Construction With PS

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Ptejett Noaogemeat |a Iag|aeet|ag 8 Ceasttett|ea (I8C) 1 C|optet 1

Iatte4ett|ea
With the R/3 System, SAP is setting new standards for standard software. Based
on advanced development technology, R/3 makes possible a high degree of inte-
gration between business management and data processing.
The individual components in the R/3 System are characterized by comprehen-
sive commercial functions which use the latest technology. Integration between
the applications and the logistic functions, accounting, and human resources guar-
antees fast and efficient processing of your business processes.
This information folder gives you an overview of the functions and processes in
the R/3 System designed to support your engineering and construction activities.
It is intended for decision-makers and personnel involved in choosing and imple-
menting software.
Fig. 1-1: Integration and Wide-Ranging Functions of Project Management in E&C
This folder is divided into the following parts:
K Functions
This part describes the individual functions in the R/3 Project System that
support your internal project planning and evaluation.
K Integration
This part shows you how the R/3 System supports you at all stages of your
project. The emphasis here is not on the individual functions, but on pro-
cesses and the integration with various areas of the R/3 System.
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1 Ptejett Noaogemeat |a Iag|aeet|ag 8 Ceasttett|ea (I8C)
Ces|re|||sj /ree
Controlling areas are the organizational units in a group which require their own
complete, self-contained cost accounting.
You can use one controlling area to conduct joint cost accounting for a number of
company codes.
|rel|| Ces|er
Profit centers divide your business up on a management basis. The basic aim of
profit center accounting is to present areas of the business as entities operating
independently in the market.
Ce:| Ces|er
A cost center is an organizational unit within a controlling area. It represents a
sharply delineated area within which costs arise. The delineation can be based on
functions, cost settlement techniques, physical location, or responsibility areas.
Cemjes Ceie
A company code is an organizational unit within a client for which a separate
balance sheet is drawn up. The balance sheets and profit and loss statements re-
quired by legislation are produced at company code level.
Ka:|se:: /ree
A business area is a sharply delineated activity or responsibility area in your busi-
ness. Internal balance sheets and profit and loss statements are drawn up for it.
|eatt|eas
Ptejett 0tgoa|tot|ea, Sttettetes, oa4 ket|et|tot|eas
At the beginning of each project, whether it involves developing a new product,
make-to-order engineering, or internal organization, you need to define and set
up the structures necessary to manage your project and incorporate them into
your existing enterprise organizations and processes.
The organizational units in the R/3 System are so flexible that you can use them to
depict very complex business structures.
Fig. 1-2: Organizational Structures in Accounting
C||es|
The client is the top-level organizational unit. It corresponds to, for example, a
group with a number of subsidiaries.
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Ptejett Noaogemeat |a Iag|aeet|ag 8 Ceasttett|ea (I8C) 1
Cej||e| |se:|mes| |rejrem
A capital investment program is a hierarchical structure for all the capital invest-
ment costs planned or budgeted in a business or group for a particular period. You
can use any structuring criteria you want - for example: organizational units re-
sponsible, reasons for the investment, and so on.
Fig. 1-3: Organizational Structures in Logistics
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The purchasing organization is an organizational unit which procures materials
or services for one or more plants and negotiates terms with suppliers.
|art|e:|sj reaj
The purchasing organization is divided into purchasing groups which are respon-
sible for particular purchasing activities.
|a|jmes| / |ast||ese|
|ete||es
A functional location is a place where technical tasks within the plant mainte-
nance system are performed. The term equipment refers to individual objects
requiring individual maintenance. Equipment is located in functional locations
for defined periods.
||es|
Plants are units within Logistics which divide the business as viewed from pro-
duction, procurement, maintenance, and material requirements. They manage their
own inventory and material requirements.
A plant can be a production site or simply adjacent locations with their own stock
of materials.
!e|s| \es|are
In the R/3 System, a joint venture is a combination of cost objects whose costs are
apportioned to partners. Joint ventures are normally carried out by one operator
who bears the expenditures incurred. Joint ventures are formed to keep the costs
for the operator and partners to a minimum.
!ar|:i|t||es Ceie
The jurisdiction code indicates the tax jurisdiction for the purpose of determining
tax rates in the United States. It defines the tax authority to which taxes should be
paid.
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Fig. 1-4: Organizational Structures in the Project System
What are the advantages of using SAP organizational structures?
K Complex group structures are depicted using flexible organizational units.
K R/3 organization integrates the Project System with Production, Control-
ling, and Human Resources.
'|ereje |ete||es
You can use storage locations to distinguish between material stocks within a plant.
The term storage location usual refers to the physical location of the stock.
#erl Ces|er
Work centers are a means of dividing a plant into organizational units which per-
form a particular service. Examples include machines and employees.
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Ptejett Sttettet|ag
Before you can run a project in its entirety, you must first describe the project goals
precisely and create a structure for the project activities to be carried out. A clear
project structure provides the basis for successful project planning, monitoring,
and control.
You create and manage your project structure in the R/3 Project System by means
of work breakdown structures (WBS) and networks. The WBS describes the indi-
vidual phases and functions of a project. You plan the processing itself in the net-
work. This contains the individual project tasks and the dependencies between
them in the form of activities and relationships.
Ptejett 0eI|a|t|ea
The project definition is a general description of the project you want to manage.
You use it to record the idea behind the project. The project definition is the frame-
work for all the objects you create in later project planning phases.
wetk Bteok4ewa Sttettete
The work breakdown structure (WBS) is the hierachical model of the tasks to be
performed in the project. It provides an overview of the project and:
K Forms the basis for project organization and coordination
K Shows the work, time, and money spent on a project.
The WBS is the operative basis for a wide range of further planning steps. You can
use it to plan dates and costs, and allocate budgets.
Fig. 1-5: Functions of the Work Breakdown Structure
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The individual tasks required to carry out the project are called work breakdown
structure elements (WBS elements). Depending on the project phase, you can
further breakdown the work with subordinate WBS elements.
Fig. 1-6: Example of a Work Breakdown Structure
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The network describes project processing. The essential elements comprising a
network are activities and relationships. Networks form the basis for planning,
analyzing, and monitoring time schedules, costs, and resources (such as person-
nel, machines, production resources/tools, and materials).
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Fig. 1-7: Network Functions
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You use activities in the network to plan your project staffing, capacity, material,
PRTs, and service requirements. You can add detail to your planning by using
subnetworks and activity elements. When you assign the activities to the WBS
elements, you then obtain the detailed view of costs, dates, and capacities at the
WBS level.
Fig. 1-8: Detailing the Work Breakdown Structure Activities
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You use different activity types, depending on which tasks you want to carry out
in the project.
For tasks that require capacity (machines or personnel) in your business, create
internally processed activities.
For tasks that involve outside contractors, create externally processed activities.
When you use such an activity, you create a link with purchasing by referencing a
purchasing info record. The purchasing info record contains prices and delivery
dates for external activities. The system automatically creates a purchase requisi-
tion based on the data in the purchasing info record.
If you want to plan costs without referencing other objects in the R/3 System, use
general costs activities. An example would be planning travel expenses.
You can use activity elements to plan your work in more detail. You can use one
or more elements of any type to achieve the level of detail you need.
You assign the material components to the appropriate activities to plan the mate-
rials you need to execute your project.
You can store as many texts and documents as you want for your projects. You use
R/3 text processing or Microsoft
Word for Windows to enter texts such as min-

utes of meetings, which you can then send to individual employees. You can man-
age your documents either in the Project System itself or using Document Man-
agement. You can also use Document Management to access documents whose
originals are not stored in the R/3 System. For example, you can display technical
drawings from a CAD system in the Project System.
Fig. 1-9: Network Structure
You can assign other things, such as tools or equipment, to activities by means of
production resources and tools (PRT).
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Ke|e||es:||j:
You use relationships to depict chronological and technical dependencies between
activities. The relationship you define determines the nature of the link between
the individual activities:
K FS relationship
An activity does not start until the preceding activity is completed.
K SS relationship
An activity cannot start unless another activity has started.
K FF relationship
An activity cannot be completed until another activity has been completed.
K SF relationship
An activity cannot be completed until the activity succeeding it has started.
You can use relationships to link activities in different networks. This means, for
example, that you can produce a time schedule for the whole project, regardless of
whether you are planning in an overall network or in individual networks.
Fig. 1-10: Relationships
rej||t:
You can use graphics to manage both work breakdown structures and networks.
The hierarchy graphic offers an overview of the project; the network graphic gives
you an overview of all the networks which are linked to each other with relation-
ships.
You can create the following print files for network and hierarchy graphics:
K GRANEDA Metafile for output on a plotter
K Postscript file for output on a laser printer
K File in HPGL format
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N||esteaes
Milestones are events within a project to which particular importance is attached
or which trigger a predefined function. In general, they indicate transitions bet-
ween different phases or departments. You can assign milestones to activities and
WBS elements.
In the Project System, milestones are used to:
K Trigger predefined functions in network activities
K Carry out earned value analysis
K Determine dates in the billing plan for sales orders
||e:|ese |ast||es:
|s Ne|werl:
You can use predefined milestone functions in networks to trigger a sequence of
steps. Examples include:
K Releasing activities
K Inclusion of standard networks
K Creating networks and subnetworks
K Triggering workflow tasks
||e:|ese: |s K||||sj ||es:
In customer projects, such as engineer-to-order production, the customer is usual-
ly billed for services as soon as particular project phases are completed. If mile-
stones represent individual phases within networks or WBS elements, you can use
them to create a billing plan. As soon as the milestone event occurs, the Project
System copies the actual milestone date into the billing plan, thereby making bill-
ing possible.
Fig. 1-11: Milestone Billing
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Stoa4ot4 Sttettetes oa4 emp|otes
Although every project is unique, it is often possible to standardize structures and
processes, in whole or in part, to use them again. You can use these templates to
keep a record of structures specific to your business and product; this can help
reduce routine work and product management in later projects. For examples you
only need to create a standard network once; you can then use it as a reference
model for creating new networks which have the same structure.
Fig. 1-12: Standard Structures in the Project System
'|esieri #K'
A standard work breakdown structure (standard WBS) can be used as a reference
for creating a new project or expanding an existing one. You can create a model
project in the form of a standard WBS so that the R/3 System can automatically
create a customer project with all the required objects and relationships when you
processing a customer inquiry, a quotation, or a sales order in Sales and Distribu-
tion.
'|esieri Ne|werl
A standard network acts as a template for creating new networks or for enlarging
existing ones.
'|esieri ||e:|ese
A standard milestone acts as a reference copy for creating new milestones in the
WBS or networks. You can combine a number of standard milestones to create a
group milestone in your network. An example would be to combine all milestones
relevant to earned value analysis.
'|esieri Iet|
You can store texts you need to use more than once; for example, to compile a
standard set of instructions. You can change standard texts whenever you want.
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Highlights
K You can continually expand and add detail to your data and structures,
starting with a rough plan and working towards a more detailed one.
K You can create work breakdown structures and networks quickly and eas-
ily using graphics.
K You can use standard structures to save time on routine tasks.
K You can use milestones to trigger workflow, copy dates into billing plans,
or identify important phases in your project.
|me St|e4e||ag
Time scheduling is based on the project structure. While the work breakdown struc-
ture (WBS) represents the structure of the project, you use activities to plan the
actual course of the project. This means that you first plan dates that are indepen-
dent of each other. You plan the dates manually in the WBS to create a first, rough
-cut schedule.
For more detailed planning, you create activities and relationships, stipulate sched-
uling constraints, and plan durations. As part of scheduling, the R/3 Project Sys-
tem automatically calculates the start and finish dates and the dates that materials
and PRTs will be required. You can then reconcile the dates calculated with those
maintained manually in the assigned WBS elements.
Fig. 1-13: Dates in the Work Breakdown Structure
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The Project System distinguishes between the following date types:
K Basic dates
Fixed dates which you enter manually in the network or WBS element. You
can use basic dates in scheduling as the framework for activity dates.
K Forecast dates
Expected dates which you enter manually in the network or WBS element.
You can use forecast dates to depict different scheduling situations. Exam-
ple: best or worst case scenarios.
K Scheduled dates
Dates calculated by the system as part of the scheduling or confirmation
processes.
K Actual dates
Dates reflecting the current state of the project. You usually enter them man-
ually in a confirmation, but can also have the system determine them from
internal activity allocations or confirmations.
K Scheduling constraints
Conditions for the start or finish date of an activity
I|me 't|eia||sj |s #erl
Kreeliews '|rat|are:
You plan the dates manually in the work breakdown structure. The system sup-
ports you with consistency check, date comparison, and date leveling tools. You
can plan basic and forecast dates on any level in the hierarchy.
Various time scheduling methods are available:
K In top-down planning, you plan dates starting from the top WBS element. All
dates planned in subordinate WBS elements must fall within the timespan of
the dates planned in the superior WBS element
K In bottom-up planning, you plan dates starting from the subordinate WBS
elements.
K In free planning, you can plan dates without any hierarchy dependencies and
on any level.
I|me 't|eia||sj
w||| /t|||||e:
The system automatically calculates activity dates as part of scheduling. The dates
are calculated on the basis of the planned activity duration. You can plan the dura-
tion manually or have the system use the required capacity, available capacity, or
terms of delivery data to calculate it for you. In addition, you can plan time de-
pendencies for activities in the form or relationships and constraints. For example,
you can stipulate that an activity must be completed by a particular date.
't|eia||sj
Forward and backwards scheduling are always carried out using activities and
relationships. They calculate the earliest start and latest finish dates for activity
execution. You can trigger scheduling from a network or WBS.
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Fig. 1-14: Scheduling results
't|eia||sj |s Ne|werl:
In network scheduling, the R/3 System determines the earliest and latest start and
finish dates for activities. The resulting data is used to calculate floats. Floats sup-
ply information on the time reserves available for carrying out individual activi-
ties. In evaluations use the floats highlight activities where time is critical.
If the dates calculated are outside the defined start-finish dates, you can use vari-
ous reduction strategies to cut activity duration.
Fig. 1-15: Determination of Basic Dates
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ere|| Ne|werl 't|eia||sj
If you have used relationships to link a number of networks, you can also use the
overall network scheduling facility whereby all the linked networks are sched-
uled together using one start date and one finish date. The result is a consistent
schedule covering the whole network.
#K' 't|eia||sj
You schedule the project structure and all the activities assigned to it starting from
one WBS element, subhierarchy, or from the whole project. You can copy the re-
sulting dates to the basic or forecast dates for the assigned activity and can use
them as the basis for new WBS scheduling.
Ke:t|eia||sj w|||
/t|ae| 9e|e:
Rescheduling may also be necessary if you already have made confirmations for
activities - that is, if execution has already begun. Scheduling can start either from
the actual finish date or from todays date.
Ces|re|||sj
The Project Information System will help you control your schedules effectively.
You can compare the planned dates with the actual dates or the expected date of
completion. Statistics give you a quick overview of variances from the schedule
due to, for example, late starts or delays during processing. In addition, you can
display data according to different criteria - for example, you might want to see all
the activities which are running late. This way, you can spot delays early and take
corrective action.
You can use project versions to record how the dates in your project have devel-
oped, starting with those originally planned through intermediate stages to the
current dates.
Highlights
K Purchase orders and reservations in purchasing are triggered automati-
cally from scheduling.
K The interactive graphical planning board in R/3 makes schedule planning
and leveling easier.
K Planning work is reduced thanks to the automatic adjustment of planning
in the event of dates being revised.
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keseette P|oaa|ag
To execute your project, you will need to call on various resources. In addition to
materials and funds, the availability and optimal use of capacities (personnel, pro-
duction, and assembly capacity) is another factor in the success of a project. Plan-
ning, procuring, and assigning these capacities is, therefore, and important step in
project management.
In the R/3 Project System, you can plan capacities in different levels of detail.
Fig. 1-16: Resources
#erl Ces|er:
The R/3 Project System uses work centers to represent the resources responsible
for executing an activity. A work center can depict a physical resource, such as an
employee in the engineering department or a machine in the production depart-
ment, or it can depict a summarization level. Examples of summarization levels
include development teams, design groups, cost centers, assembly areas, and de-
partments.
In the work center, you enter the available capacity and an operating time. You can
arrange the work centers in a hierarchy for capacity evaluation purposes. You can
then use the hierarchy to arrive at summarized evaluations, of available capacity
and capacity requirements for, say, a department or group of employees.
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Fig. 1-17: Available Capacity and Capacity Requirements
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Capacity planning involves planning the work to be carried out in a work center;
you use an activity to do the actual planning. You can define your own formulas to
calculate the capacity load (capacity requirement). You can view the capacity load
immediately in the capacity evaluations.
Cejet|| |e|ae||es:
By comparing the available capacity in the work center with the capacity require-
ment in the activity, you can calculate the capacity load. With high-performance
capacity reports, you can identify any capacity overloads early.
The evaluation can be from various viewpoints:
K Cross-project
K Period-related
K Work center-related
K Network-related
You can obtain an overview of all the projects which call on a resource at any time;
this will help you decide what capacity-leveling action is necessary.
You can configure the capacity evaluations and compile graphical representations
as you wish. If you need to further tailor your evaluations, you can copy the data
to external PC programs.
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Fig. 1-18: Graphical Representation of the Capacity Situation
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The aim of capacity leveling is the best possible scheduling and use of available
resources. The capacity planning table includes tabular and graphical tools you
can use to do this. Both planning tables supply you with all the information you
need for capacity leveling. For example, if the capacity situation indicates that
some activities need to be postponed, you can immediately find out to which project
an activity belongs or whether the activity is high priority. You can use the project
planning board to simulate the effect of any change you make on all other resourc-
es your project calls on.
The graphical planning table is so flexible that you can display the data in any
way which meets your needs.
Fig. 1-19: The Graphical Capacity Planning Table
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More detailed planning is often necessary, particularly of human resources. To
this end, you can distribute the work planned in summary at work center level to
individual employees at employee level. Work distribution at employee level of-
fers two views of your employees:
K Work center-related view
View for the work center manager who can use it to ensure cross-project
availability of personnel.
K Project-related view
View for the project manager who can use it to ensure personnel availability
on his or her project.
There is an easy-to-use interface where you can determine which employee is
working on an activity at a particular time. The activity dates planned in schedul-
ing form the framework for this planning.
As in the capacity evaluation, you can plan across projects here too. When you are
distributing work at employee level, the work schedule maintained in Human
Resources (HR) is available as well as the available work center capacity. This
means, for example, that you can check, at any time, whether another assignment
will exceed the work time planned for an employee.
Fig. 1-20: Work Distribution at Employee Level
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Activities need to be carried out by suitably qualified personnel. You use the qual-
ification profiles to stipulate the qualifications required and which personnel have
them. The R/3 System can then use the qualification profile to determine which
employees are most suitable for particular activities.
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CeaI|tmot|ea oa4 |me ketet4|ag
Another important step in project execution is entering actual times. You can only
find the answers to the following questions if you have access to up-to-date, reli-
able actual values for your project:
K Is the project running on schedule?
K Are delays likely?
K Is there enough available capacity enough to continue processing the activity?
You enter actual values in the form of confirmations. As with planning, you can
enter the confirmations on an employee-related basis.
Fig. 1-21: Features of completion confirmation
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The time sheet is a convenient and flexible way of entering actual data for the
Project System. You can also use this universal, easy-to-use interface to enter data
for the following applications:
K Controlling (CO), internal activity allocations
K Human Resources (HR), attendance and absences
K Materials Management (MM), service confirmations
K Plant Maintenance (PM), confirmations to plant maintenance orders
K Service Management (SM.), confirmations to service orders
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Fig. 1-22: Time-Recording Sheet Example
You can format the time sheet yourself per your requirements. There is also an
integrated approval process for approving the data entered.
|ee| el Cesl|rme||es:
You can evaluate all the activities still requiring confirmation in the information
system and combine them in a pool of confirmations. You can then select individ-
ual activities from this pool and send reminders about the confirmations to those
responsible for the activities.
|ete| Cesl|rme||es:
You can copy confirmations entered locally from a Microsoft Access database into
the Project System. This procedure is useful if certain employees have no direct
access to the R/3 System and enter their time records locally, for example on a
laptop.
Ce||et||e esi |si||iae|
Cesl|rme||es:
If you only want to work with the Project System, you enter actual data using
collective or individual confirmations. You use collective confirmations to con-
firm the completion of more than one activity at a time. This form of confirmation
is useful if, for example, your organization enters all its confirmations centrally.
|s|rese| Cesl|rme||es:
You can also enter confirmations using the Intranet. You do not need any knowl-
edge of R/3 to enter the actual times. The only thing you do need is a PC with an
up-to-date Web browser.
Highlights
K Multi-project planning in concurrent project is assured because the call on
resources from other areas, such as production planning or production con-
trol, is taken into account.
K Capacity evaluations take account of cross-application requirements and
availability.
K Activities can be assigned at employee level, taking account of qualifica-
tions.
K The interactive graphical planning table in R/3 makes capacity leveling
easier.
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Cest Ceatte|||ag
Unlike dates and resources, which you can change directly, costs are usually cal-
culated from valuation methods or agreed prices for internal and external materi-
als and services. Accordingly, costs in the R/3 Project System are automatically
calculated wherever a price and/or quantity structure exists. In the process, the
system takes account of the dates of the planned project activities by assigning the
planned costs calculated to the appropriate periods. Alternatively, you can enter
planned costs manually.
Fig. 1-23: Forms of Ccost Planning in the Project
Ce:|: lrem |s|erse| /t|||||e:
Typically, internal activities are planned in the Project System as work in internal-
ly processed activities for the project. To this end, you stipulate the work center at
which the activity is to be carried out. The system uses the information stored in
the work center (such as cost centers and activity types) to determine the prices of
one unit of activity and, using that as a base, to calculate the appropriate plan
costs. You can shape the relationship between the work planned and the activity
units required to achieve it.
When you enter a confirmation for the activity, the system calculates the actual
costs and allocates them directly to the project.
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Ce:|: lrem |t|erse|
|retaremes|
You plan external activities, such as services, using externally processed activities.
Material procurement is represented using material components. In both cases,
you can copy procurement conditions, such as prices, discounts, and so on, from a
purchasing info record. The system automatically uses this information to calcu-
late the relevant planned costs.
In the case of large-scale procurement, you can define the expected invoice receipt
dates as an invoicing plan for the activity or material component. The planned
costs from the invoicing plan are updated to the project periodically.
You can trigger a purchase requisition and the subsequent purchase order directly
from the activity or material component. When the relevant goods and invoices
are received, the system automatically reduces the purchase order commitment
accordingly and writes the actual costs to the activity.
Ce:|: lrem U:e el
'|etl e|er|e|:
You use material components to plan stock material usage for an activity. The
system calculates the plan costs by taking account of material stock valuation.
When you later draw the materials, the system automatically charges the actual
costs to the appropriate activity.
Ce:|: lrem /::|jsei rier:
You can have the system automatically display costs from production orders, cal-
culated using either planned orders or manual order assignment. This applies to
orders from Controlling (CO), Service Management (SM), and Plant Maintenance
(PM).
Iree| |tjes:e:, |s:areste,
esi ||er Ce:|:
You can plan other costs, such as travel expenses and insurance, as general costs
activities in the project. You enter the cost element, amount, and currency in the
activity; it is then taken as the cost plan value. You can assign the actual docu-
ments directly to the activity; this generates the appropriate actual costs in the
system.
Fig. 1-24: Cost Planning for Projects
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It is possible to enter actual costs which have not been planned or which do not
reference any planning. So, for example, in Controlling, you can make an internal
activity allocation directly for an activity in your project. This ensures that the
actual costs are recorded correctly.
esae| Ce:| ||ess|sj
In addition to automatic planned costing of activities, the R/3 System supports
manual cost planning in the WBS elements themselves. The following planning
options are available:
K Detailed planning per cost element and period
K Rough-cut planning per year
K Planning over the whole timeframe of the project
This manual form of planning enables you, for example, to enter initial rough
estimates of the costs as a separate plan version or to plan the costs for subprojects
which have no quantity structure.
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You use overhead to allocate overhead cost portions to cost centers. When calcu-
lating the project planned costs automatically, the system takes account of the sur-
charge rates you have stipulated.
In manual cost planning, you can calculate planned overhead for one or more of
your projects at any time. Actual overhead is allocated directly to the relevant cost
centers as part of period-end closing. Overhead can also be included in commit-
ment values.
/t||||-Ke:ei Ce:|:
While overhead is distributed flat rate, activity-based costing assigns overhead
according to what caused it. You stipulate the cost rates for the activities you have
defined in Activity-Based Costing. Both planned and actual costs are allocated
using a process template. You can plan the activity utilization and enter actual
values manually. The relevant cost centers are credited using the activities.
'e|||emes|
As a rule, projects are used to collect and monitor costs, but are not usually the
final cost object. For this reason, the costs in a typical project will be settled at the
end of a period. To this end, you store settlement rules in the activity/WBS ele-
ment requiring settlement. Settlement rules contain information on settlement re-
ceivers, cost apportionment, and control data.
Examples of settlement receivers include:
K Cost centers, such as internal sold-to parties
K Market segments, as part of profitability analysis; for example, sales region
(division) and product group affected by a marketing campaign
K Asset master records or assets under construction (capital investment projects)
K General ledger accounts
K Higher level WBS elements, used to summarize data as appropriate before
transferring it to Asset Management
You can vary the detail for the data to be settled, ranging from an overall settle-
ment to manual line-item processing. You can also define one or more settlement
cost elements or stick with the original cost elements. The cost information is still
available in the project after you have settled the costs.
I-Z
I|e Kaije| e: Ce:|
|remewerl
You will often have an approved project cost framework at your disposal. In the
R/3 System, you can plan this as your project budget and distribute it top-down
through the WBS. It is possible to allocate overall and annual budgets in parallel.
In the process, the system verifies that the total of the annual budgets is less than
the overall budget. You can either allocate the project budget within the project
itself or can link it up to the general budgeting in your organization by assigning
it to items in the capital investment program. Budget supplements, returns, and
transfers are also available. A budget release facility makes a two-step budget
approval procedure possible. The system automatically checks budget releases
against the distributable budget figure.
/t||e /e||e||||| Ces|re|
You can monitor your budget in two ways: passively, using the reports in the in-
formation system, or with active availability control. In the latter case, the system
checks that the project budget has sufficient funds to meet the funds assignment
(such as a purchase order) which you are entering. If the budget is exceeded, the
system reacts according to the settings you have entered; the reaction ranges from
a mere warning, through dispatch of an electronic notification to the project man-
ager, to complete rejection of the business transaction.
You can set budget tolerance limits for each check. This way, the project manager
can be informed in good time of impending project funding problems, or budget
excesses can be tolerated up to a specified limit.
Fig. 1-25: Active Avalability Control
/t|ae| Ce:|: esi Ces|re|||sj
As the project is executed, actual costs are incurred, arising from, for example:
K Postings in Financial Accounting and Materials Management
K Activity confirmations
K Orders assigned to the project
I-Zt
To monitor and control actual costs and compare them with the planned values,
you need a comprehensive cost controlling system.
Effective cost controlling requires very different aspects and levels of detail. With
R/3, you can generate evaluations from the project managers viewpoint and eval-
uations showing the view from further down the line. The flexible database sys-
tem means you can choose individual valuations and display them in summa-
rized form.
Fig. 1-26: Commitments and Actual Costs for the Project
Highlights:
K Automatic cost calculation keeps planning work to a minimum.
K The Project System is comprehensively integrated with systems such as
Controlling (CO), Financial Accounting (FI), Production Planning (PP), and
Materials Management (MM).
K Cost planning is possible in any level of detail. Examples: rough estimates,
annual cost planning, planning at activity level.
K Active availability control monitors budget usage and availability.
K Cost planning is correct by period and date.
K The Project System is well integrated with Enterprise Controlling, ensur-
ing that the project agrees with Cost Center Accounting and profit and loss
accounting.
I-Zl
keveaee oa4 PteI|toh|||ty Ceatte|||ag
Comparison of costs and revenues and early assessment of project profitability
are particularly important in customer projects.
The system automatically copies the values for the customer quotation or sales
order into project revenue planning. If you have created a billing plan, the dates
are taken into account as revenue is recorded. The revenue plan shows discounts,
volume-based rebates, and other sales deductions in detail. You can create the
billing plan in relation to a sales document or directly in the project. In milestone
billing, the system automatically adjusts revenue planning to reflect any changes
in schedule.
You can enter planned revenues for your project directly per revenue element and
period.
/t|ae| Keesae:
Every time a sales order is billed, the revenues are automatically recorded in the
assigned project. The integrated processing ensures that internal cost and revenue
accounting always agrees with external profit and loss accounting.
|rel||e||||| |erete:|
The profitability forecast considers the effect a project will have on the income
statement and balance sheet in the future. The Project System includes a profit-
ability forecast for customer projects. For each project, the system calculates how
key figures such as cost of sales or work in process are expected to develop over
time. This calculation is based on, for example, the expected revenue, the billing
plan, and/or the expected progress in the percentage of completion.
/t|ae| |rel||e|||||
Ce|ta|e||es
The actual operating results is usually calculated as part of period-end closing.
The system supports all the usual methods of calculation, such as percentage of
completion based on actual costs or a degree of completion calculated automati-
cally. You can use different versions to compare different possible results.
|er|ei-|si C|e:|sj
As part of period-end closing, you copy the actual result for each project to Con-
trolling. When you post, for example, cost of sales in the income statement or
work in process in the balance sheet, the appropriate values are recorded in Prof-
itability Analysis. This ensures that internal and external accounting agree. If re-
quired, you can transfer a separate profitability analysis version to Profit Center
Accounting. For example if you need to know whether there is an internal fixed
price agreement for subprojects.
I-Z&
Fig. 1-27: Valuation Methods
Highlights:
K Revenue planning automatically takes account of schedule changes.
K Reliable forecasts of the expected profits and losses are available during
the quotation and execution phases.
K Project values are automatically copied to area controlling, meaning that
the project manager and controller do not have to worry about these rou-
tine tasks.
K You can display cost of sales and work in process at project level.
K The process is integrated with project profitability accounting.
I-Z7
Ptejett IaIetmot|ea System
A project is a complex undertaking, bringing with it large amounts of different
types of data. The various members of the project team need to be able to view this
data from different viewpoints, presented in a clear, comprehensive format so that
they can analyze it as necessary.
The Project Information System is an efficient tool for flexible data evaluation and
display. It helps you achieve efficient schedule control and provides detailed con-
trolling views from various financial angles. In addition to reports covering ev-
erything from multiple projects to single documents, it includes a wide range of
reports on structures, dates, costs, resources, and capacities.
The wide range of information available in the Project Information System means
that all those working in the project can obtain the information they require, pro-
vided they are suitably authorized.
Fig. 1-28: Controlling Levels
9e|e Ke:|:
The following are available as the data basis for the information system:
K Current project data
K Project version data
K Archived data
Project version data records the state of the project at a particular point in time.
You can compare versions with each other or with the current data, to determine
what has changed and how the project has progressed.
I-JJ
\|ew:
The data you want to evaluate in the information system can be arranged in vari-
ous hierarchical views. The view likely to be most relevant is the project view
which shows the dates in the project structure. You can also evaluate your data
from, for example, organizational, authorization, or budgeting viewpoints.
'e|et||es
You can use data selection to restrict the display to only that data which interests
you.
Ce|||sj Uj Kejer|:
The reports are arranged in a hierarchical report selection, called the report tree,
which gives you a clear view of the wide range of reports available and makes
accessing them up easier. You can define your own report trees to complement the
standard one. Your new report tree can contain standard reports and reports you
defined yourself.
If you are already in a report and want to analyze some of it in more detail, you
can access additional reports directly.
Fig. 1-29: Information System
'|rat|are esi 9e|e
Ces|re|||sj
If you are interested in the hierarchical structure of your projects, require informa-
tion on dates and durations for their individual parts, or if your projects commu-
nicate with external programs, the structure report is a powerful tool. You can
select from a wide range of information and branch from the structure report to
any other report in the information system or to the transactions for maintaining
objects relevant to the Project System. You can also display all the data in graphical
form.
I-JI
Fig. 1-30: Project Schedule Report in the Information System
Cemmert|e| Ces|re|||sj
The reports in the costs/revenues/finances information system contain informa-
tion on the value flows in projects. Access these reports to obtain a detailed over-
view of the costs, revenues, and cash flow of your projects. If you need more de-
tails concerning any particular part of your project, you can branch from the re-
ports to line item level and to individual documents. If the project is a multina-
tional one, you can monitor the value flow in any currency you want.
Fig. 1-31: Cost Reports
I-JZ
|e|ae||sj Ke:earte:
Reports are available which you can use to evaluate required resources. Among
other things, resource reports evaluate:
K Work center capacity availability and load
K Materials required in a project and their availability
K Project purchase requisitions and purchase orders
Different views are also available in these reports. For example, you can use the
order report to obtain an overview on the state of production and procurement for
components and materials required in a sales order.
a|||-|rejet| Ces|re|||sj
You can use all the reports to obtain cross-project evaluations. In the case of classi-
fied projects, you can evaluate commercial data in summarized form in hierar-
chies. By evaluating the reports per the various hierarchies, project managers can
view resources, costs, and dates as seen from, for example, profit centers. You
define the classification criteria yourself.
Fig. 1-32: Project Summarization
Ca:|emer-'jet|l|t
|e|ae||es:
Projects are so multifaceted that it is impossible to predict all the evaluations which
project users will need. You may, therefore, need to create reports the standard
system does not contain.
The information system offers a wide range of options you can use to define and
format your own reports. No programming experience is necessary. You can pro-
duce your own reports by copying and adapting existing ones, or by piecing to-
gether reports using report components.
I-JJ
6top||ts
Graphics are essential for evaluating the many different types of information in
projects and representing them clearly. The Project Information System includes
the following graphic functions:
K Project structure and hierarchy graphic
K Network graphic
K Gantt chart
K Portfolio graphic
K SAP Presentation Graphic
You can use SAP Office to send the individual graphics, save them as files, and
print them in various formats.
Fig. 1-33: Graphical Evaluations
|rejet| '|rat|are rej||t esi
h|erert| rej||t
These graphics give you an overview of the hierarchical organization of your
projects. The project structure graphic reproduces the structure of a project in the
project hierarchy. In the hierarchy graphic, you can evaluate your project per alter-
native hierarchies, for example the cost center or profit center hierarchies.
I-Ji
Ne|werl rej||t
Unlike the hierarchy graphics, the network graphic reproduces the technical view
of your project. You obtain an overview of the logical connections between the
activities in a network and, therefore, on the progress of your project over time.
Fig. 1-34: Network Structure Graphic
es|| C|er|
Gantt chart techniques are used for the capacity planning table and the project
planning board. The customizing for both planning boards is very flexible so that
you can adapt the display to your individual wishes.
You can use the capacity planning table to schedule your activities in work cen-
ters and obtain an overview of work center loads.
The project planning board supports integrated project management. In the project
planning board, you can:
K Obtain an overview of the hierarchy of your project and of its progress over
time
K Display and change the organizational structure within your project
K Access all the important data in your project:
H Costs/revenues
H Dates
H Durations
H Work
H Resources
H Assignments
K Simulate changes and see the effects instantly in the project planning board.
K Branch to the project structure graphic, hierarchy graphic, capacity planning
table, and the information system
I-J
Fig. 1-35: Project Planning Board
|er|le||e rej||t
In the portfolio graphic, you can use the key figures to obtain an overview of your
projects, subprojects, or networks. You can display the weighted key figures of
more than one object simultaneously, meaning that you can identify trends early.
'/| |re:es|e||es rej||t:
The system includes two-and three-dimensional histograms, line graphs, and pie
charts. There are also various options, such as ABC analysis, available for classify-
ing your objects.
Highlights:
K You can evaluate costs, schedules, and finances in a single information sys-
tem.
K You can choose any level of detail and summation you want.
K You can create evaluations and reports which meet your companys indi-
vidual needs.
K A range of graphic functions ensure that the data is clearly presented.
K You can summarize information on a project-specific basis and an organi-
zation-specific basis.
K You can transfer data to external systems so that it can be planned at local
level. You can also analyze it in different views.
K You can monitor more than one project at a time.
I-Jt
Ptegtess kepett|ag
Ptejett ets|eas
As a project progresses, changes often occur which are not reflected in the opera-
tive project structures. If these changes are important to you, or if you want to be
able to identify trends in your project, it is a good idea to work with project ver-
sions. Project versions document the state of a project, as of a:
K Particular point in time
K Particular status, such as released
In the information system, you can compare current project data with as many
project versions as you wish.
Iotae4 o|ee kao|ys|s
Successful project management involves more than keeping an eye on costs, reve-
nues, and schedules. These values can only shed light on the progress of the project
and its current state when viewed in conjunction with the activities actually car-
ried out.
The earned value analysis supports this. It is suitable for both internal progress
monitoring and activity confirmations to ordering parties.
You can estimate degrees of completion for WBS elements, activities, and activity
elements or can use information already in the system to calculate them, accord-
ing to particular rules. You can use suitable weighting, for example, planned costs,
to summarize these values in the project structure. You can then use the data so
determined to calculate balances and provisions in profitability analysis.
The earned value is calculated using a weight, such as planned costs, and the
percentage of completion. In addition, you can define current key figures and vari-
ances which allow objective progress and status control. You can view trends in
the earned value in the graphic progress display and in the portfolio graphic. You
can access both operational data and project versions.
ee:aremes| Iet|s|ae:
Measurement techniques determine how the percentage of completion is calculat-
ed. The R/3 Project System offers the following measurement techniques:
K Start-Finish rule (with any combination of start/finish values you want)
K Milestone technique
K Estimation
K Degree of processing (using activity confirmations)
K Time proportionality
K Quantity proportionality
K Secondary proportionality
I-Jl
Fig. 1-36: Earned Value Analysis
C|oss|I|tot|ea oa4 Semmot|tot|ea
In classification, you attach values to characteristics used to describe and distin-
guish between WBS elements and networks. You can incorporate the characteris-
tics into hierarchy structures you define yourself. You can then use the hierarchies
to summarize the data and analyze the cumulative values for each hierarchy node
in the information system.
wetkI|ew
Projects are characterized by complex internal and external communications struc-
tures because, as a rule, several departments are involved in processing them.
However, these departments need to work together as a project team to achieve
the project goals. Externally, both customers and suppliers of goods/services need
to be included in project processes, along with, in some cases, government agen-
cies. Customer requirements, including changes, also need to be taken into ac-
count during project processing.
What all this means is that people working on the project are confronted with a
situation which is constantly changing. The workflow is an R/3 tool which you
can use to control planning and execution processes during the project, thereby
making them as effective as possible.
You can use workflows to depict processes as a series of tasks. The project staff
(individual employees, departments, organizational units) are notified of ongo-
ing changes by means of electronic messages. You can have such workflow pro-
cesses triggered by status or, for example, by schedule changes. Automated pro-
cesses help keep any delay caused by schedule changes to a minimum. Substitu-
tion rules are available to enable other employees to carry out vital project activi-
ties if the employee who normally processes them is ill or on vacation. You can use
deadlines to ensure schedules are kept.
I-J&
Workflows can be triggered in a number of different ways:
K Status-dependent
You can stipulate that certain changes in the project status, such as the
project release, can trigger workflow processes.
K Milestone-dependent
Workflows are triggered when a milestone is reached.
You can define your own workflows.
Fig. 1-37: Workflow
#erll|ew |rete::e:
|s ||e '|esieri
The standard system contains the following workflow processes:
K Configuration
You can create the basic project structures for the departments which need
them by creating a customer quotation or sales order in sales and distribu-
tion. Changes in sales and distribution are immediately reflected in the
project structures, and vice versa.
K Purchasing
If changes are made to purchase requisitions or purchase orders triggered
from a project, the purchasing department is automatically notified of the
changes. You can access purchase order processing directly from your SAP
office inbox.
K Budget monitoring
The project manager is informed of any imminent or actual budget over-
runs. The manager has instant access to all relevant information on costs.
I-J7
K Communication
From the project planning board and information system, you can send eval-
uations to individual employees or to distribution lists. You can also attach
certain attributes to documents sent this way. Examples include Reply re-
quired, ToDo, and Blind copy.
K Confirmation
You can use Workflow to request confirmations that occur periodically (for
example, weekly). If the actual work or confirmated duration exceeds the
planned values, the system notifies the project manager. He or she can then
determine which project activity is effected and who entered the relevant
confirmation.
K Billing
When a milestone is reached, the lock on billing is lifted. You can then gener-
ate billing documents.
IatetIotes
The functionality in the R/3 System is complemented by:
K Intranet
K Flexible interfaces with external systems
K Various customer-specific enhancement options.
Fig. 1-38: Interfaces
I-iJ
Iattoaet
You can use the Java GUI instead of the regular SAP R/3 GUI to call up transac-
tions and reports in the R/3 System. In addition, Intranet Application Compo-
nents (IAC) allow you to adapt the screens without modifying the R/3 System.
Cesl|rme||es: |s ||e |s|rese|
You can enter confirmations directly in the Intranet. You can adapt the confirma-
tion screen in the Intranet without having to modify the R/3 System. For example,
you can hide data fields you do not need, insert a company logo, or implement
additional functions.
9etames|: |s ||e |s|rese|
Viewing documents assigned to the project structure using the Intranet is also a
convenient and easy-to-use function, giving you an overview of product related
documents or enabling you to focus quickly on a specific drawing.
IatetIotes w|t| Ixtetao| SeItwote
There are various interfaces you can use to edit and display Project System data at
local level.
|tjer| esi |mjer|
K Interface to external project management systems (PS-EPS)
|tjer|
K XXL Listviewer
K Interface to GRANEDA ( Netronic)
K Microsoft
project (MPX) interface

|s|erlete w||| |t|erse|
|rejet| esejemes|
':|em: (|'-||'}
You can use the PS-EPS interface to:
K Export data to external programs for further processing
K Import data to the Project System after further processing
K Import data into the Project System which was originally processed using oth-
er project management programs
K Trigger functions such as confirmations or capacity availability checks from
outside the R/3 System
The data exchange using PS-EPS can take place online using:
K Remote Function Call (RFC)
K Object Link Enabling (OLE)
K OLE Custom Control (OCX)
Alternatively, you can use ASCII files to carry out the exchange offline.
The external program can prescribe the scope of the data transferred. Data im-
ported or changed using these functions is subject to the same checks as data en-
tered online. This ensures that all data in the R/3 System is consistent.
Any data which can be displayed in the Project Information System can also be
exported to the XXL Listviewer.
I-iI
You can use the XXL Listviewer to display data from the Project System and pro-
cess it further in spreadsheet programs such as Microsoft
Excel or Lotus
1-2-3.
There are other things you can do with the XXL Listviewer, including:
K Sort and restructure data
K Manage objects and views
K Display data in graphics
K Compile and manage visual presentations
|s|erlete |e K/N|9/
(
Ne|res|t}
You can export data from the Project System to GRANEDA where you can then
print the data on a printer or plotter. GRANEDA offers a wide range of configura-
tion options for the output of graphics.
|l |s|erlete
You can use files in MPX format to export data from the Project System to Mi-
crosoft Project or other project management programs.
CestemetSpet|I|t k4optot|eas
||e|i 'e|et||es
In the Project System, you can stipulate how various fields are displayed on the
screen. The options are:
K Ready for input
K Input required
K Display only
Ie||e Ces|re|
The R/3 System includes a facility for arranging the fields in lists according to
your requirements. Then, when you work with these lists, you see exactly the
values you need for your work. An example in the Project System is the activity
overview for networks.
U:er-9el|sei ||e|i:
In addition to the master data fields with fixed definitions, the system contains
user-defined values whose meaning you determine. The following objects include
user-defined fields:
K WBS element
K Network header
K Network activity
Ca:|emer |s|estemes|:
You can add functions to the standard functions or modify existing functions. To
do this, you must incorporate function modules you write yourself at points de-
fined by SAP in the standard transactions. More than 20 customer enhancements
are delivered with the R/3 Project System. The following are possible:
K Additional customer-specific fields
K Derive network number from WBS element number
K Additional processing steps before a network is saved; for example: docu-
ment changes
K Bill of material explosion, including copying BOM items from external sys-
tems and processing material components in networks
I-iZ
K Customer-specific special features in overhead calculation, interest result cal-
culation, and resource-related billing
K Customer-specific hierarchy in the Project Information System
K Change selection data in cost reports
K Authorization check
\e||ie||es esi 'a|:|||a||es
To ensure that your data is consistent, you can check values and value entries per
particular criteria and replace them where required. To this end, you will need to
define your own Boolean rules.

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