchy the report will show.Key Standard Reports

You can find these reports in the SAP Easy Access menu under Human Resources → Organizational Management → Info System.

Structure Display / Maintenance (RHSTRU00): This is the fundamental structural report. It provides a technical, tree-based view of any structure based on a starting object and an evaluation path. It’s excellent for troubleshooting and validating relationships.Organizational Structure with Persons: A user-friendly report that displays the organizational chart with the names of the employees holding each position.Vacant Positions: A critical report for recruitment that lists all positions within a given structure that are not currently occupied.Existing Objects (e.g., Existing Jobs): Sequential reports that provide a list of all objects of a certain type, allowing you to audit your master data.Structural Graphics: This classic tool displays the organizational plan as a graphical chart. While still available, many modern Fiori apps now embed similar visualizations directly.HR Master Data Reporting via OM Structures (RHPNPSUP): A powerful integration report. It first reads the OM structure to gather a list of employees (personnel numbers) and then runs a standard HXM/PA report (like a salary list) for just that group of people.Conclusion

You now have a comprehensive understanding of Organizational Management in SAP S/4HANA, from its core object-oriented concepts to the modern Fiori apps used to maintain it.

Remember, OM is more than just a module; it is the foundational blueprint of your enterprise within SAP. A clean, accurate, and well-maintained organizational plan is the prerequisite for seamless integration, efficient workflows, empowered managers, and insightful reporting across your entire S/4HANA landscape. By mastering these principles, you are not just managing data—you are building the digital framework for your company’s success.

Appendix 1: Data Used in Exercises

This data is provided for use in the training exercises outlined in this guide.

Type of Data

Data in Training System

Object IDs (if available)

Group number (##)

00-30

Year (YYYY)

Current year

Company code

CABB

Personnel area

CABB

Personnel subarea

0003 Purchasing

Employee subgroup

Organizational Unit

Human Resources Consolidated Group

30015452

Organizational Unit

## Human Resources

Organizational Unit

## Personnel Administration

Organizational Unit

## Personnel Development

Job

## Administrator

Position

## Administrator for Personnel Administration

Position

## Administrator for Personnel Development

Job

## Manager

Position

## Personnel Development Manager

Cost center

4711 or 4712

Person

111991##

Person

050995##

Task

00 Employee Management

98000152

Task

00 Run Reports

98000153

Task

00 Perform Presentations

98000154

Index

Account Assignment FeaturesActionsActive Plan VersionActive StatusApproved StatusArea of Responsibility

Basic Object TypesBatch Input SessionBusiness Packages

Change Organizational StructureChief PositionCost centerCustomizing

Data ModelDetail AreaDimensionDisplay Depth

EmployeeEvaluation PathsExpert Mode

General Structures

HolderHuman Resources Information System (HIS)

InfotypesInheritanceIntegrationInverse RelationshipiViews

Job

Manager Self-ServiceManager’s DesktopMatrix Organizations

Object IDObject typesObject-Oriented DesignOrganization and StaffingOrganizational PlanOrganizational StructureOrganizational Unit

PersonPersonnel Administration IntegrationPlan StatusPlan VersionsPlanned StatusPosition

RelationshipsReporting Structure

Simple MaintenanceStaff AssignmentStructural Graphics Interface

TaskTime ConstraintsTree Structure

VacancyValidity Period

Work areaWork centerWorkflowWorksets

Organizational Management in SAP S/4HANAWhat is Organizational Management?At its core, Organizational Management is the central module in SAP S/4HANA used to map your entire enterprise structure. It’s not just about creating an org chart; it’s about building a dynamic, time-dependent model of your business that can be used for:Analysis and Reporting: Gaining insights into your current organizational plan.Workforce Planning: Simulating future structures and planning for reorganizations or expansions.Process Automation: Driving workflows by ensuring tasks are routed to the right people in the right roles.Integration: Serving as the foundational “blueprint” for a vast range of other SAP modules, including Human Experience Management (HXM), Financials (Controlling), Logistics, and more.Think of OM as the digital skeleton of your company. Every department, team, role, and employee position is a bone, and the relationships between them allow the skeleton to function. A well-defined OM structure is the prerequisite for countless business processes.From the Past to the Future: What’s New in S/4HANA?While the core concepts of OM remain timeless, the way we interact with them has evolved. This guide bridges the gap between the classic SAP ERP approach and the modern S/4HANA experience:User Experience: We’ll focus on intuitive SAP Fiori apps, which provide a modern, web-based interface for managing your org structure, replacing older transactions like “Organization and Staffing” (PPOME).Real-Time Analytics: Leveraging the power of the HANA database, reporting on your org structure is faster and more powerful than ever.Simplified Integration: S/4HANA provides a more streamlined integration between OM, HXM (the successor to HCM), and Finance.Let’s begin by exploring the fundamental concepts that make up your organizational blueprint.Chapter 1: The Core Concepts of OMTo master Organizational Management, you first need to understand its unique, object-oriented design. Instead of static tables, OM uses a flexible network of individual objects and the relationships between them.The Object-Oriented Approach 🧱Every element in your organization is treated as a separate, self-containedobject with its own individual characteristics and data. These objects are then connected to each other throughrelationships to form a dynamic network that mirrors your business reality.Objects: These are the building blocks. Think of them as the nouns of your organization (e.g., a department, a job title, a specific person).Relationships: These are the connections, or the verbs, that link objects together (e.g., a department incorporates a position, a position is held by a person).Characteristics: These are the attributes or adjectives that describe an object, stored in data records called infotypes (e.g., the name of an org unit, the working hours for a position).This model provides incredible flexibility to map complex structures, plan changes, and run detailed reports.The Building Blocks: Core Object TypesWhile you can create custom object types, five basic types form the foundation of nearly every organizational plan. Each has a unique one-letter key.🏢Organizational Unit (Key: O)An Organizational Unit describes the different business units in your company. These are typically structured hierarchically to form your departmental structure, like a family tree for your company.Examples: Executive Board, Human Resources Department, Sales Team, Project Group.Key Function: They group together positions and can be linked to financial entities like Cost Centers.🗂️ Job (Key: C)A Job is ageneral classification or template for responsibilities and tasks, not a specific role. Jobs are used to standardize roles across the company.Examples: Manager, Consultant, Secretary, Engineer.Key Function: They serve as templates for positions. A position inherits tasks, qualifications, and planned compensation from its describing Job, which significantly reduces data entry.👤Position (Key: S)A Position is aspecific, individual instance of a Job within a particular Organizational Unit. Positions are the concrete “slots” that can be held by people.Examples: “Manager of Sales, North America” (based on the “Manager” Job), “Secretary for Production Department” (based on the “Secretary” Job).Key Function: Positions are the critical link between the organizational structure (OM) and the people (HXM). An employee is hired into a Position, not a Job. A position can be 100% filled, partially filled, or vacant.💰Cost Center (Key: K)A Cost Center is an object that represents a location where costs are incurred. It’s a fundamental object from theControlling (CO) module.Examples: CC-SALES-NA (North American Sales), CC-HR-ADMIN.Key Function: By linking Cost Centers to Organizational Units or Positions, you ensure that all personnel costs associated with those units are correctly allocated in your financial system. This is a primary point of integration between OM and Finance.🧑‍💼 Person (Key: P)A Person represents an individual employee in your company who holds a position.Examples: John Smith, Maria Garcia.Key Function: While the Person object exists in OM, most of its detailed data (like address, salary, bank details) is maintained in the Human Experience Management (HXM) module. The link is made when a Person is assigned as theholder of a Position.Connecting the Dots: Key RelationshipsRelationships are stored in a specific infotype (1001) and are reciprocal; defining one direction automatically creates the inverse. For example, if you statePosition A reports to Position B, the system automatically knows Position B is the line manager of Position A.Here are some of the most critical relationships:O is line manager of O (B002): Creates the hierarchy between organizational units.O incorporates S (B003): Assigns a position to an organizational unit.C describes S (A007): Links a position to its template Job.S is holder P (B008): The most important relationship for integration, assigning an employee to a position.O cost center assignment K (A011): Links an org unit to a cost center.S manages O (A012): Designates a “chief position” or manager for an org unit.The Big Picture: The Organizational PlanWhen you combine these objects and relationships, you create your Organizational Plan. This is the complete, dynamic model of your enterprise structure. This plan can contain multiple structures:Organizational Structure: The hierarchy of organizational units.Reporting Structure: The hierarchy of positions showing who reports to whom.Staff Assignments: The complete picture of which positions belong to which org units and which people hold those positions.To view these different structures, the system uses Evaluation Paths. An evaluation path is simply a predefined chain of relationships that tells the system how to navigate the network of objects to display a specific structure. For example, theO-S-P evaluation path tells the system to start with an Org Unit (O), find all its Positions (S), and then find the People (P) holding those positions.Chapter 2: Planning & Structuring Your OrganizationA key strength of SAP’s Organizational Management is its ability to manage your structure over time and simulate changes without impacting your live operations. This is achieved through a few core properties.Time is Everything: Validity Periods ⏳Every piece of data in OM—every object, every relationship, every characteristic—has astart date and an end date. This validity period defines the lifespan of that data record.This is incredibly powerful because it allows you to:Maintain a full history: You can see exactly what your organization looked like on any date in the past.Plan for the future: You can create new org units, positions, or relationships that will only become active on a future date. For example, you can build out the structure for a new department months before it officially opens.Manage transitions smoothly: When a department is closed, you don’t delete it. You delimit it by setting an end date. The data is preserved for historical reporting but is no longer active.”What-If” Scenarios: Plan Versions 📋Plan Versions are parallel universes for your organizational plan. They allow you to create and manage multiple, separate org plans simultaneously within the same system.The 01 Current Plan: This is almost always the active, integrated plan version that your live business operations run on.Planning Versions: You can create copies of the current plan to simulate different scenarios, such as an Acquisition Scenario or a Downsizing Scenario. You can model changes, analyze the impact, and plan costs in these “sandbox” versions without any risk to your live data.Key Customizing Point: The active plan version is set in table T77S0 with the entry PLOGI PLOGI. This setting is foundational and should not be changed after go-live.The Lifecycle of a Change: Plan Statuses ✅Every data record (infotype) can go through a status cycle, which is especially useful for creating approval workflows. The primary statuses are:Planned: A proposed change that is not yet active.Submitted: Sent for approval.Approved: Approved but not yet active.Active: The change is live and operational in the system.Rejected: A proposed change that was denied.While you can use all statuses, many companies simplify the process and primarily use theActive status for direct changes.Automatic Data Flow: The Power of InheritanceInheritance is a key feature that promotes data consistency and reduces manual effort. When objects are linked in a hierarchy, attributes from higher-level objects can flow down to lower-level ones.Cost Center Inheritance: If you assign a cost center to a high-level org unit (e.g., “Human Resources”), all subordinate org units (“Personnel Admin,” “Talent Development”) and their positions will automatically inherit that cost center, unless a more specific assignment is made at a lower level.Job-to-Position Inheritance: When a position is created from a job, it inherits attributes like tasks, required qualifications, and planned compensation from the job.Chapter 3: Maintaining the Organizational PlanNow that we understand the concepts, let’s explore the modern tools in SAP S/4HANA for creating, changing, and displaying your organizational plan.The Modern Way: SAP Fiori AppsFor day-to-day maintenance, SAP Fiori provides a user-friendly, web-based experience. The primary app for this is Manage Organizational Structure (App ID: F5324). This app is the modern successor to the classic “Organization and Staffing” interface (PPOME/PPOCE).With this app, you can:Visually navigate your org structure in a tree format.Create new organizational units and positions.Assign positions to org units using simple drag-and-drop.Assign employees (holders) to positions.Delimit objects that are no longer needed.Maintain the most important details (infotypes) for each object in a clear, tabbed layout.Classic but Powerful: Expert Mode (SAP GUI)For consultants and key users who need to perform detailed maintenance on specific object characteristics (infotypes), the classic SAP GUI “Expert Mode” is still an indispensable tool.The main transaction code is PP01 – Maintain Object. From this single screen, you can:Select any object by its type and ID.See a list of all available infotypes for that object.Create, change, display, copy, delimit, or delete any infotype record for the object.This provides granular control over every piece of data in the OM module.Key Infotypes in DetailHere are some of the most commonly maintained infotypes you will work with, both in Fiori and the GUI:Infotype 1000: Object: Defines the existence of an object, including its name and validity period. This is the first infotype created for any new object.Infotype 1001: Relationships: The engine of OM. Every link between objects is a record in this infotype.Infotype 1003: Department/Staff: An important flag for organizational units. The “Staff” checkbox indicates an advisory unit (like a board assistant) that sits outside the main hierarchy. The “Department” checkbox can be used for integration with Personnel Administration to define official departmental units.Infotype 1007: Vacancy: This infotype explicitly flags a position as vacant and open for recruitment. This is crucial for integration with Recruiting modules. An occupied position can also be flagged as vacant if you know the holder is leaving in the future.Infotype 1008: Account Assignment Features: This stores default values for Personnel Area, Personnel Subarea, and Business Area. These values are passed to an employee’s record during hiring, ensuring consistency with Finance and HR policies.Infotype 1011: Work Schedule: Defines the planned working hours for a position or org unit (e.g., 40 hours/week). This is used as a default value and for comparison when an employee’s personal work schedule is defined in HXM.Infotype 1018: Cost Distribution: Allows you to split the costs of a position or org unit across multiple cost centers or other financial objects (e.g., 70% to Cost Center A and 30% to Internal Order B).Chapter 4: Integration with S/4HANAOrganizational Management does not exist in a vacuum. Its primary purpose is to provide a consistent structural foundation for other processes and modules.Integration with Human Experience Management (HXM)This is the most critical integration point. HXM (formerly Personnel Administration or PA) manages all data related to individual employees.The Link: The integration is established when a Person (P) is assigned as the holder of a Position (S).How it Works: When an employee is hired or transferred in HXM, the user selects the target position. The system then automatically reads the OM structure and populates the employee’sOrganizational Assignment (Infotype 0001) with the correct Org Unit, Job, and Cost Center from that position. If integration is active, these fields in the employee record become display-only, ensuring that the data can only originate from OM, guaranteeing consistency.Integration with Financials (Controlling)The link to finance is primarily through Cost Centers.The Link: A Cost Center Assignment relationship (A011) is created between an Org Unit or Position and a Cost Center.How it Works: When an employee is assigned to a position, they automatically inherit the position’s cost center assignment. All payroll costs for that employee are then posted to that cost center in the financial ledger. TheCost Distribution (Infotype 1018) allows for even more granular cost allocation.Setting Up Integration: Key StepsActivating integration is a critical configuration task performed by consultants. The core settings are managed in the Customizing tableT77S0.Set Active Plan Version: The entry PLOGI PLOGI must be set to 01 (or your active plan version). Without this, integration is off.Activate Main Integration Switch: The entry PLOGI ORGA must be set to X to enable the link between OM and HXM/PA objects.Run Initial Load Reports: To establish consistency between existing HXM/PA data and a new OM module (or vice-versa), SAP provides standard reports:RHINTE00: Creates OM objects (Org Units, Positions, Jobs) based on data already existing in HXM employee records.RHINTE10: Creates the necessary entries in HXM configuration tables for objects that were created first in OM.RHINTE30: Updates the employee’s Organizational Assignment infotype (0001) with data from OM.RHINTE20: A reconciliation report to check for inconsistencies between the two modules.Chapter 5: Business Case & Test PlanLet’s apply these concepts in a practical, end-to-end business scenario.🏢Business Scenario: Global Innovations Inc.Global Innovations Inc. is a growing technology firm. They are restructuring their Human Resources department to better support their global workforce. They need to create a new “Global HR” organizational unit, define new roles, create positions, and hire an employee into one of the new roles.This test plan will guide you through building this structure from scratch.Test Plan: Restructuring the HR DepartmentObjective: To correctly model the new HR structure in SAP S/4HANA, create positions, and hire an employee, ensuring data flows correctly through integrated systems.Part 1: Master Data PrerequisitesBefore building the structure, we need the foundational master data.Exercise 1.1: Create Cost CentersApp: Manage Cost Centers (Fiori App ID F1563) or SAP GUI KS01.Task: Create two new cost centers for the fiscal year.HR-ADMIN-##: HR Administration – Group ##HR-TALENT-##: Talent Development – Group ##(Replace ## with your assigned group number, e.g., 01).Exercise 1.2: Create JobsApp: Manage Job Descriptions (Fiori) or SAP GUI PO03 / PP01.Task: Create the following general Jobs that will be used as templates.HR_MGR_##: HR Manager – Group ##HR_ADMIN_##: HR Administrator – Group ##TAL_SPEC_##: Talent Specialist – Group ##Part 2: Building the Organizational StructureNow we will use the core OM maintenance tools to build the org plan.Exercise 2.1: Create the New “Global HR” StructureApp: Manage Organizational Structure (Fiori App ID F5324).Task: Create the main organizational units.Create a new root organizational unit calledGlobal HR – ##.In the details section for this org unit, go to theAccount Assignment tab and assign the Cost Center HR-ADMIN-## as the master cost center.Select theGlobal HR – ## unit, and create two subordinate org units underneath it:Personnel Admin – ##Talent Development – ##Select the Talent Development – ## unit and assign it the specific Cost Center HR-TALENT-##. This will override the inherited cost center for this specific branch of the structure.Save your changes.Exercise 2.2: Create Positions within the StructureApp: Manage Organizational Structure (Fiori).Task: Create the specific positions (the “slots” for employees) within your new org units.Select the Talent Development – ## org unit.Create a new position within it named Head of Talent Dev – ##.In the position’s details, link it to theHR_MGR_## Job you created earlier.Select the Personnel Admin – ## org unit.Create a new position named PA Administrator – ##.Link this position to the HR_ADMIN_## Job.Save your changes. You now have an organizational structure with defined, vacant positions.Exercise 2.3: Hire an Employee (HXM Integration)App: Manage Workforce (Fiori) or SAP GUI PA40 (Personnel Actions).Task: Hire a new employee into the PA Administrator – ## position and observe the data integration.Start the “Hiring” action for a new employee.In the initial screen, enter theStart Date and specify the Position Number for PA Administrator – ##.Press Enter.Observe the results: The system should automatically propose values for Personnel Area, Employee Group, and Employee Subgroup based on settings inherited from the position and its org unit.Proceed to the Organizational Assignment screen (Infotype 0001).Observe the results: The fields for Organizational Unit, Job, and Cost Center should be filled automatically and greyed out (display-only). This confirms that integration is active and data is flowing correctly from your OM structure.Complete the hiring process by entering the required personal data.Part 3: Reporting and AnalysisFinally, let’s use reporting tools to view and validate our new structure.Exercise 3.1: View the Organizational ChartApp: Display Organizational Structure (Fiori).Task: View the structure you built.Search for your root organizational unit, Global HR – ##.The app will display the hierarchy, showing the org units, the positions within them, and the name of the employee you just hired as the holder of thePA Administrator – ## position.Exercise 3.2: Find Vacant PositionsApp: SAP GUI Report S_AHR_61016502 – Vacant Positions.Task: Run a report to find all positions that are not yet filled.Enter your root organizational unit Global HR – ## as the object to be evaluated.Execute the report.The result list should show the position Head of Talent Dev – ## as vacant, while the PA Administrator – ## position should not appear on this list because it is now occupied.Congratulations! You have successfully completed an end-to-end process in Organizational Management, from master data creation and structure building to hiring an employee and running reports. Chapter 6: Advanced Organizational StructuresWhile a standard hierarchy meets the needs of many companies, modern enterprises often require more complex structures to manage projects, product lines, or regional responsibilities. SAP Organizational Management provides powerful tools to model these advanced scenarios.Matrix Organizations: The Two-Boss System 🌐Amatrix organization is a structure where employees have multiple reporting lines. For instance, a software developer might report to their functional line manager (e.g., “Head of Engineering”) and simultaneously to a specific project manager (e.g., “Project Alpha Lead”). This creates a two-dimensional, or matrix, chain of command.SAP provides a dedicated interface to manage these structures.Concept: The matrix view maps the objects from one structure (e.g., the standard organizational hierarchy) against the objects of a second structure (e.g., a project structure). You can then create relationships between objects from the two dimensions.SAP S/4HANA Tool: The classic interface for this is Matrix Maintenance (SAP GUI transaction PPME).How it Works:You defineDimension 1, typically your standard org structure, by selecting a root object (like an org unit) and an evaluation path (like O-S-P to show all people).You defineDimension 2, the second structure, such as a project team hierarchy.The interface displays a grid. You can then create a new relationship (e.g., “is a member of project team”) simply by clicking the intersection between an employee from Dimension 1 and a project team from Dimension 2.Customizing Point: The types of matrices you can create are defined in Customizing, where you specify the object types, evaluation paths for each dimension, and the relationship type that connects the two dimensions.General Structures: The All-Purpose Tool 🛠️What if you need to model a structure that doesn’t fit a standard view, perhaps involving custom object types? The General Structures interface (SAP GUI transaction PPST) is the answer.This highly flexible tool allows you to display and maintainany structure in your system, provided you can define it with an evaluation path. It’s particularly useful for:Mapping corporate legal structures (e.g., holding companies and their subsidiaries).Visualizing relationships between non-standard or custom object types.Performing maintenance on relationships that aren’t available in the standard Fiori apps.Using it is simple: you provide a starting object, an evaluation path, and a time period, and the system displays the resulting structure in a tree format, ready for maintenance.Chapter 7: Empowering Managers with Self-ServiceIn a modern enterprise, HR processes are no longer confined to the HR department. Line managers are increasingly responsible for administrative and strategic tasks related to their teams. SAP S/4HANA empowers them throughManager Self-Service (MSS), a collection of Fiori apps designed specifically for managers.MSS is the modern, portal-based successor to the classic “Manager’s Desktop”. It provides a single point of entry for managers to access information and initiate processes for their area of responsibility.Prerequisites for MSSFor MSS to work, a correctly maintained OM structure is absolutely essential. The system identifies a manager’s team using specific relationships:The manager must hold aPosition.That Position must be designated as thechief position of an Organizational Unit (using the manages A/B012 relationship).The manager’s employee record must be linked to their systemUser ID (in Infotype 0105, subtype 0001).When the manager logs in, the system reads this structure to determine which employees and org units fall under their responsibility.Common MSS FunctionsMSS provides managers with a suite of apps to handle a wide range of tasks, streamlining processes and reducing the burden on HR.Team Management:View detailed employee profiles and org charts for their team.Access contact information and view team calendars for leave and travel.Compensation & Budgeting:Initiate compensation changes like salary adjustments or bonuses.Monitor budgets and compare planned vs. actual personnel costs.Recruitment & Staffing:Request to open a new position.View applicants and participate in the hiring process.Organizational Changes:Initiate anorganizational reassignment for an employee, such as a transfer to a new position or a change of reporting line.Approvals (Workflow Integration):Approve requests submitted by employees viaEmployee Self-Service (ESS), such as leave requests, travel expenses, and timesheet entries.When a manager initiates a process like a transfer or a pay raise, it typically triggers an SAP Business Workflow. The request is stored as a plan and routed to the responsible HR administrator’s inbox for review, validation, and final execution. This ensures that while managers are empowered to act, proper governance and HR oversight are maintained.Chapter 8: In-Depth Reporting and AnalyticsA well-maintained organizational plan is a goldmine of data. SAP S/4HANA provides a suite of standard reports to help you analyze your structure, audit your data, and answer critical business questions.Reporting in OM is primarily based on the Logical Database PCH, a technical framework designed specifically for reading the complex, networked data of the organizational plan.Understanding the Standard Selection ScreenMost OM reports share a standard selection screen that allows you to precisely define the data you want to see. The key parameters are:Plan Version: Specifies which plan version to report on (e.g., the 01 Current Plan).Object Type / ID: Allows you to start the report for one or more specific objects (e.g., your company’s root org unit).Evaluation Path: This is the most important parameter for structural reports. It tells the systemhow to navigate the structure from your starting object. For example, using theO-S-P path will show org units, their positions, and the employees in them.Reporting Period: Defines the key date or period for which the data should be valid, allowing you to run historical reports.Display Depth: Limits how many levels of the hierarchy the report will show.Key Standard ReportsYou can find these reports in the SAP Easy Access menu under Human Resources → Organizational Management → Info System.Structure Display / Maintenance (RHSTRU00): This is the fundamental structural report. It provides a technical, tree-based view of any structure based on a starting object and an evaluation path. It’s excellent for troubleshooting and validating relationships.Organizational Structure with Persons: A user-friendly report that displays the organizational chart with the names of the employees holding each position.Vacant Positions: A critical report for recruitment that lists all positions within a given structure that are not currently occupied.Existing Objects (e.g., Existing Jobs): Sequential reports that provide a list of all objects of a certain type, allowing you to audit your master data.Structural Graphics: This classic tool displays the organizational plan as a graphical chart. While still available, many modern Fiori apps now embed similar visualizations directly.HR Master Data Reporting via OM Structures (RHPNPSUP): A powerful integration report. It first reads the OM structure to gather a list of employees (personnel numbers) and then runs a standard HXM/PA report (like a salary list) for just that group of people.ConclusionYou now have a comprehensive understanding of Organizational Management in SAP S/4HANA, from its core object-oriented concepts to the modern Fiori apps used to maintain it.Remember, OM is more than just a module; it is the foundational blueprint of your enterprise within SAP. A clean, accurate, and well-maintained organizational plan is the prerequisite for seamless integration, efficient workflows, empowered managers, and insightful reporting across your entire S/4HANA landscape. By mastering these principles, you are not just managing data—you are building the digital framework for your company’s success.Appendix 1: Data Used in ExercisesThis data is provided for use in the training exercises outlined in this guide.Type of DataData in Training SystemObject IDs (if available)Group number (##)00-30 Year (YYYY)Current year Company codeCABB Personnel areaCABB Personnel subarea0003 Purchasing Employee subgroupX7 Organizational UnitHuman Resources Consolidated Group30015452Organizational Unit## Human Resources Organizational Unit## Personnel Administration Organizational Unit## Personnel Development Job## Administrator Position## Administrator for Personnel Administration Position## Administrator for Personnel Development Job## Manager Position## Personnel Development Manager Cost center4711 or 4712 Person111991## Person050995## Task00 Employee Management98000152Task00 Run Reports98000153Task00 Perform Presentations98000154 IndexAAccount Assignment FeaturesActionsActive Plan VersionActive StatusApproved StatusArea of ResponsibilityBBasic Object TypesBatch Input SessionBusiness PackagesCChange Organizational StructureChief PositionCost centerCustomizingDData ModelDetail AreaDimensionDisplay DepthEEmployeeEvaluation PathsExpert ModeGGeneral StructuresHHolderHuman Resources Information System (HIS)IInfotypesInheritanceIntegrationInverse RelationshipiViewsJJobMManager Self-ServiceManager’s DesktopMatrix OrganizationsOObject IDObject typesObject-Oriented DesignOrganization and StaffingOrganizational PlanOrganizational StructureOrganizational UnitPPersonPersonnel Administration IntegrationPlan StatusPlan VersionsPlanned StatusPositionRRelationshipsReporting StructureSSimple MaintenanceStaff AssignmentStructural Graphics InterfaceTTaskTime ConstraintsTree StructureVVacancyValidity PeriodWWork areaWork centerWorkflowWorksets Read More Technology Blog Posts by Members articles

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