Department Classifications

A department can be classified as a project organization, sales and marketing organization, or cost organization.

A point to note is that a department name must be unique. This rule applies even when the department is classified as a project organization or an inventory organization. For example, if you create a department with name Vision Corp. Sales, you can't create another department with the same name. Also, if you classify this department as a project organization, you can't create another project organization as well with the same name.

Or, if you create a division with the name Vision Corp. Marketing that is classified as a department, which in turn is classified as a project organization, you can't create another division, department or project organization with the same name.

Oracle Fusion Cloud Human Capital Management (HCM) uses trees to model organization hierarchies. It provides predefined tree structures for department and other organizational hierarchies that can include organizations with any classification.

Project Organization

Classify departments as a project owning organization to enable associating them with projects or tasks. The project association is one of the key drivers for project access security.

In addition, you must classify departments as project expenditure organizations to enable associating them to project expenditure items. Both project owning organizations and project expenditure organizations can be used by Oracle Subledger Accounting to derive accounts for posting Oracle Fusion Cloud Project Management accounting entries to Oracle General Ledger.

Sales and Marketing Organization

In sales applications, you can define sales and marketing organizations. Sales organization hierarchies are used to report and forecast sales results. Salespeople are defined as resources assigned to these organizations.

In some enterprises, the HCM departments and hierarchies correspond to sales organizations and hierarchies. Examining the decision on how to model sales hierarchies in relationship to department hierarchies when implementing Customer Relationship Management to eliminate any possible redundancy in the definition of the organizations is important.

The following figure illustrates a management hierarchy, in which the System Components Division tracks its expenses in two cost centers, Air Compressors and Air Transmission. At the department level, two organizations with a classification of Department are defined, the Marketing Department and Sales Department. These two departments can be also identified as a Resource Organizations, which enable assigning resources, such as salespeople, and other sales specific information to them. Each department is represented in the chart of accounts by more than one cost center, enabling granular as well as hierarchical reporting.

The figure illustrates a management hierarchy, in which the System Components Division tracks its expenses in two cost centers. The department is defined as an organization with a classification of Marketing Department, and a classification of Sales Department.

Cost Organization

Oracle Project Costing uses a cost organization to represent a single physical inventory facility or group of inventory storage centers, for example, inventory organizations. This cost organization can roll up to a manager with responsibility for the cost center in the financial reports.

A cost organization can represent a costing department. Consider this relationship when determining the setup of departments in HCM. No system dependencies are required for these two entities, cost organization and costing department, to be set up in the same way.