SAP

Project management solu2ons in detail:

Cost Planning & Forecas2ng Varia2on Management

This presenta2on

This presenta,on presents end-to-end solu,ons to manage project cost planning, execu,on, monitoring, forecas,ng and varia,ons in SAP The project data is managed in the integrated SAP ECC system enhanced by Novecos extended Project Management (ePM) add-on

Cost Planning and Forecas2ng solu2ons

Process overview Step-by-step walkthrough

Project Management Business Process Map

Rough cut Cost Estimation Budget Preparation Profitability Plan Quotation from project Cost Estimation Pricing and Conditions Link to Project

SAP Standard

Billing: Lump-Sum, Cost Plus, Schedule of rate Revenue Plan & Actual Integration Labour Internal External Materials & Services Overheads

Network scheduling Cost Plan Distribution

PR

PO

GR

Capacity planning Manpower planning Personnel Management

PR

PO

SES

Invoice

Noveco ePM

Progress Assessment Cost & Work to Complete Estimated Costs at Completion

Project Variation register Cost Estimation Cost integration with EAC/CTC

Project KPIs monitoring Exception reporting Detailed Reporting

Project Lifecycle: Es2ma2ng and Planning

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

Create Project Cost Plan

Option1: create directly in PS Option2: crate automatically from external estimate

Project Cost Planning in SAP

Type Labour Variable

Resource Design Engineering

Cost Element 400000 415000

Quan2ty 100 200

UOM H H

Price $80 $90

Value $8,000 $18,000 $26,000

Type Material Variable Labour Labour

Resource Cable Sub-Contract Welder [Link]

Cost Element 400000 417000 603000 701000

Quan2ty 100 1 200 50

UOM m2 AU H H

Price $50 $7,500 $40 $80

Value $5,000 $7,500 $8,000 $4,000 $24,500

Project Easy Cost Planning

Cost Es2ma2on can be created using cos2ng template

Easy Cost Planning highlights

Plan costs on Network Ac,vity and/or WBS on the same screen Plan mul,ple costs type and resources on the same project element (example above) Instant review of your total planned costs Integra,on with procurement Integra,on with resource planning (with Noveco ePM enhancements) Integra,on with Cost Forecas,ng (with Noveco ePM enhancements)

Project Lifecycle: Es2ma2ng and Planning

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

Create Project Cost Plan

Option1: create directly in PS Option2: crate automatically from external estimate

Project Cost Es2ma2on generated automa2cally

Create Cost Quan,ty Structure in an Es,ma,ng system Assign SAP Cost Elements Map es,mate to project WBS or NWA Generate Cost Es,mates in Easy Cost Planning on assigned project planning elements automa,cally

Excel

BAPI

Es2ma2ng soUware

Project Lifecycle: Es2ma2ng and Planning

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

Project Plan
Project Schedule Plan Cost distribution

Project Scheduling
Create Network Ac,vity Rela,onships Schedule Network System determines start and nish dates (earliest and latest) for each network ac,vity and project

Project Lifecycle: Es2ma2ng and Planning

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

Project Plan
Project Schedule Plan Cost distribution

Distribu2on of Es2mated Costs

$
Cost Estimate

Novecos ePM:
Cost Es,mate Distributed along the WBS and NWA start nish dates converts Cost Es,ma,on to Project Cost Forecasts Forecast Costs are distributed along project ,me line Generates Resource plan from Easy Cost Plan

Feb-10

Mar-10

Apr-10

May-10

Costs Estimate

Costs to Complete

Feb-10

Mar-10

Apr-10

May-10

Feb-10

Mar-10

Apr-10

May-10

Project Es2mated Cost are distributed as Cost Forecasts

Cost Forecasts are distributed along the project ,me frame. Users can manually adjust distribu,on pacern (Noveco ePM Workbench)

Project Cos2ng: cos2ng layers

Project planning phase finished:
Cost To Complete

Project structure created Cost Estimate saved on project Project start & finish date created Initial Cost Forecast generated from Cost Estimate Plan costs are distributed

Cost Estimate

Project Costing layers

Cost To Complete Cost Estimate Commitments

Actual Costs

Contingency

Variations

Project Management: Execu2on

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

Project Execution
Time sheets (internal labour/external labour) Service, Materials and Equipment Procurement Invoices & Payments

Project Actual Costs Collec2on

Time sheets
SubContracted Services

Expenses & other costs Material Consump2on from stock

Equipment & Materials Direct

Service and Material Procurement

EAC
Purchase Requisition

Actual Cost $0.0

Commitments $0.0

Cost To Complete $1000.0

$1,000.0

materials

EAC
Services Purchase Order

Actual Cost $0.0

Commitments $800.0

Cost To Complete $200.0

$1,000.0

Procurement of Materials or sub- contacted services directly to project Automa,c adjustments of Cost to Complete from raising commitments or actual costs (ePM workbench)

Good receipt or Service Entry

EAC $1,000.0

Actual Cost $500.0

Commitments $300.0

Cost To Complete $200.0

Invoice

Project Cos2ng: cos2ng layers

Cost To Complete Actual Costs & Commitments

Project Execution phase: Time confirmations posted Purchase Orders created Good receipts posted Service Entry sheets accepted Invoices & payments Cost Forecasts automatically recalculated

Cost Estimate

Project Costing layers

Cost To Complete Cost Estimate Commitments

Actual Costs

Contingency

Variations

Project Management: Cost Forecas2ng

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

Monitoring & Forecasting

Auto reduction of Cost To Complete Compare Cost Estimate with Estimate At Completion Manually change remaining Cost and Work

Project Management Business Process Map

Rough cut Cost Estimation Budget Preparation Profitability Plan Quotation from project Cost Estimation Pricing and Conditions Link to Project

SAP Standard

Billing: Lump-Sum, Cost Plus, Schedule of rate Revenue Plan & Actual Integration Labour Internal External Materials & Services Overheads

Network scheduling Cost Plan Distribution

PR

PO

GR

Capacity planning Manpower planning Personnel Management

PR

PO

SES

Invoice

Noveco ePM

Progress Assessment Cost & Work to Complete Estimated Costs at Completion

Project Variation register Cost Estimation Cost integration with EAC/CTC

Project KPIs monitoring Exception reporting Detailed Reporting

ePM: Project Manager Workbench

Project Manager Workbench

Automatically reduces Cost To Complete from posted actual costs and commitments Recalculates project Estimated Cost at Completion (EAC) Compares Project Plan vs EAC and presents exceptions in form of traffic lights Manual change of project work or cost to complete Drill down reports Forecast history Period specific CTC/EAC Etc.

Process overview Step-by-step walkthrough Cost Element based cost forecast Opera,on based cost forecast

Forecas2ng: Cost To Complete calcula2on Methods

Cost Element based CTC calculation

Cost Element 603000 - Concrete work 610000 - Electrical labour 415000 -Equipment installa,on

EAC $3900.0 $4000.0 $5500.0

Actual Cost $3000.0 $1000.0 $4500.0

Actual Qty 100.0 20.0 90.0

Commitments $0.0 $1500.0 $500.0

Qty To Complete 30.0 50.0 0.0

UOM m3 Hr Hr

Cost To Complete $900.0 $1500.0 $500.0

Total

$13,400.0

$8,500.0

$2,000.0

$2,900.0

You can change work and/or cost to complete per cost element assigned to network ac,vity or WBS element

ePM Workbench: Automa2c Forecas2ng

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Easy Cost Plan

Copy Cost Plan to Cost Forecast

Cost Forecasts

Current Budget is Cost Plan

Initial CTC generated from cost plan

Project Actual Costs

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Time sheets
Person No.
101234 109243

Ac2vity Type
7000 7008

Actual Work
40 H 20 H

Price/H
$100 $100

Actual Costs
$4000.0 $2000.0

Project Monitoring & Forecas2ng

Before time confirmation

Before time confirmation

After time confirmation

CTC automatically reduced

Project Actual Costs

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Purchase Order
SubContracted Services

40 H x $150.0 = $6000.0

Project Monitoring & Forecas2ng

Before Purchase Order

Before PO created

After Purchase Order

After PO created CTC automatically reduced

ePM Workbench: Manual Forecas2ng

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Change Work and Cost To Complete manually

Project manger workbench: Excep2ons

Changed Cost Forecast produces exceptions: Budget Deficit = Budget EAC = - $9000.0

Process overview Step-by-step walkthrough Cost Element based cost forecast Opera2on based cost forecast

Forecas2ng: Network Opera2on based

Operation based Cost Forecasting

Ac2vity Descrip2on Cable Laying

Plan Qty 100.0

Actual Qty 50.0

EAC Qty 110.0

UOM Hr

Ac2vity Type EL01

Rate $50.0

Cost Element 610000

Qty To Complete 60.0

Cost Element 610000 - Electrical labour 62000 Plumbinglabour 65000 Project Manager Total

EAC $4500.0 $300.0 $500.0 $5300.0

Actual Cost $1500.0 $300.0 $500.0 $2300.0

Actual Qty 30.0 10.0 10.0

Commitments $0.0 0.0 0 $0.0

Qty To Complete 60.0 $0.0 $0.0

UOM m3 Hr Hr

Cost To Complete $3000.0 $0.0 $0.0 $3000.0

ePM Workbench: Automa2c Forecas2ng

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Easy Cost Plan

Copy Cost Plan to Cost Forecast

Cost Forecasts

Initial CTC generated from cost plan

Project Actual Costs

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Time sheets
Person No.
101456 109657

Ac2vity Type
7010 6110

Actual Work
20 H 20 H

Price/H
$120 $123

Actual Costs
$2400.0 $2460.0

Project Monitoring & Forecas2ng

Before time confirmation

Before time confirmation

After time confirmation

Work and Cost To Complete automatically reduced

Project Actual Costs

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Purchase Order
SubContracted Services

30 H x $150.0 = $4500.0

Project Monitoring & Forecas2ng

Before Purchase Order

Before PO created

After Purchase Order

After PO created CTC automatically reduced

ePM Workbench: Manual Forecas2ng

Ini2al planning Time sheets PO Commitment Cost Forecas2ng

Change Work and Cost To Complete manually

Project manger workbench: Excep2ons

Changed Cost Forecast produces exceptions: Budget Deficit = Budget EAC = - $14,540.0

Project Management: Execu2on

Execution

Estimating Planning Budgeting

. .

Effective Project Management

. .

Reporting Analysis Settlement

Forecasting

Monitoring

ePM Cost Forecast Report (integra2on with PS Info system)

NovecoePM Project Cost Forecas2ng

Project Costs Forecasts integrated with ECC in real ,me Automa,c reduc,on of Cost to Complete Automa,c recalcula,on of project Es,mated Cost at Comple,on Manual adjustment of Cost or Work To Complete on Network Ac,vity and WBS elements Cost Forecast distribu,on Workbench provides one central place for Project Manager to review KPIs, perform forecasts, execute analy,cal and drill down reports No modica,ons to SAP standard applica,ons No interfaces No z-tables to keep forecasts costs: all data read/wricen from/to SAP ECC.

Project Varia2on Management solu2ons

Varia2on Management process

Varia2on Project Total Accepted Status 301006 CS-00123 $5,000.0 $0.0 PENDING

Create varia,on

Es,mate varia,on costs

Assign to project elements (WBS, NWA)

Approve

Automa,cally update project forecasts and budget

Cost Element
630000 415000 550000 Variation PEND Variation APPR

Descrip2on
Labour Plant hire Equipment

Value
$1,000.0 $1,500.0 $2,500.0

BUDGET

CTC

CTC

BUDGET

EAC

EAC

AC

AC

VAR

VAR

Budget Varia2ons: Aect Budget and Forecas2ng

Varia2on documents

Status: CREATED

Status: APPROVED

Contingency

Contingency

Variation

EAC

Budget

CTC

EAC

Budget

CTC

Variation

Con2ngency Varia2ons: Aect Budget and Forecas2ng

Varia2on documents

Status: CREATED

Status: APPROVED

Contingency

Contingency

Variation

EAC

Budget

CTC

EAC

Budget

CTC

Variation

Varia2on

Costs

Plan varia,on costs using Easy Cost Planning format Enter Revenue Varia,on Assign varia,on cost line items to WBS or NWA (one varia,on can be assigned to many WBS or NWA within same project) Change status to Pending or Approved

Varia2ons integrated in Project Manager Workbench

Varia2on Drill down reports

ePM Cost Forecast Report (integra2on with PS Info system)

Project Cos2ng: cos2ng layers

Cost To Complete Actual Costs & Commitments

Project Variations:
Variations & Contingency

Cost Estimate

Variation created and approved Project Budgets updated automatically Projects Cost forecasts updated automatically Original Cost Plan not changed

Project Costing layers

Cost To Complete Cost Estimate Commitments

Actual Costs

Contingency

Variations

ePM Varia2on Management Advantages

Varia,on Costs and Revenues are integrated with project planning, budge,ng and forecas,ng Automa,c integra,on of varia,ons based on status change control Enable repor,ng of: Original Cost Plan, Current Budget, Varia,ons and Con,ngency etc. Varia,ons are Integrated with project manager workbench for easy tracking and repor,ng Varia,on and Con,ngency values are reported in SAP standard PS info system No modica,ons to SAP standard core applica,ons No z-tables to keep varia,on costs, all data read/wricen from/to SAP standard database.

Integrated Project Management

MM HR PM PS SD CO FI

Costs & Resource Forecas2ng

Varia2on Management

Project Manager Workbench

Integrated Project Management in SAP

ePM Project Manager Workbench

ePM highlights:
ePM applica,on is fully integrated with

standard SAP ECC

ePM enhances SAP standard

func,onality by providing comprehensive solu,ons for cost forecas,ng and project varia,on management Maintenance Project are integrated with PM/CS order cos,ng Es,mates, Budgets, Cost To Complete, Es,mated At Comple,on, Varia,ons of Costs and Revenue screen for project managers to review their project KPIs, perform forecas,ng, execute drill down reports etc. repor,ng and analysis

Cost Forecas,ng for Service and

Enables Management of Project

Present informa,on in one easy to read

Provides data layout for project e-PM is an add-on that does not modify

SAP standard core components and is fully integrated with BW, RPM for strategic planning and repor,ng.