PS FUNctions in Detail

Functions in Detail
SAP Project System
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Contents
Contents
Introduction
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The Project System: An Integral Part of

mySAP Product Lifecycle Management
Efficient Economic Flexible: Project Management with the Project System
Project and Project Management Definition and Clarification of Concepts
An Overview of the Project System
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The Internet Strategy of SAP AG

mySAP Workplace - The Gateway to a World of Information
mySAP Collaborative Business Scenarios
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Functions in Detail
Organizational Structures
Structures
Project Definition
Work Breakdown Structure
Network and Activities
Milestones
Templates
Simulations
Editing Tools
Project Builder
Project Planning Board
Documents
Project-Oriented Material Management
Material Planning for Projects
Internal Production
External Procurement
Monitoring Dates
Delivery
Project-Driven Procurement and Production Management (PROMAN)
Services and Projects
Capacities and Personnel Resources
Capacity Evaluation and Leveling
Claim Management
Cost Controlling
Planning Forms
Budget Management
Actual Costs, Commitments, and Cost Forecast
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Contents
Calculating Sales Prices

Revenues and Earnings
Forms of Planning
Project-Related Incoming Orders
Actual Revenues
Cash Management
Cash Flow
Interest Calculation
Periodic Processing and Project Closing
Schedule Manager Your Tool for Period-End Closing
Periodic Tasks
Project Settlement
Project Progress
Date Planning
Scheduling
Confirmation
Progress Analysis
Milestone Trend Analysis (MTA)
Project Information System
Business Information Warehouse
Interfaces
Business Application Programming Interface (BAPI)
Open Project System (Open PS)
How Does the Project System Help You
Maintain Your Data on a Daily Basis?
Mass Change
Validation and Substitution
Data Archiving
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Introduction
Introduction
The Project System:
An Integral Part of mySAP Product Lifecycle Management
Rapid developments in Internet applications present an ever-increasing
challenge for todays businesses. Factors such as globalization, outsourcing, and
customer orientation are more important than ever. Success will only be
achieved by those companies who can develop effective strategies to handle and
respond to trends faster than the competition. E-business solutions enable
communication and collaboration with customers, partners, and products. These
types of synergies enable flexibility and provide the basis for successful and
innovative management.
SAP has realized this vision with mySAP Product Lifecycle Management
(mySAP PLM). mySAP PLM is a key functional area of the mySAP.com
e-business platform. It enables you to manage your products as part of a complete product life cycle. In other words, you can monitor all aspects of your
products through all of the phases it undergoes from design through procurement, production, and sales, to service. In this way, cooperation with customers and partners is supported completely. mySAP PLM embraces the following
six areas, uniting them to form a comprehensive, uniform solution:
Asset Life Cycle Management

Lifecycle Data Management
Program and Project Management
Lifecycle Collaboration
Quality Management
Environment, Health and Safety (EH&S)
Program Management enables you to control the entire development process of

your products, and the Project System is a complete project management solution
in Program Management. You use the Project System to efficiently manage project
structures, dates, costs, and resources. The project controlling functions, as well
as the link to mySAP Business Warehouse (mySAP BW), allow you to consolidate
controlling data on an enterprise-wide basis throughout your entire project lifecycle, supporting both progress and profitability analysis. Program Management
is integrated with Strategic Enterprise Management (SEM), providing portfolio
management solutions to support your business planning processes.
For more information on mySAP PLM and its key functional areas and capabilities, see the PLM homepage on SAPnet at http://sapnet.sap.com/plm.
1-1
Introduction
Efficient Economic Flexible: Project Management with the

Project System
Managing projects successfully goal-oriented, cost-effective planning, control,
and execution of fundamental plans. With this as a backdrop, professional Project
Management becomes one of the most important factors influencing a companys competitiveness. This is particularly true of companies whose success is
determined from project-oriented business processes.
Your companys success also depends on employing the right methods, plus
motivating the employees who apply these methods. The effectiveness of the technical systems, combined with the motivation of the employees entrusted with the
use and application of appropriate project technology, correlates directly to the
quality and success of your project management.
The enormous capability of the Project System derives from a number of factors
such as its comprehensive functionality or its consistent approach for carrying
out projects in an integrated process, for example. However, these factors merely
form the basis of a software solution that, with your input, can be adapted to suit
your needs and requirements.
The fast-pace of the Internet environment provides enormous opportunities and
presents us all with new challenges. By using the Internet or your company
intranet, you can improve the efficiency of communication in many areas of
your company and, at the same time, streamline the information flow. In this
informative brochure on the Project System, therefore, we have also taken into
account the significance and position of mySAP.com by including a separate
section on this topic.
In the following pages, we will clearly demonstrate how you can use our software solution to manage multifaceted processes in your projects with even
greater success. Along the way, we will provide you with a comprehensive overview of the functions and processes of the Project System.
In the following document, keep in mind that we are addressing you in your role
as decision-maker, as well as any of your colleagues whom you have entrusted
with the selection and implementation of our solution.
The brochure is divided into the following sections:
Section One: Introduction
In this section, we present a brief overview of the capabilities of the Project System. We describe ways in which you can successfully use the software as well
as highlight the areas in your company in which you, as our customer, can efficiently and effectively implement our software solution.
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Introduction
Section 2: The Internet Strategy of SAP AG

This section provides you with information about SAPs Internet strategy the
mySAP.com e-business platform and its successful implementation in the
Project System.
Section 3: Functions in Detail
The main section of this brochure explains the most important functions of the
Project System. It describes how the software can be incorporated into your
companys specific structures and how it can optimally support company processes.
Project and Project Management Definition and Clarification of

Concepts
Defining a project clearly and precisely is of central importance for successful
project management. Without clarifying the concepts behind project requirements, you cannot achieve optimal benefits. An exact definition is, therefore,
one of the first steps towards optimum use of the Project System.
Project
When we use the term project, we refer to a combination of specific business
processes in an enterprise that can be described as a plan that is essentially
identified by the uniqueness of the conditions as a whole(DIN 69901, from the
GPM handbook: Successful Management of Projects, chapter 1.2, p.2). These
conditions include, for example, an objective, time, financial, personal and
other limits, disassociation from other plans [as well as] project-specific organization. (ibid.)
We can derive a series of characteristics from this relatively abstract definition
to define the concept of project more precisely:
A project:
Has a clear objective

Has time limits, with a defined start and finish
Is characterized by its uniqueness and novelty
Is complex and cannot be carried out without structural organization
Has a predefined task-related cost or budget framework
Is carried out within a project-related organization
Requires defined resources
Is carried out in an interdisciplinary fashion (cross-departmental collaboration and communication between specialists) (ibid., p. 3)
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Introduction
Project Management
While the term project can be defined, a definition of project management is
troublesome.
According to DIN 69901, project management is defined as all leadership tasks,
organization, techniques and methods for carrying out a project(ibid., p. 9).
While this definition is obviously based on a very narrow concept of management read leadership the concept of project management is often much
broader, particularly in English-speaking countries. In its Guide to the Project
Management Body of Knowledge, for example, the internationally recognized
Project Management Institute Standards Committee states:
The term project management is sometimes used to describe an organizational approach to the management of ongoing operations. This
approach, more properly called management by projects, treats many
aspects of ongoing operations as projects in order to apply project
management to them. (Project Management Institute (Ed.): A Guide
to the Project Management Body of Knowledge, Upper Darby: Project
Management Institute 1996, p. 6)
According to our understanding, however, modern project management cannot
simply be reduced to leadership tasks, nor interpreted however we choose. By
project management, we understand the structure and control of a socio-technical system that follows particular goals within a defined organizational framework (GPM Handbook, chapter 1.2, p. 11). In this process, the control of different individual activities in a project always takes place in relation to the superior project goal.
The statement from the Project Management Institute supplements this definition:
Project Management is the application of knowledge, skills, tools, and
techniques to project activities in order to meet or exceed stakeholder
needs and expectations from a project. Meeting or exceeding stakeholder
needs and expectations invariably involves balancing competing demands
among:
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Scope, time, cost, and equality
Stakeholders with differing needs and expectations
Identified requirements (needs) and unidentified requirements

(expectations). (Project Management Institute (Ed.):
A Guide to the Project Management Body of Knowledge, Upper
Darby: Project Management Institute 1996, p. 6)
Introduction
National and International Standards

Adherence to national and international standards is almost always a prerequisite for public bid invitations or it forms part of contracts concluded between
industrial companies. National and international standards are the basis for
cooperation between different parties in a project (for example, sold-to party,
contractor, or subcontractor). Standards provide the uniform theoretical background, which ensures that despite different procedures, approaches, and results are achieved that conform to the standards and correspond to the demands
of all participants.
International Standards
International standards with European or worldwide significance are not only
important for multinational projects, but also at a national level. International standards are often adopted by national standards institutions and, in this
way, also become valid at a national level.
Nevertheless, for the terms project and project management, there are currently no binding European or international standards. Despite intensified efforts at European level (Comit Europen de Normalisation CEN) and international level (International Organization for Standardization ISO), it has
not yet been possible to produce a comprehensive set of standards for project
management.
National Standards
Since the 1980s, industrial nations have followed their own definition and
tandardization plans in the area of project management. In German-speaking countries, diverse attempts have also been made in the last 30 years to
find exact definitions for the terms project and project management, The
majority of these attempts were part of a general push to put a halt to the
proliferation of concept variations that arose in the mid-sixties, as a result
of the different translations and interpretations of American (English) specialist terms in the area of network technology. Definitions were finally documented and published in 1970 under the auspices of the German Standards
Institute (DIN) in DIN 69900 Part 1 (Network Technology, Terms), Part 2
(Network Technology, Representation Technology) in 1974, and finally in
DIN 69901 (Project Management, Terms) at the end of 1980.
While the DIN 69901 to 69905 standards that were developed after the initial publications were still limited to German-speaking countries, the outline
for DIN 69906 (Logistics) had already been incorporated into the standards
plans of the ISO whose work is based on the internationally-recognized
standard work entitled Project Management Body of Knowledge (PMBOK).
SAP takes both international and national standards into account when developing products. Our products fulfill the appropriate authoritative standards and
contribute to their ongoing development.
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Introduction
An Overview of the Project System

The Project System, with its multifaceted functionality, supports your project
management in all phases of your business. The solutions provided by the
mySAP.com e-business platform support collaborative business processes, and
are backed by cutting-edge technology.
The Project System adds a new dimension to mySAP PLM. It accompanies the
entire life cycle of a project from the initial idea to its completion. It helps you
to manage your projects successfully, as you plan, execute, and control your
goals in a targeted and cost-effective manner.
Figure 1-1: Product Map of the Project System
The integrated Project System supports you to this end and optimizes your business processes during project execution. It helps you to reduce routine activities and speeds up processes.
Comprehensive project management and optimum combination of business
procedures are central to this. The range of functions and the integrated working methods are determining characteristics of the software, which opens the
way to a new level of effectivity in progressive project management.
Project System is a total solution that is independent of any particular industry, but which can be adapted to the requirements of individual branches. As
an integrated key functional area of mySAP PLM, it is aligned with the requirements of Financial Accounting, Sales and Distribution, Materials Management
and Production Planning and Control. In addition, the harmonious combination
of the Project System with the mySAP.com e-business platform opens new horizons
for modern project management.
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Introduction
Figure 1-2: An Overview of Project Procedure
With the Project System, we provide you with a product whose multifaceted
functions are tailor-made to meet the demands that are placed on you during
different phases of your project. As Figure 2 shows, the Project System supports
you when you are planning, using and evaluating your project data.
During a project, the information system gives you a permanent and detailed
picture of the current status of a project, above and beyond the functions described in the graphic.
The range and intensity with which you pursue certain aims with a project depends on the nature of the project. In one project, for example, costs may take
precedence. In another, you may place the emphasis on planning and monitoring dates and resources.
When you use the Project System, the specific requirements underpinning every project do not present you with any problems. You can use it for a variety of
projects, for example:
Research and Development Projects

Make-to-Order Production
Engineering Projects
Investment Plans
Maintenance Measures
Data Processing Projects
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Introduction
The Project System brings together your business processes into an integrated
project management, which guarantees interdisciplinary cooperation between the
specialist areas involved. It thereby brackets together several modules, which provide optimal support for your business processes, in particular by integration with
Sales and Distribution

Production Planning and Control
Capacity Planning
Materials Management
Internal and External Accounting
Cash Management
Investment Management
Document Management
Quality Management
Plant Maintenance
Product Data Management
mySAP PLM enables real-time project design and monitoring from the point
when you structure a project, plan its execution through to actually controlling
it after it has started. Monitoring and analysis functions alert you to problems
and enable you to take corrective measures at any point during a project.
Successful Implementation in Practice

Many companies have been successfully using the Project System for many years.
This provides them with a high degree of support for the integration of crossdepartmental and cross-company business processes. It is noticeable that the
Project System is used in almost all industries. Not only does the engineering and
construction industry benefit from its high level of functionality and flexibility,
but also industries like automotive for example. In the following figure, you see
how our customers with a productive Project System are distributed across the
individual branches:
Figure 1-3: Distribution of Productive Users in Percent
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Introduction
Implementing the Project System has already given many of our customers the
assurance of being prepared for the demands of the future. This includes designing even more efficient core business processes in their company, with even
closer links to their customer base. The following reports from customers, who
have taken stock after successfully implementing the Project System, show that
these goals can be achieved faster and better using the SAP Project System:
Customer Opinions
Our massive growth requires us to be able to restructure capacities

quickly and flexibly. Cross-project resource planning with SAP is
therefore an important factor for the success of our company. (Frequentis)
After six months, we were already seeing an improvement in terms
of keeping to schedules thanks to the Project System. The Project
System helps us to replace department-oriented structures with process-oriented structures in a flexible way. We have visibly improved
quality in all areas, reduced errors and laid the foundations for a successful switch from conventional order processing to modern project
management. (Gebauer)
The quality of order processing and project controlling has been
lifted to a totally new level by the Project System. As a plant engineering and construction company, we profit in diverse ways from
this. At the same time, the standardization in accounting permits a
more flexible and varied utilization of employees. (Siemens Verkehrstechnik)
The Project System creates the basis for fast and transparent order processing
that helps us to secure a strong competitive position. (SchwrerHaus)
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Todays competitive business models are
being driven to a large extent by the
opportunities offered by the Internet.
Building on the enjoySAP initiative, the
mySAP.com strategy positions the Internet
market at the focus of all SAP product and
service development. (Hasso Plattner)
There can be no more doubt about it the Internet has finally come of age.
Companies who only use the World Wide Web merely to distribute their annual
company report have missed the value of the new Internet economy. According
to experts, all companies will become Internet companies within the next five
years.
This trend is largely a result of the unlimited advantages presented by the
Internet and its continual rapid-fire development 24 x 7 availability,
integration bridging system boundaries, and transaction security. In addition,
user-oriented personalization and role-based concepts are available for internal
use by your employees in your company, based on their individual workplaces.
These factors prove what many business experts have predicted for a long time
the future belongs to the Internet.
In addition to the breadth of opportunities offered by the Internet, there are also
inherent risks. New sources of information are almost impossible to keep track
of without the appropriate tools, as the tendency for unlimited growth develops
along with the Internet. It is exactly because the Internet increasingly places (too
many) demands on us that we need software applications that are clearly structured, manageable and user-friendly. They are essential for orienting your employees in a world that is constantly increasing in complexity, and therefore,
are essential for the success of your company. For any new project management
taking on this challenge, successful knowledge and information management
assumes just as important a position as the new Collaborative Engineering and
Project Management (CEP) tool available in the Project System.
A change of perspective can be observed in the modern enterprise. Companies
previously favored Enterprise Resource Planning (ERP) solutions used to be
favored for designing and optimizing internal business processes. In the
majority of companies today, the Internet drives the management of crosscompany business processes. SAP has taken this process into account in its
state-of-the-art Internet strategy, mySAP.com, and continues to uphold the
claim of being one step ahead of change in this area. SAP is not only obligated
Redefining SAP AG
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to make its internationally-proven applications Internet-enabled, but also is

committed to be a driving force in the new Internet economy, rather than simply
being driven by it. In the realm of Internet-based project management,
communication, production, and business-to-business techniques, SAP can only
enhance the excellent position it holds in the area of standard business software.
In todays Internet economy, one of the most important tenets for conducting
successful business remains truer than ever before: The customer is king. The
key to business success lies in the quality of your contacts to the external world.
Competition and the effects of Internet business demand increasingly closer
contact to customers, while modern technology adds a new dimension to
customer relationship management. At the same time, the rapid ongoing
development of the Internet also presents new challenges to internal standard
software such as SAPs Project System. Your employees need to be able to
process and control their projects using the Internet or intranet without being
restricted in any way by time or location. This reality not only demands a userfriendly interface that can be used quickly and easily by all participants in a
project, but also unlimited and continual access to the information and data
needed for processing that project.
The Project System does justice to this requirement. SAP has created an excellent
means of providing your enterprise with global access to relevant project data
in its Collaborative Engineering and Project Management (CEP) capability. CEP
also allows you to process selected data separately from your SAP System and
to reenter it into same system afterwards at any point in time and from
virtually every PC with Internet access.
SAP fulfilled peoples expectations of a market leader with the highly successful
EnjoySAP initiative in 1998, both in the area of new media and also userfriendliness increasingly viewed as an unconditional criterium for software
development today. Under the EnjoySAP motto The software works the way I
do, users were given the option of creating their own, personalized user
interface. The aim was to make it easier for users of SAP software to learn the
system, work more efficiently with it and adapt it to suit their own requirements.
By including users in the development process and cooperating with renowned
design experts during the enjoySAP initiative, SAP software developed its software solutions in such a way that they matched the individual working methods
of the users.
By doing so, companies were able to decentralize and simplify their cross-company processes, as well as reduce ongoing costs and, above all, to fundamentally increase user motivation. The goal was for every employee to take part in
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a companys business processes. The user interfaces were therefore tailored exactly to the preferences, experience, and requirements of its users at any time
and anywhere. With enjoySAP, every user is a VIP they profit from the new
visual and interactive design and their own personal interface.
EnjoySAP also laid the foundations for the creation of a unique Web-based
software when mySAP.com debuted in 1999.
By developing mySAP.com, SAP has created a new e-business platform from
which companies can make the most of the options and advantages provided by
the Internet. Our goal is to strengthen your customer relationships by reinforcing
cooperation between communities. We achieve this by making access possible
round-the-clock and round-the-globe.
mySAP.com offers companies a cooperative business management environment
for the growing volume of business conducted over the Internet. This environment
is characterized by personalized solutions based on an integrated component
architecture. mySAP.com opens the door to the collaborative world of the Internet
and, above and beyond this, allows you to make direct contact with customers
and business partners. This direct contact with customers and business partners
helps you improve your companys ability to fulfill your customers wishes.
mySAP.com is SAPs comprehensive e-business platform for the optimal integration of all relevant business processes over the Internet. mySAP.com offers
you seamless and universal integration of SAP and non-SAP solutions from
establishing first contact to all subsequent business processes. In this way,
mySAP.com provides a complete business environment for electronic trade. The
mySAP.com e-business platform consists three areas of solutions:
Cross-Industry Solutions, including mySAP Workplace, mySAP Customer

Relationship Management, mySAP Supply Chain Management, mySAP Marketplace, as well as the traditional areas of mySAP Financials and mySAP
Human Resources, for example
Industry Solutions tailored to meet the specific requirements of 21 industries
in six different business sectors, including mySAP Utilities, mySAP Chemicals, mySAP Media, and so on
Infrastructure and Services that support and enhance the open and flexible
architecture required by the Cross-Industry and Industry Solutions. my SAP
Technology, mySAP Services, and mySAP Hosting make up SAPs state-ofthe-art Infrastructure and Services offering
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mySAP Workplace - The Gateway to a World of Information

My Personal
mySAP Workplace
If you are a joiner, for example, a well-equipped workplace center would

require easy access to necessary tools, a construction blueprint in full view,
operating instructions, and a workshop inventory. For jobs of a less manual
nature, a combination of knowledge and tools tailored to the tasks of that job
are just as essential. Of course, the tools are more sophisticated, with more
emphasis is placed on information. This is exactly what mySAPWorkplace offers
both preconfiguration and the ability to personalize further to suit all possible
roles in an organization.
The mySAP Workplace is an enterprise portal that gives you, and all other users,
fast, simple, and user-friendly Web-based access to all internal and external
applications required to perform daily work tasks, when using SAP solutions in
general, as well as the Project System in particular. The mySAP Workplace helps
you and your colleagues by providing the appropriate information and applications per click of the mouse, with an interface that is easy to understand, adapt
and use.
Single Sign-On: Everything at a Glance
Using one of the current Internet browsers such as Microsoft Internet Explorer,
for example, you access a user interface that is refreshingly simple. However,
the high level of functionality expected by SAP solutions is not compromised.
From this single point of access, you can reach all of the applications, content,
and services set up in your personalized user interface for your roles, or the roles
of your colleagues in your company. You no longer need to repeatedly enter
passwords or search terms. This also gets rid of the potential confusion caused
when springing back and forth between different applications.
Personalized and Role-Based

User Interfaces
Each individual user places specific demands on their workplace. This is why
the mySAP Workplace in the Project System is preconfigured and can be fully
modified to suit the individual requirements of your employees.
With this in mind, specific menus have been created for the typical roles that
exist in project management. have to be filled when one or more projects are
carried out. Menu content is based on the tasks of the individual roles, plus the
information and access requirements specified by these tasks:
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The Project Manager plans, controls, and coordinates the activities in a project, ensuring that individual goals are achieved within a predefined time
schedule. As a rule, the project manager does not work in the system all the
time and therefore needs to be able to get an overview of the project status
as quickly as possible. As a result, they require all kinds of information,
which is already prepared data-technically and graphically. For example,
about the cost centers, work centers and personnel numbers, the total planned and actual costs, the costs and revenues situation, project progress as
regards the schedule, cashflow and so on.
The Project Controller usually has to look after more than one project, which
means that they have completely different requirements to those of a project manager. For example, they are primarily interested in costs, revenues
and cash figures, key figures, such as work in process or cost of sales and,
for example, objects that contained errors at month-end closing or elements
that could not be settled because of their status.
The Project Planner plans the project structure. Often they are also responsible for supplying material on time and monitoring and controlling dates.
They need to see any hotspots at a glance or where something is already
getting out of hand.
The Project Accountant processes a project and is the project managers
right-hand assistant. Depending on how things are organized in the particular company, the interests of the project accountant are a combination of
the requirements of the controller and the project manager.
The Subproject Manager is only responsible for part of a project and is therefore only interested in these objects in a project. Like the overall project
manager at the higher level, they plan and coordinate the activities in a subproject, ensuring that individual goals are achieved within the predefined
time schedule. They also want to have an overview of the status of a subproject as quickly as possible and for this, they require information that can be
accessed quickly and understood at a glance.
A Project Worker is primarily interested in the objects with which they are
directly involved. For various reasons, it may be necessary to provide them
with information and authorization for particular subareas in a project only.
In this case too, mySAP Workplace can be tailored exactly to individual
employees.
You can modify the preconfigured mySAP Workplace to your own requirements,
for example, by adding links to special transactions or Web sites that you use
regularly. The open and flexible infrastructure of mySAP Workplace ensures full
use of the resources that are made available according to the role and requirements of your users.
A centrally situated and administered server and top-notch security mechanisms
provide users not only with the comfort of Single Sign-On, but also with the
simplest access imaginable to their workplace. Apart from a PC with Internet
access and a web browser, they do no need any other hardware or software components and also require no special client installation. They simply log on to
their mySAP Workplace and can start working immediately: just as if they were
in their own office.
Advantages of the mySAP Workplace
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As a user of mySAP Workplace, you experience a totally new type of workplace

that is easy to use and adds an element of fun to your work. It doesnt matter
whether you access your Workplace locally or via the Internet: you always have
the business processes, information and services that you require for your tasks
at your fingertips. In addition, you have permanent access via a click of the
mouse to other peripheral applications such as Microsoft Outlook, stocks and
shares information or the shopping cart.
In addition to the continued improvement and simplification of software
applications, the challenge that software developers such as SAP are facing is
how to provide and prepare knowledge in a manner that suits users: Knowledge
Management. MySAP Workplace with its MiniApps has made an initial big
step in this direction. Information from all sorts of different sources can be
assembled according to specific roles in the form of mini applications. In
relation to the Project System, you can display your most important projects,
along with related networks, the documents that you use most often or current
messages, on the mySAP Workplace. Mini applications are easy and quick to use
and you can add, change or remove them again as required. More mini-apps
specific to PS are planned and will soon be available in the Workplace.
mySAP Collaborative Business Scenarios

The Project System, together with mySAP Collaborative Business Scenarios,
offers you different options for managing your internal and cross-company
projects even more successfully. mySAP Collaborative Business Scenarios
enables you to access SAP solutions. You can restrict yourself to your own
company or include other companies.
In addition to a series of cross-company, role-based functions, which are both
SAP-compatible and non-SAP compatible, such as Enterprise Buyer (sales and
purchasing at business-to-business level) and mySAP CRM (customer
relationship management), different applications for exchanging data and
information and employee self-services, SAP has also developed new functions
for communicating between mySAP.com and SAP Logistics. These functions
help you to use synergy effects and the opportunities offered by the Internet to
the full. The functions that are available so far for the Project System are
Collaborative Engineering and Project Management (CEP), Documents@Web
and Claim.
Collaborative Engineering and Project
Management (CEP)
2-6
The continued globalization of projects means that exchanging information

efficiently between project teams that are in different locations and have different technical requirements is becoming increasingly important. Collaborative
Engineering and Project Management (CEP) in the Project System enables you
to carry out and represent business processes between your company and external project or business partners (manufacturers and subcontractors) within
the framework of the Internet.
The goal of the CEP scenario is to transfer information or knowledge
confidentially between the person responsible for the project in your company
and external partners or participants during joint project tasks. For example, the
development of a design when constructing a plant. Using CEP, you can send
project structures, product structures and documents related to this task over the
Internet from the SAP System to selected participants for processing. Changed
objects or comments are sent back to you, you can check them and transfer them
back to the SAP System, as required.
A scenario example:
1 A Customer plans a development and defines a project structure for this in
Microsoft Project, which they then send to possible business partners with a
request for a quotation.
2 The Project Manager from one of the business partners companies enters the
specifications in the project plan in the Project Builder according to the
request received. They then store the documentation and scheduling in a
configuration folder, and send the development partners an e-mail containing an URL link to this folder.
3 The Development Partner updates the schedule stored in the folder and adds
documents to the detailed specification.
4 The Project Manager is informed by e-mail about the feedback from the
development partner and checks the changes. The Project Manager then
sends a copy of the folder and the project status report to Controlling for an
internal review.
5 In the meantime, the Customer is informed about the status of the project by
e-mail and can access a copy of the folder to review the project. When
returning the folder, the Customer can inform the Project Manager of any
desired changes. The design and development process is carried out and
completed according to the customers requirements.
6 After a final review of the modified project details, the Customer gives his or
her approval for continuing the project.
7 The Project Manager checks all comments made by the Customer, compares
these with the official project plan and loads the final structures and resources
into the system.
Figure 2-1: mySAP Business Scenario:

Collaborative Engineering & Project
Management (CEP)
2-7
Figure 2-2: Collaborative Engineering and Project Management

Documents
(Documents@Web)
In addition to the document management functions mySAP.com provides a

number of Mini-Apps and Web Add-Ons. These Web-enabled functions make it
easy for you to find, display, and process Document Management System (DMS)
documents without needing to install a SAPGUI.
Some examples:
Your Project Manager is looking for particular project documents for their
current project. As search criteria, they can enter phrases or words from the
document or the document information record, project data, or the
documents classification data. The Project Manager can immediately pick
out the relevant documents from the hit list.
A Subproject Manager is looking for all specification documents for one of
their projects so that they can be released. The Subproject Manager has access
to the same functions for finding and displaying documents as the Project
Manager. In addition, the Subproject Manager can carry out status changes
in the hit list and, if required, change the contents of documents.
A Design Engineer uses the search function to display a personal worklist for
several projects and to make changes to these documents. They can also
create new documents and link them with projects.
Searching for documents is simplified by using external search engines from

Verity, Fulcrum, or SAP. The search function described in this example with a
project reference could also be used for any other objects that can be linked with
DMS documents (for example, technical work centers and messages).
2-8
A claim is a special type of notification used by project management to document variances in a project and trigger action to resolve these variances. You
can create as many notifications as required in an Internet browser, check their
status, and display them again.
Notifications in a
Project
Some scenario examples:
A Project Worker discovers a variance in a project and enters a notification

in the Internet or intranet, describing the variance by entering a text. This
ensures that the information is not lost and the notification can be processed specifically for that claim.
If the Project Worker knows that a claim can result from a variance, they
create a claim instead, using a form specifically designed for claims (for
example, by entering the relevant work breakdown structure (WBS) element).
Workflow is then used in the system to trigger further processing of this claim
after the claim has been authorized.
If the Project Worker in question wants to enter information that cannot be
entered in the form, they can process the claim from a transaction in the
Internet browser. During this process, the entire range of SAP functionality
is available to the Project Worker, for example, such as initiating activities
to resolve the variance on which the claim is based. The activities to be processed are displayed in the Project Workers worklist as a MiniApp.
From the Internet or intranet, the Project Worker can display an overview of
any notifications created and their status, and can then go to the claims
display in the Internet browser. If the Project Worker wants to provide more
information to the person currently processing the claim , they can attach
notes to individual claims.
The technology which claims are based can also be used for entering general
notifications. For example, you can create notifications of information required by a subsupplier with reference to a joint project.
With the features described here, mySAP.com already represents one of the best
and most up-to-date solutions for long-term, customer-oriented, highly
functional cooperation between you and your partners via the World Wide Web.
In this context, effective project management not only means making existing
successful functions in the Project System Web-compatible, but also being quick
to recognize and make full use of the new possibilities offered by the Internet
that enhance project management. In the shortest time possible, we have already
produced results that are ready for implementation: mySAP Workplace,
MiniApps, Collaborative Engineering and Project Management (CEP),
Documents@Web, and Claim along with mySAP Collaborative Business
Scenarios. As you can see, in contrast to other providers, we keep our promises.
And thats just the beginning.
2-9
Functions in Detail
At the beginning of every project, irrespective of whether the development of a
new product, the construction of a plant for a customer, or an internal organization
project, the first step is to define the structures that are necessary to manage your
project and to incorporate these structures into your existing enterprise
organization and processes.
The organizational units in the SAP System are so flexible that you can use them
to depict very complex enterprise structures. By suitably assigning objects in
the Project System to organizational units in Logistics and Accounting, you
integrate your projects into the existing enterprise structure. This not only
means that the Project System can do without its own organizational structures
but that you can display projects from different views.
Figure 3-1: Project System Assignments to Structures in Accounting and Logistics
3-1
Client
The client is the top-level organizational unit. The client corresponds to a group
with a number of subsidiaries, for example. The Project System as an application
module is positioned at client level from where it is linked with the Accounting
organizational structures. As illustrated in the graphic below, this is valid not
only for individual business areas in your enterprise but also controlling area
with their subordinate levels profit center, cost center, and company code.
Figure 3-2: Organizational Structures in Accounting
3-2
Business Area
A business area is a sharply delineated activity or responsibility area in your

enterprise. Internal balance sheets and profit and loss statements are drawn up
for it. These balance sheets and profit and loss statements do not however fulfill all legal requirements for the publication of such documents.
Controlling Area
Controlling areas are the organizational units in a group that 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.
Company Code
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
required by legislation are produced at company code level.
Cost Center
A cost center is an organizational unit within a controlling area. It represents a

sharply delineated area in which costs arise. The delineation can be based on
functions, cost settlement techniques, physical location, or responsibility area.
Profit Center
Profit centers divide your business on a management basis. The basic aim of
profit center accounting is to manage areas of the company as entities that are
operating independently in the market.
An capital investment program is a hierarchical structure of all the planned or

budgeted costs for investments in your company or enterprise for a fixed period.
You can build the structure as you like, for example according to organization
units or the investment itself.
Capital Investment Program
The purchasing organization is an organizational unit that procures materials

or services for one or more plants and negotiates terms with vendors. It is legally
responsible for all purchasing activities and is therefore assigned to a company
code.
Purchasing Organization
The purchasing organization is divided into purchasing groups that are responsible
for particular purchasing activities, for instance purchasing certain materials.
Purchasing Group
Plants are units within Logistics that split up your enterprise for production,
procurement, maintenance and materials planning purposes. A plant can be a
production site or simply a collection of adjacent locations that manages its own
stock.
You can use storage locations to distinguish between material stocks within a plant.
The term storage location usually refers to the physical location of the stock.
Plant
Storage Location
3-3
Structures
Structures
For successful project management you must model all the processes in a project
and be able to display their structure and the sequence of events. The Project
Systems make this possible at all times by providing basic data, standard structures, and templates which greatly simplify creating and planning projects.
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 that are to be
carried out. A clear project structure is the basis for successful project planning,
monitoring, and control.
Depending on the nature of the project and the emphasis in controlling, you
structure your project using a work breakdown structure (WBS) or a network.
The activities in a network can be linked using relationships to activities in the
same network or in another network.
The work breakdown structure describes the project from a phase, function or
product point of view. Actual project processing is planned using networks.
Network
It contains the individual project tasks and their interdependencies in the form
of activities and relationships
Project Definition
The project definition is a general description of the project you want to manage. You use it to record the ides behind the project. At this point in time you
do not need to create a work breakdown structure or activities. Later on, the
project definition is the container for all objects that are created within a project,
for example for WBS elements, network activities.
It also contains organizational data that is valid for the whole project such as:
Controlling Area
Business Area
Company Code
Plant
Factory Calendar

The work breakdown structure (WBS) is a hierarchical model of the project,
providing a view of the phases and functions. It splits the project into manageable parts.
3-4
Structures
The work breakdown structure
Forms the basis for planning, coordinating, and controlling the project
Shows the work, time, and money spent on a project
Makes the structure of a project transparent and documents responsibilities
Forms the basis for both budgeting and the planning and analysis of costs
in project controlling
In the Project System, the individual tasks required to carry out a project are
called work breakdown elements (WBS elements). Depending on the phase of
the project, you can further breakdown the work with subordinate WBS elements.
WBS Elements
Figure 3-3: Example of a Work Breakdown Structure (WBS)
Network and Activities

The actual processing of a project is planned using networks. Networks describe
the sequence in which projects are processed. The main elements of networks
are activities and relationships. Networks form the basis for planning, analyzing, and monitoring time schedules, costs and resources.
Networks
You use activities in networks to plan personnel resources, other capacities,

materials, PRTs, and service requirements. You can add detail to your planning
by using subnetworks and activity elements.
Activities
3-5
Structures
You can link activities with the work breakdown structure by assigning activities to WBS elements. You can also see details on costs, dates, and capacities at
activity level.
Figure 3-4: Overall View of the Work Breakdown Structure with Activities
Activity Types
You use different activity types, depending on the type of tasks you want to
carry out in a project.
For tasks that require capacities (machines or personnel) in your business, create
internally processed activities.
For tasks that are to be processed by outside contractors, use externally
processed activities. Such activities form a link to Purchasing. You can refer to
a purchasing info record that contains information such as prices and delivery
dates for external processing. The system automatically creates a purchase
requisition from the data in an externally processed activity.
If you want to plan costs without referencing other objects in the system, use
general costs activities. An example would be planning travel expenses.
If you want to add more details to an activity, create activity elements. You can
add details to any activity by using work, external, or costs activity elements.
3-6
Structures
You plan materials that you require to execute a project by assigning material
components to the relevant activity.
You can also assign as many texts or documents as you like to activities and
WBS elements. You can enter texts, for instance minutes of meetings, in an
editor in the Project System or in Microsoft Word for Windows. It is possible to
send these texts to another user in the system. Documents are managed in the
Document Management System, but you can display and edit them directly in
the Project System. Using the Document Management System you can also access
documents whose original files are not stored in the SAP System. This means,
for instance, that you can display drawings from a CAD system directly in the
Project System.
Figure 3-5: Network Structure
You use relationships to depict chronological and technical dependencies

between activities. The type of the relationship determines how two activities
are linked. There are the following types of relationships in the Project System:
Finish-Start, Start-Start, Finish-Finish, and Start-Finish.
Relationships
You can use relationships to link activities in different networks. This means that
you can produce a time schedule for a whole project, irrespective of whether you
are using one large network or several smaller ones.
3-7
Structures
Graphics
You can use graphics to edit both work breakdown structures and networks. The
hierarchy graphic presents an overview of the work breakdown structure, while
the network graphic gives you an overview of all the networks that are linked
to another with relationships.
Figure 3-6: Relationships
Milestones
Milestones are events in a project to which particular importance is attached or
which trigger a predefined function. In general, they indicate transitions
between different phases or departments. You can assign milestones to both
WBS elements and activities.
In the Project System, milestones are used to:
Milestone Functions in Networks
You can use predefined milestone functions in networks to trigger a sequence

of steps. Examples include:
3-8
Trigger predefined functions in network activities

Determine the percentage of completion (milestone technique in progress
analysis)
Releasing activities
Including standard networks
Creating networks and subnetworks
Triggering workflow tasks
Structures
For customer projects, such as in engineer-to-order manufacturing, you usually

bill the customer once certain phases have been completed in the project. If you
have milestones representing phases in networks or WBS elements, you can use
these milestones to create a billing plan. Once a milestone is reached, the Project
System automatically copies the actual date from the milestone into the billing
plan so you can bill the customer.
Milestones Dates in Billing Plans
Figure 3-7: Milestone Functions
Templates
Although every project is unique, it is often possible to standardize structures
and processes, in whole or 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 work and product management in later projects. For example, you only
have to create a standard network once and you can copy it many times to create
new networks with the same structure.
A standard work breakdown structure (standard WBS) can be used as a template
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 SAP System can automatically
create a customer project with all the required objects and relationships when
you are processing a quotation or a sales order.
Standard WBS
A standard network can be used as a template for creating a new network or

expanding an existing one.
Standard Network
3-9
Structures
Simulations
You use simulation to plan alternatives, that is the classic What-If cases. They
are created manually, can be changed and deleted.
At the beginning of a project you simulate the effects of the project before you
make it make it available for further planning. Simulation versions are particularly useful during the quotation phase in comparing different scenarios. You
can work with several simulation versions and then choose the best suited one
to continue work with.
When a project is already operative, you can copy it to a simulation version,
which you can then edit, and transfer back to the operative project. When you
transfer a project in either direction, you can first carry out a test run to check
that the transfer causes no problems.
Figure 3-8: Simulation in the Project System
You can create simulation versions for whole projects or for subhierarchies.
3-10
Structures
Editing Tools
The SAP Project System provides you with a wide range of tools with which you
can build up your project and process it. These tools facilitate successful project
management and reduce the effort required for routine tasks.
Project Builder
The Project Builder is a user-friendly method of accessing the Project System
and enables you to edit your projects quickly and efficiently.
Its clear screen structure, split into three, and the ease with which you can use it,
combine to provide you with a comfortable working environment that facilitates
your daily work in the Project System. It also provides you with an overview of
all the project data that interests you.
User- Friendly
Context sensitive menus, Drag & Drop, and the capability to define your own
worklist and templates pool, further accelerate your work with projects.
The Project Builder integrates all the application-specific functions necessary
for processing your projects:
Individual Worklist
and Templates
In the Project Builder, you can process WBS structures and networks
individually or integrated in other structures.
The hierarchy of your current project is displayed in a separate screen area,
while you are editing it.
You can make user-specific changes to the settings, to suit your way of
working.
You can create, change or display all project structure data in one transaction.
All the overview and detail screens for work breakdown structures and networks
are available. You can call up Easy Cost Planning and Sales Pricing from the
Project Builder. Furthermore you can go directly to the graphic views (hierarchy
and network graphic) and the project planning board with all its charts (capacity,
costs, component, and maintenance order overviews).
3-11
Structures
Figure 3-9: The Project Builder
The three component sections of the Project Builder are:

Structure Tree
The structure tree displays the project object that you have selected in its hierarchical context.
Worklist/ Templates
You can store user-specifically frequently used project data (project definitions,
networks, and WBS elements) in the worklist, so that you can access them
quickly later. Furthermore, a list of the last five projects that you have worked
on is always displayed in the worklist.
The templates are available during processing to create new objects or structures in the current project by including operative or standard project structures.
You can switch between the Worklist and Template views.
Work Area
In the work area, you see the details view of the object selected in the structure
tree. You can also directly access overviews of subordinate objects. The work
area is where you actually edit individual project objects.
Project Planning Board

Graphical Overview
3-12
The project planning board is a graphical tool that simplifies the efficient
planning and controlling of projects. The project planning board allows you to
process all project data together in an integrated fashion. The combination of
tabular data and graphic elements gives you an extensive global overview of
your project. You can use the project planning board to create, edit, and evaluate
Structures
all your project data. Easy to use functions such as undo, grouping, sorting and
highlighting support quick navigation and enable you to efficiently edit your
project structures.
You can set up the project planning board so that the data is presented as you
require.
The project planning board:
Gives you an extensive overview of the hierarchy and the schedule of your
project
Lets you display the organizational and schedule relationships, and change
them in the graphic
Gives you access to all important project data.
You can:
Calculate costs
Plan, check, and change dates
Plan, schedule, and check resources
Plan and distribute work
Level capacities
Make assignments.
Furthermore you can simulate the effect of changes to your project, branch to
more graphics, and call up the costs and capacities reports from the Project
Information System.
The Gantt chart is the central part of the project planning board. It consists of
a tabular and a graphical section, which displays the hierarchical structure of
your project while giving you details of the project schedule. You edit projects
in the Gantt chart:
Structure of the Project Planning Board
Figure 3-10: The Basic Form of the Project Planning Board
3-13
Structures
For WBS elements and activities you can display the following overviews
beneath the Gantt chart:
Figure 3-11: Overviews in the Project Planning Board
3-14
Component overview
On the component overview you can see the requirements and delivery dates
as well as the last goods receipts and issues for material components. You can
go to an additional window where you can display all goods movements for
the selected material components.
Capacity overview
On the capacity overview you can see the available capacity, the required
capacity and the overload for each work center as a bar or a curve. You can
go to an additional window where you can display the required capacity from
all sources sorted according to period for the selected work center.
Structures
Cost overview
On the cost overview you can see the cumulative distribution of costs and
revenues against time (in controlling area currency). In this separate window
you can also call up the period drill-down for the selected WBS element or
activity.
Maintenance order overview
On the maintenance order overview you can see the scheduled dates of maintenance orders. Using field selection, you can display details of the maintenance orders.
Documents
Complex projects require extensive documentation and the provision of technical documents. The Project System uses the highly efficient SAP Document
Management System to give you access to numerous documents that have not
been created in the SAP system such as CAD drawings, graphics, and contracts.
The SAP Document Management System enables you to provide access to documents throughout your enterprise and to link them with SAP objects in various
parts of the enterprise, for instance in the Project System with WBS elements,
activities, and material components.
Document Management
Document management via Intranet and Internet guarantees the flow of information to all departments that are involved in a project. In the case of a decentralized
project scenario, you can retrieve documents using the Internet without having
access to the SAP System. See Section 2: mySAP.com The Internet Strategy of
SAP of this document for information on how you can use the Internet to access
documents relevant to your project quickly and comfortably.
Project documents in the Intranet

and the Internet
In the Project System itself you can also enter large texts for projects (PS texts)
comfortably. If necessary, these texts can be in several languages. Specifications,
description of work packages, minutes etc. are administered in the PS text catalog and are assigned to activities, activity elements, and WBS elements. The text
catalog enables you to find texts that have been stored for a project.
PS Texts
3-15

Smooth and efficient material management is essential for the success of
projects not only in the construction industry, but also in engineering, research
and development, and service industries.
You do not require production facilities to benefit from the integrated procurement processes in the Project System. Its material management functions also
enable you to optimize assembly processes.
Exact On-Time Material Planning
Procurement and production with the SAP System provides you with advantages
that are decisive for successful project management. In the earliest stages of a
project, you can plan materials and components for a project and assign them to
the project. Later on, you can start procurement so that the material is delivered
on time according as required in the project. Alternatively you can plan internal
production, using Material Requirements Planning (MRP) for instance, so that the
materials are available when needed. The system helps you make Make or Buy
decisions, to withdraw from stock and process materials in order to produce the
finished object or its components. Even if the bill of material (BOM) is still being
created and the product structure has not yet been decided upon, you can still
assign material components to a project. These functions enable you to trigger
the procurement or production of parts, which have long lead times.
Optimized Procurement and

Production
As soon as you know which materials are to be acquired and how you want to
do so, the normal procurement processes can be started. It is not important
whether the materials or components are produced internally or purchased from
a vendor. After the components have been procured or assembled, the finished
product can be delivered in its entirety, or the components are delivered and the
product is assembled on-site. In both cases there is always a reference to the
project. The actual costs that are incurred in this process are posted to the project
and can be evaluated at any time. After the components have been procured or
assembled, the finished product can be delivered in its entirety or the components are delivered and the product is assembled on-site. In both cases there is
always a reference to the project.
The tight integration of the Project System with Controlling means that the
demands of controllers and external auditors can always be met:
3-16
The system automatically valuates projects in process and work in process.

You can track project-related stocks at all times.
You can evaluate planned and actual costs of components down to line item
level.
Material Planning for Projects

Complex and dynamic product structures are common in project-oriented
industries. These structures are developed during the project itself, whereby
particularly in plant construction there is little redundancy in the structures. The
functions that are available in the Project System for materials management
reduce the level of complexity and facilitate working with large numbers of
materials. Product structures are linked to projects by assigning material
components to network activities and consequently to WBS elements, which can
manage costs and stock. The processing of these components in the Purchasing
or Production Planning departments is triggered from the Project System. There
is a special group of tools that helps you manage material assignment. Complete
BOMs can be exploded and the individual components assigned to the relevant
activity. You can have changes to the BOMs be reflected immediately in your
project. This means that you not only can assign components from BOMs or
product structures, but can also follow and update subsequent changes to BOMs.
You can of course assign materials or components directly to activities.
Complete BOMs can be exploded and the individual components assigned to the
relevant activity.
Assigning Components
to a Project
Once the activities which have components assigned have been released, the
relevant documents can be generated in Purchasing or Production Planning.
These are either planned orders or purchase requisitions, depending on your
Make or Buy decision. You can generate purchase requisitions for external procurement directly or via MRP. If sufficient material is in stock, this material is
reserved for the activity. You can track material costs and stock levels at an
aggregate level via the WBS element to which the activity is assigned.
Advance procurement and partial deliveries are processes that are common
practice particularly in the plant construction industry. In the Project System,
you can not only procure components in advance but also start the procurement
for materials at the best point in time. You only release materials when necessary. This gives you greater flexibility to change details of components.
If your company does not have its own production facilities, some materials are
not kept in stock, or you want to procure some parts immediately, you may not
want to use MRP. In this case, you can set up the system to generate purchase
requisitions immediately (without reservations). At a later date, Purchasing
converts the requisitions to purchase orders.
Purchase Requisitions without MRP
The requirements dates for the materials are calculated based on the scheduled
dates of the activities to which they are assigned. Of course you can set the
requirements date for each component individually. For instance, you can set
the requirements date for the material to be five days after the start of the
activity.
3-17
If you want to have material delivered directly to a construction site, a

subsidiary, or a customer, you can use third-party orders: You enter the delivery
address in the order and the material is delivered directly without going through
one of your plants.
Internal Production
Integrated
Material Requirements Planning
Material requirements planning (MRP) generates independent and dependent

requirements: Independent requirements are requirements for the component
itself, dependent requirements are generated when the bill of material (BOM) is
exploded, in other words the assemblies and parts from which the component
is built.
If these requirements cannot be covered by material in stock as is generally the
case for project stock, MRP produces either planned orders or purchase requisitions (depending on the settings for the material). In the production process shop
floor control converts planned orders to production orders and releases them.
The material is issued from stock for the production order. The order is processed according to the routing for the material. The system carries out a detailed
availability check for all required materials and if necessary, informs you about
missing parts.
Figure 3-12: Internal Production Process
The system distinguishes between two types of stock for materials or components that are required during production.
3-18
Material that is to be procured and used just for this one project (project stock).
Material that does not have to be procured with reference to the project and
that therefore can be withdrawn from normal plant stock.
The quantities and values of material in project stock are assigned to the project
and can be followed and evaluated at all times. Thus, you can reserve special
components in a separate stock that only is available for your project. On the
other hand, material in plant stock is not assigned to the project, is generally
available and does not appear in stock cost evaluations until it is issued.
In general, the planned values for materials and components can be seen in a
project, as long as a price can be determined using price control.
Grouping Requirements from Several Projects

If the same material is required in several different projects, it is often advantageous for Purchasing and Production to work with larger batch sizes, that is to
plan, produce and procure these materials together. To do so, one WBS element
(the grouping WBS element) is selected to which the requirements (quantities
and values) from other WBS elements are assigned. This WBS element can have
been created solely for this optimization purpose. All steps in the production/
procurement process are then carried out using this WBS element.
Optimal Batch Size
Delivery to Stock
After the operations in the production order have been confirmed and the
material has been consumed, the resulting assembly is the delivered to stock.
External Procurement
There are two scenarios for external material procurement in the Project System:
Generate purchase requisitions in MRP

Generate purchase requisitions directly in the project
Figure 3-13: External Procurement Process
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In both cases the purchase requisitions are consequently converted to purchase

orders which are then sent to the vendor. You can use the Monitoring Dates
function to check up on dates that are relevant to a particular delivery. When
the material is delivered, it is posted to the relevant stock segment. This can also
be either project stock or plant stock. When the material is withdrawn from stock
for use in the relevant activity the system automatically posts a goods issue to
the relevant project. You can use third-party orders, advance procurement, and
requirements grouping for external procurement as described above.
Direct Procurement
Some materials are not managed in stock, for instance very large parts. For these
materials you trigger direct procurement from the project. Purchasing orders the
material as usual, but the material is delivered directly to assembly and is used
immediately. No records of the material are kept in stock management. The costs
of such a material are assigned directly to the network (network header or
activity).
Monitoring Dates
You use Monitoring Dates to follow orders for materials in the procurement
process. This is helpful when the date on which a component is required for an
activity is critical for the rest of a project. As a project manager, you need to
commit to an assembly begin date, however you can only guarantee this date,
if purchase order is issued on time. In many cases, vendors submit quotes and
the purchasing department evaluates them before they issue a purchase order.
The monitoring dates function makes it easier for a project manager to keep an
eye on such important dates for one or more components.
Defining Dates
Monitoring Dates is based on events, such as the creation of a request for quotation, of a purchase order, goods receipt, or the requirements date from the
reservation. You can compare the planned dates with the actual or forecast dates
for each event. You can define events as you like and reference dates from other
objects in the system in these events.
Statuses in Monitoring Dates
You can predefine traffic lights for variances. For example, if the forecast date
is after the planned date, the light changes to yellow for that component. When
the actual date or todays date is after the planned date it changes to red. You
filter or sort the dates overview according to personal criteria. In the overview
you can edit individual dates or highlight variances.
You can also indicate how important a date variance is for your project by setting your own pre-defined status which appears as an icon in the dates overview. For instance, if a traffic light shows you that a delivery is late, you can
contact the vendor. They tell you that the parts have been produced and will be
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delivered in the next few days. At the same time there are other delays in the
project so that this delay is no longer critical but still needs to be monitored.
You can now set a self-defined status for this date that appears as an icon in
the dates overview. This status informs other users that the delay is no longer
important.
With in the Monitoring Dates function you can also schedule the events for the
materials. This scheduling is completely independent of other scheduling in the
SAP System. For instance, you know that
It generally takes 30 days for a vendor to produce and deliver a particular item
You need two days to process the order internally
You need another 10 days to obtain the necessary quotations.
You enter these offsets, a start or finish date manually or by referencing a date
in the system, for example the requirements date. You then schedule the dates
and can see in the dates overview on which date you must issue a purchase order
to make sure the delivery arrives on time.
Figure 3-14: Monitoring Project Dates
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Delivery
The Project System has its own delivery solution, since the normal delivery
function in Sales and Distribution cannot meet the needs of large customer
projects completely.
Delivery of Project Related
Material Components
In Sales and Distribution, a delivery can only be created for a material that is
listed in a sales order. However in large projects several parts have to be
delivered to the construction site at different times. The finished product that is
contained in the sales order is often produced on site, for instance a chemicals
plant. The parts that are required for the plant are usually not specified in the
sales order.
You can use Delivery from Projects to control the delivery of these material
components that are assigned to the project. You can deliver material components that are assigned to individual network activities on different dates. You
can also filter components using component attributes such as plant or material
number or data from the assigned delivery information (delivery date, shipping
point, and so on). You can base your selection of material components for a
delivery based on the project definition, WBS element, sales order, or network.
The data that is required for a delivery, such as recipient, delivery address or
date is stored in the Project System.
Figure 3-15: Deliveries and Projects
You can work with internally produced or externally procured materials as long
as they have been assigned to either a network or a production order. A delivery can also contain material components for third-party orders.
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Project-Driven Procurement and Production Management (PROMAN)

The Project System is one of the most integrated components in the SAP System.
One area in which this is noticeable is the internal and external procurement of
materials and services. When an object is created in the Project System,
corresponding documents are created automatically in other applications. These
documents are processed in the corresponding department and up until recently
this meant that the project management team had only restricted access to
information that was relevant to the project, although the project triggered the
material procurement process.
PROMAN gives you an overview of the documents that have been generated for
materials and services that you require in a project, as well as stock levels, dates,
and quantities. You can branch from PROMAN to the detail screens of the documents in display or change mode and can execute various functions from the
overview screens.
Global Material Document Flow
Currently, PROMAN is available for the Discrete Industry Solutions.
Figure 3-16: PROMAN
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Services and Projects

You can commission services for an order directly in a project as for a material.
To do this, use a service activity. This is basically an external activity with
additional fields for details of the services to be performed. A purchase
requisition is generated for a service activity as for an external activity. When
defining services, you can make use of standard service catalogs.
Monitoring Externally
Procured Services
After you have created a service activity in the Project System, you can use
service processing in Purchasing. Services can be planned or unplanned.
The nature and scope of planned services is known at the start of procurement.
The individual specifications are entered either with the help of a service master
record or standard service catalogs, or directly as short and long texts. Price and
quantity are specified in both cases.
Unplanned services are services that cannot be specified in detail for various
reasons. Therefore they can have no description. They are entered in the form
of monetary limits. Services may be performed up to a value not exceeding these
limits. This allows a certain degree of cost control.
The progress of a service activity is followed using service entry sheets. The
services that have been performed are entered exactly and then accepted by the
person responsible. After all the individual services in the activity have been
entered and approved, the invoicing process can be triggered.
Figure 3-17: Procurement of Services
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To carry out a project, you require various resources. In addition to materials
and funds, the availability and optimal use of capacities (personnel, production,
and assembly capacities) is an important factor in determining the success of
your project. You need to have sufficient resources available at the right time.
By using Capacity Planning, you can recognize your capacity requirements in
time so that you can plan your resources and also react flexibly to changes.
Capacity Planning in the SAP System is based on work centers that have predefined capacities of different categories.
For planning individual personnel resources (persons, positions, and organizational units in personnel management), Workforce Planning is a flexible and
effective tool that is available in the Project System, which runs independently
of Capacity Planning.
Figure 3-18: Life Cycle of an Internally Processed Activity with Resource Planning
The above figure is just an example of an internally processed activity. In general,

all of the processes are not carried out for one activity. For instance, capacity
leveling or workforce planning might be unnecessary.
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Capacity Planning
In the Project System, work centers are the resources that are responsible for
executing an activity. A work center can represent a resource that physically
exists, such as a group of employees or a machine in a workshop, or it can be a
summarization level. Examples of summarization levels are a team of developers,
a design group, a cost center, an assembly area, or a department.
Available Capacity
Capacity Requirements
You enter an available capacity and an operating time in the work center.
In capacity planning you first plan the work to be done during an activity at a
work center. During scheduling, a capacity load (capacity requirement) is generated for this work center. Since a work center can be a summarization level,
you can carry out capacity planning on various levels and consequently with
differing degrees of detail.
Figure 3-19: Available Capacity and Capacity Requirements

Capacity Load
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The comparison between the available capacity from the work center and the
capacity requirement from the activity results in the capacity load. You can
analyze the capacity load in your company with capacity evaluation.
Capacity Evaluation and Leveling

In capacity evaluation the available capacity is compared to the capacity
requirements in either a list or a graphic. The following evaluation methods are
available for capacities:
Capacity Evaluation
In the standard overview, you see the summarized load situation at selected
work center. It compares the capacity requirements and available capacity
at the selected work centers for each period.
In the detailed capacity list, you can display the details of which orders and
networks are the source of capacity requirements for the work centers.
In the variable overview, you can display and evaluate any data you like from
capacity planning.
In all of these evaluations you can display the work centers and individual
capacities and if necessary edit them. It is possible to edit orders and confirmations
from the detailed capacity list and to display the stock or requirements list. You
can, of course, also process capacity data further by downloading it to your PC.
You can also display the capacity load directly in the Project Planning Board
either in tabular or graphic form. By using simulation versions you can examine
the effects of changes on the resources in a project without actually changing
the project. When you have found the optimal solution, you can adopt these
changes immediately. If necessary, you can move activities in the Gantt chart
to avoid overload on a work center.
Capacity Evaluation in
the Project Planning Board
Figure 3-20: Capacity Overview in the Project Planning Board
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Capacity Leveling
The aim of capacity leveling is to dispatch the capacity load to existing resources
optimally. All the information that is required for capacity leveling is available in
the capacity planning tables. For instance, if activities have to be moved, you can
see immediately to which project an activity belongs and which priority it has.
The flexible structure of the graphic planning table enables you to present the
data as you require.
Workforce Planning
You can use this function to distribute the work to be done in internal activities
to personnel resources according to periods. The personnel resources that you
can assign to activities are people, positions, and organizational units in Human
Resources.
Depending on your responsibilities, you can maintain Workforce Planning from
a project view or a work center view. In a separate evaluation view, you can analyze workforce planning from the project, work center, or human resources view.
Figure 3-21: Workforce Planning
There are three views in workforce planning, as follows:
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Work Center View

Work Center Manager uses this view to ensure cross-project availability of
personnel. All activities that are within the planning period and that have
been assigned to the work center are displayed. They can then be assigned
to employees from the work center or from other organizational units.
Project View
Project Manager uses this view to ensure personnel availability for their
project. All the activities in a project are displayed and personnel resources
can be assigned to individual activities from the assigned work center, the
project team for the WBS element, or other organizational units.
Evaluation View
All data is available for evaluation purposes in this view.
On an easy-to-use user interface, you determine which employees should work

on which activity at which time. The activity dates form the framework for this
planning.
In Workforce Planning, you use the work schedule from Human Resources and
the available capacities from the work centers. You can thus check whether the
working time of an employee is exceeded, if you assign them another activity.
You can use the times that have been assigned to a person in workforce planning as starting values for entering working time at a personal level in the Time
Sheet (CATS).
Time Sheet (CATS)
Figure 3-22: CATS Data Entry View
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Claim Management
Claim Management
In project processing, numerous factors such as delivery problems, price variations, and unforeseeable bottlenecks may cause a project to vary from its plan.
When this happens, the contract partners need to establish who is responsible.
You can use Claim Management to do this. Claim Management ensures that you
can make claims resulting from variances as efficiently as possible against the
contract partner. Alternatively, you can defend yourself against claims made by
a business partner.
You can use Claim Management to:
Identify the reasons for the variance and describe both the variance and
its consequences
Document your claims, by means of attached business documents and
Document Management System (DMS) documents
Appoint someone to be responsible for the variance
Initiate any action necessary to deal with the variance (for example, inform
your business partner by e-mail) and document the action
Figure 3-23: Claim Management Data Display
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Claim Management
Variances often result in increased costs. You can enter the costs you expect to
arise either when you create the claim, or later when more detailed information
is available.
Costs of a Claim
You have the following options:
Enter the estimated costs manually

Use the claim to create a unit costing or link it to an existing unit costing
You can also manually enter the costs claimed and accepted.
Status Management and Workflow are two high performance tools you can use
in the SAP System to process claims.
The link between Claim Management and Status Management enables you to
make claim processing dependent on statuses. For example, you can stipulate
that a claim can only be closed when all the tasks in it have been completed.
Status Management
Using the Workflow function enables you to have information distributed

automatically within your business. For example, if you create a claim that
requires approval, the person responsible for approving it automatically receives
a work item in his or her inbox. This ensures seamless claim processing.
Workflow
Claims are integrated into the notification concept of the SAP System, as a special
type of notification. Notifications form a cross-application component, which you
can use to enter, process, and manage various situations. These can range from
simple queries to complex technical problems such as situations that arise in the
course of your companys business and are described in notifications. In this
context, claims represent the project-specific aspect of notification.
Incorporating the Claim into

the Notification System
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Cost Controlling
Cost Controlling
A Prerequisite for Project Success
Keeping to schedule and monitoring costs are the most important factors governing the success of many projects. However, cost overruns do occur, particularly in long-term projects. This is not always due to unforeseeable economic
circumstances. Many such variances can have their roots in project management
for example, in inadequate project definition and planning. Accurate cost
planning is one of the most important prerequisites for project success.
Objectives of Cost Planning
Cost planning has different objectives depending on what phase the project is in:
In the design and rough planning phase, cost planning is a calculation of the
costs you expect to incur on the project.
In the approval phase, cost planning acts as the basis for budget allocation.
During project execution, cost planning is used to monitor and control cost
variances.
Planning Forms
Hierarchical Cost Planning
You have the ability to plan costs in various degrees of detail, depending on
when you are planning and what information is available. For this reason, the
Project System offers a number of planning forms. You use hierarchical cost
planning to make a first, rough cost estimate, designed mainly to allocate basic
values.
Easy Cost Planning
If you are working with a project that has no networks (for example, projects
that emphasize cost controlling or if you are still in the preliminary costing
phase of a complex project), you can use Easy Cost Planning to achieve, simple, quick, quantity-based planning. You create the factors that incur costs from
the project structure, using a predefined planning template. The system uses
prices and rates already stored to value your entries, and distribute the costs in
line with the basic dates for the current WBS element.
Detailed Planning
You use detailed planning to plan costs by cost element at work breakdown
structure (WBS) level. This form of planning makes it easier to agree on cost and
activity allocation.
Network Costing
Network costing is the ideal form of planning, if you are working with networks
to plan your resources and dates. In network costing, the system derives the
planned costs from the quantities and resources planned in the activities, and
distributes them along the time axis.
Using Planning Forms Together
Whatever planning form you choose, the Project System offers a simple, userfriendly way of creating your cost plan. In addition, you can use the planning
forms independently in the WBS and network, or you can use two or more of
them together. This ensures that you can adapt your cost planning at any time
to reflect the most current information.
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Cost Controlling
For example, you can use Easy Cost Planning or detailed planning for some tasks
while using hierarchical cost planning to estimate the costs for the other tasks.
Figure 3-24: Forms of Cost Planning in the Project System
Hierarchical Planning
In the early phase of your project, you do not usually have detailed information for your project.
If you want to obtain a first cost estimate for your project at this time, cost
element-independent, hierarchical planning is the tool for you. You can choose
whether to plan the costs either on all WBS elements or only on WBS elements
that you have indicated are planning elements.
Cost-Element Independent
Structure Planning
Figure 3-25: Hierarchy Graphic with Planned Costs
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Cost Controlling
The following apply to hierarchical planning:
It is not dependent on cost elements.

You can either estimate the expected costs per planning element or take the
cost information from comparison objects.
You enter the plan values hierarchically. To this end, the Project System offers
both top-down and bottom-up planning. In top-down planning, you
distribute the plan values manually from the top planning element to those
lower down. The system checks that that distribution is correct.
In bottom-up planning, you enter the planned values in the lower-lever
planning elements. The system then totals them upward in the hierarchy.
You can plan overall costs first, then distribute the overall value over the
expected lifetime of the project. Conversely, you can first plan values for the
individual years, then have the system total them up to determine an overall
value.
Easy Cost Planning

Easy Cost Planning enables you to plan costs at WBS level, based on quantities
and characteristics. Data entry with this tool is clear, quick, and easy.
Figure 3-26: Easy Cost Planning in Project Processing
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Cost Controlling
The costing structure reflects the WBS, so that you have a clear overview of your
cost planning at all times. You can divide the costing structure further at any
time, without having to add to the project structure.
Integration with the other modules in the SAP System means that you can access
data from cost accounting, purchasing, and materials management when you
carry out your project planning. Your job is to enter the factors that give rise to
costs for the cost calculation in a predefined planning template. The system automatically calculates your entries, using the prices and rates stored in the system,
and distributes the costs so calculated per the basic dates in the respective WBS
elements. This link between the planned costs and the basic dates means that any
changes to the schedule lead to an automatic adjustment to the cost distribution.
Easy Cost Planning offers a range of additional advantages. For example, you can
trigger the following processes (called Execution Services) from the costing:
Execution Services
Purchase Requisition
Purchase Order
Material Reservation
Goods Issue
Internal Activity Allocation
As the system carries out the execution services with the help of the data entered
for the costing, there is no need to enter data again for further processing. This
reduces the risk of errors. If necessary, you can overwrite the data - it is intended
only as default.
In addition, you can use the Easy Cost Planning data to carry out sales pricing.
As both Easy Cost Planning and Sales Pricing are integrated into the central
planning tool, called Project Builder, you can now control the whole business
process, from creating the project to carrying out the sales pricing, using a single
tool.
Detailed Planning
When detailed project information is available and if you want your planning
to be consistent with that in Controlling, particularly the cost and activity allocations, you use detailed planning to plan your costs.
Here, you plan primary and secondary costs by cost element, as follows:
Detailed Planning by Cost Element
Primary Costs
Primary costs arise from the goods your business purchases externally. In the
SAP Project System, you can plan costs by value and quantity. In planning
by value, you enter planned costs by cost element. In quantity planning, you
enter the expected consumption with planned prices by unit of measure.
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Cost Controlling
Secondary Costs
Secondary costs arise from the consumption of internal activities. You can
plan them by quantity, in the form of activity inputs. The system multiplies
the planned activity quantity for a work package or WBS element by the price
of the relevant activity type. The calculated value is stored under a secondary
cost element for the internal activity allocation.
Figure 3-27: Detailed Planning in the Work Breakdown Structure
As with the other forms of cost planning, you can choose any planning timeframe you like. Planning can be by year or period.
Network Costing
You use automatic cost planning in the network at a later stage of planning. By
then, you usually have the project information you need to be able to plan dates
and resources using network activities. The costs are calculated for each activity,
using the information stored in the system, as follows:
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Primary Costs
The costs of goods and services procured externally and planned in externally
processed activities are calculated by the system, using procurement conditions, such as prices and discounts, stored in the purchasing info record.
Secondary Costs
You plan costs for services rendered internally by means of internally processed
activities, which you assign to a work center. The system automatically uses
the information stored in the work center, such as cost center and activity type,
to determine the rate (charge rate for an activity unit). Then it calculates the
relevant planned costs for the activities.
Cost Controlling
If required, you assign materials, whose costs you plan using material components, to internally and externally processed activities. Materials you have
assigned to an activity are divided into:
Material
Inventory-Managed Material
The system creates reservations for inventory-managed material in the warehouse. The planned costs are calculated on the basis of the prices stored in
the material master record.
Material Not Managed as Inventory
The system creates purchase requisitions for material procured directly. The
planned costs are calculated using the purchasing info record.
You can plan your insurance contributions, consulting fees, license fees, or
travel expenses as miscellaneous costs, using general costs activities in your
project. The system adopts the value you have entered in the general costs
activity in cost planning.
General Costs Activities
Figure 3-28: Cost Planning in Networks
Support for Cost Planning

The system can calculate overhead rates automatically, as part of detailed planning, Easy Cost Planning, or network costing. Automatic calculation of project
planned costs includes an amount for overhead rates, adding them to planned
costs as appropriate.
Overhead Calculation
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Cost Controlling
Subsequent Structure Changes
As early as the planning phase, but particularly in the execution phase, it is often
necessary to change a projects structure in light of new information. The Project
System supports you in such work. You can rearrange subprojects or individual
WBS elements, along with their values.
Comparing Alternative Cost Plans
New information on a project, its structure, the planned duration, and the required
resources often make it a good idea to have several different cost plan versions.
In the Project System, you can create additional versions based on existing
planning. You can store the individual versions separately, copy and change them,
and compare them with each other. In this way, you can, for example, create and
compare best- and worst-case scenarios.
Checking Function
Correct cost planning requires the planned values to be consistent structurally

and chronologically. To help you with this, the Project System includes a check
function that points out any inconsistencies in planning. This is particularly
important if planning is carried out locally, by different people. As you can
access the check at any point during planning, you can flexibly adapt planning
in light of current data.
Budget Management
The budget represents the approved, binding cost framework for a project. It
defines the project costs and stipulates these approved costs for a particular
timeframe. The Project System includes a facility for adapting the original
budget to the current state of the project by means of the budget update
function. The availability control function and the overviews it contains are an
important aspect of project control.
Budget Allocation
On completion of the planning phase, a project needs to be approved and
budgeted. The budget differs from cost planning in that it is binding. While you
must plan project costs as accurately as possible during the planning phase, it
is in the approval phase that funds are allocated, in the form of a budget.
Methods of Budget Allocation
Budget is allocated to the WBS elements. The Project System supports the
following methods of budget allocation:
Automatic Allocation
You distribute the budget automatically by copying it from cost planning.
As the Project System allows detailed project cost planning, you can adopt
the values calculated in planning as your project budget.
Manual Allocation
If you allocate your budget manually, you can enter the budget values
directly in the WBS elements.
As budget distribution is from the top WBS element to the subordinate ones
(top-down distribution), you do not have to distribute the whole budget amount
to the subordinate WBS elements. There is no need to allocate budget for every
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Cost Controlling
single project subtask either. You can thus keep funds in reserve to meet unforeseen expenditure. You can allocate overall and/or annual budgets and budget
for as many fiscal years as you want.
Figure 3-29: Budget Allocation
In spite of all the care and expertise you bring to bear, unforeseen events, additional requirements, changes in prices, and so on, may mean you need to update your budget. To help you with this, the Project System includes tools for
entering budget supplements, returns, or transfer for the overall budget or partial budgets. If you update annual budget values, the overall budget can be
adapted automatically. You can cancel budget updates if they later turn out to
be unnecessary.
Flexible Budget Updates
In many businesses, allocating a budget is not the same as actually releasing

the funds. For this reason, the Project System distinguishes between the following budget types. Depending on your current situation, you can allocate your
budget as:
Releases
Current Budget
The current budget is the original budget, as amended by supplements, transfers, and returns.
Releases
The budget can be released in stages, on the basis of the current budget.
You cannot release more budget in a WBS element than is available in the
element.
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Cost Controlling
Support for Budget Management
As with cost planning, the Project System supports your budget allocation work
with a check function that checks that the budget is distributed consistently in
the WBS and displays it in a WBS overview.
Figure 3-30: Budget Allocation: Structure with Annual Overview
The Project System makes budget allocation and updates even easier with the
following additional functions:
All budget changes and the resulting updates are logged. One document is
created for each change. This way, you can always trace how your budget
has been allocated.
You can increase or decrease the budget values for selected WBS elements
by a percentage or amount in a single step.
Availability Control
An Important Part of Project Control
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Monitoring assigned funds is an important part of project control. In the SAP

Project System, you can call up the funds overview, giving you an overview of
funds assignments, at any time. Particularly in important projects, funds assignments can exceed the available funds at an early stage.
Cost Controlling
In addition to the funds overview, which acts as passive availability control,

the Project System includes active availability control. For example, when you
enter a purchase order assigned to a WBS element, active availability control
checks that the available funds are sufficient to cover the purchase order. This
way, the system ensures that excessive funds commitments can be prevented
and corrected as soon as they occur.
Active availability control takes account of defined tolerance limits. If a tolerance
limit is exceeded, the system can trigger different actions, which you have defined.
For example, it can display a warning and send an e-mail to the person responsible for the project. The assigned values (actual, commitment, or order request) for
networks and orders for the project are also subject to availability control.
Figure 3-31: Budget Availability Control
Actual Costs, Commitments, and Cost Forecast

As your project is executed, commitments arise and actual costs are posted. This
usually leads to variances between the original cost plan and the actual course
of the project. Simply moving activities within the floats can be enough to
change how costs develop in a project.
For this reason, you need to store new information arising from the actual data
and commitments for a project. You can then use it as the basis for further planning. The integrated nature of the Project System means that data entered in, for
example, Controlling or Financials can be recorded automatically in your project.
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Cost Controlling
Actual Costs
Actual costs arise in your project from confirmations, postings from financial
accounting (such as trip expenses), the internal activity allocation, goods
movements, and periodic processing. The system posts the actual costs from
Controlling, Financials, and Materials Management to the WBS elements and
networks that cause them. For example, if you require a particular material from
stock for a WBS element in your project, the system automatically charges the
actual costs to the WBS element.
Commitments
If you order goods for your project, financial obligations arise. These are called
commitments. The system automatically enters commitments in your project
when you create purchase requisitions or purchase orders. If you later post a
goods receipt debited to the WBS element or network, the system clears the
commitment and charges actual costs to the WBS element/network.
Cost Forecast
Commitments and actual costs change the operating conditions for cost planning.
SAP has developed the cost forecast so that you can adapt your cost planning to
the changing circumstances.
In the cost forecast, the system values remaining activities on the basis of the
planned, forecast, and actual values, thereby determining the cost to complete
(CTC) for the project. It also calculates the estimated cost at completion (EAC)
by adding the commitments and actual costs already recorded to the CTC.
Figure 3-32: Cost Forecast
The values so determined are default values that act as the basis for a cost forecast.
You can run the cost forecast at any time for one or more projects. To this end,
the system copies the EAC, recalculated because of the scheduling changes or
quantity variances, along with the commitments and actual values, into a forecast version you can evaluate in the information system. If necessary, you can
manage a number of forecast versions in parallel in the system.
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Every project, particularly in the construction industry, for example, is unique
in its goals and how it is executed. This means it is not enough to only use
standard prices to calculate the sales price for a project. You can only use the
planning data from the project known up to the time you are generating the
quotation as your basis for price determination. To help you with this, SAP has
developed a tool that can handle project-specific situations and meets the need
for a standard sales price calculation.
This tool is called Sales Pricing. It uses a standard costing sheet that can be
tailored to your specific requirements and is based on the plan data from the
project (planned quantity, product components used, services, or costing data
from Easy Cost Planning). You can either copy the data directly or modify it to
your specific requirements, before multiplying it by the factor prices. The result
is a cost calculation. The stored costing sheet is used as a model, which also
covers retrograde costing.
Standard Costing Sheet
You can access both sales pricing and Easy Cost Planning from the Project
Builder, which is the central maintenance tool in the Project System. So, if you
calculate your sales prices on the basis of data from Easy Cost Planning, you
use just one tool to control your whole business process from creating the
project to the sales pricing.
The sales pricing closes the gap between cost planning on the one hand and the
sales price calculation on the other. The costing basis and result are visible in
the Project System sales pricing at any time.
Figure 3-33: Sales Pricing
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You process the sales pricing in two different views. The graphic shows how the
value in the work breakdown structure (WBS) elements are copied to the views
and combined there.
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Internal View (Costing Basis):

Here you can see the plan values for your project per the project structure.
You use this view to determine whether all, some, or none of the planned
values should flow into the costing.
External View (Costing Result):
The second processing step shows the customer view of the costing. For this
reason, the plan values are arranged and combined by item in the quotation.

Constant comparison of costs and revenues, and the facility this provides for
assessing the project result (profit or loss) early and correcting it if necessary, s
the mark of successful project management.
The Project System provides reliable information on the likely profit or loss as
early as the quotation phase, and throughout project execution.
Revenue planning is a prerequisite for efficient revenue control. The Project
System includes both manual and automatic revenue planning.
Forms of Planning
Like costs, you can plan revenues hierarchically, independently of revenue elements, or differentiated by revenue element (detailed planning).
Hierarchical revenue planning is usually used in the early stages of long-term,
complex projects to produce an initial survey of the total revenues expected.
At this stage, it is not usually possible to make any meaningful distinction by
cost element.
However, you can make the apportionment by revenue element from hierarchical
planning at any time. If the necessary information is available, plan the revenues
by WBS element, either as an overall value or by period. In overall value planning,
you stipulate how the system distributes the overall value to the periods. If you
enter plan values by period, the system adds them up to achieve a total.
Hierarchical Revenue Planning
Detailed Planning
Figure 3-34: Manual Revenue Planning
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Automatic Revenue Planning
If your project is based on a sales order or customer quotation, the system

automatically adopts the values from the sales document in revenue planning.
In addition, you have the option of planning revenues by time in a billing plan.
The system records these values in the billing element assigned in each case. You
create a billing for either a sales order or a WBS element. The Project System
enables you to create a billing plan for a WBS element, so that you can plan
revenues automatically even in customer projects for which no sales documents
exist yet.
Figure 3-35: Automatic Revenue Planning
The detailed planned revenue display also includes discounts, rebates, and other
sales deductions.
Milestone Billing
Use milestone billing to bill your revenues as of milestone dates. The system then
generates a billing plan, using the milestones dates. This procedure automatically takes account of changes to the schedule
Project-Related Incoming Orders

With this function, the system uses sales orders assigned to the project to calculate key figures for incoming orders and orders on hand. The key figures for
the incoming orders are the expected revenues, costs, and quantities from sales
orders closed or changed in the current period. The orders on hand figure shows
the incoming orders, reduced by the billing documents affecting revenue.
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In the project information system, you can, in addition to the key figures calculated, display the orders on hand as the difference between incoming orders
and the reduction amount.
If you also use Profitability Analysis, the system also processes the key figures
for the incoming orders and the orders on hand from customer projects in company-wide controlling.
Actual Revenues
Billing is the process of supplying customers with accounting information on
the deliveries and services you have performed for their orders. You can assign
sales orders and sales order items to projects or WBS elements that are flagged
as billing elements. The amounts billed appear as actual revenues on the relevant WBS element.
Each time you bill a sales order, actual revenues are recorded automatically in
the assigned project. Integrated processing ensures that the internal cost and
revenue accounts agree with external profit and loss accounting at all times. The
following billing options are available:
Billing is per sales order item as of a single billing date and at a fixed price.
Fixed Price Billing
The total to be billed is apportioned to the individual dates in the billing plan.
In the process, you determine whether dates are scheduled:
Partial Billing
Using the dates entered manually in the billing plan

Automatically, from the milestones in the networks, within the framework
of Assembly Processing
Either from the milestones from the project networks or the subhierarchy of
the WBS element assigned to the sales order
When a milestone or date is reached, the system bills the customer with a percentage of the project cost total or with a predefined amount.
Milestone Billing
The billing plan may contain down payment items as well as the actual billing
items. Down payment requests are created as of the dates so flagged in the billing plan, and are recorded in financial accounting.
Down Payments
The prices for customer-specific services cannot always be defined as fixed

prices in a contract or determined using standard price determination. This is
the case if, for example, if you are carrying out some activities for the first time
and could not calculate costs for them before the contract was signed.
Resource-Related Billing
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Orders like this are billed on a resource-related basis. For example, individual
materials, internal activities, and costs are shown in the billing document: The
steps in the process are as follows:
Pricing
Billing takes place in the billing request, based on the cost information for
the project. You can apply various conditions for the quantity structure and
pricing. For example, billing is possible at internal prices.
Check Resource Items Against Contract and Guarantees
Individual resource items can automatically be excluded from resourcerelated billing or can be reduced.
Dialog Functions
At resource item level, you can make manual changes to the billing request
for example, delete resource items or reduce the amount to be billed.
When you create or change billing requests, the system writes a document
history. This ensures that, the next time you run resource-related billing, no item
that has already been billed is billed again. You can also trace, at any time, how
the individual items have arisen.
The system uses the billing request to create the billing document automatically
at the appropriate dates. The cost information from the billing documents is
recorded and is available for results analysis and evaluation.
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Cash Management
Cash Management
The object of effective project cash management is to maximize profits by
optimizing payment flows.
The Project System includes a cash management facility for planning and monitoring the payment flow on a project-related basis. You can use it to ensure that
down payments and payments to the project flow in as quickly as possible and
that, conversely, outgoing down payments and payments are made as late as
possible. You can plan your cash flow and evaluate the actual flows as they take
place.
Project Cash Management supplies answers to the following questions, all of
which are relevant to effective payment flow monitoring:
How much do I have to pay? How much will I receive?

When must I pay? When can I expect to be paid?
Whom must I pay? From whom will I receive payment?
In which currency will the payment by made?
To which object (WBS element, for example) will the payment be assigned?
Cash Management values your capital commitments on a project basis, and

monitors cash flows. While the cash flow forecast supplies information on future
payment transactions, cash flow monitoring enables you to keep a constant
watch on debit- and credit-side down payments and payments, and includes a
project payment history.
Project Cash Management enables you to keep a trace on planned and actual
payments. To this end, it includes the following function:
Manual payment planning (by period and year) in commitment items for the
WBS element
Costing and correctly timed recording of planned payments based on detailed
project planning or from the billing data in the quotation or order
Actual and commitment payment data is recorded
In the project, the system automatically records payment obligations and
payments from various business transactions assigned to the project.
Evaluation of payment data in the project information system for costs,
revenues, and payments
In addition, you can calculate planned and actual interest payments.
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Cash Management
Cash Flow
With the Project System, you can monitor both planned and actual cash flows.
The system monitors incoming and outgoing payments. In doing so, it takes
account of the specific payment conditions, such as dates. Its main task is to
balance expenditures that must be made for purchase orders with revenues.
Figure 3-36: Payment Data in the Project
Planned Cash Flow

Payment Planning Calculated
Automatically
You need information on the expected payment flow, even at the planning stage,
as the costs of financing your project must be included in the quotation costing. Project Cash Management in the Project System automatically copies the
following payment relevant data into planning:
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Data from the billing plan for the sales order

(debit-side payment plan)
Data from the billing plan for the WBS element
(debit-side payment plan)
Data from the invoicing plan in the network costing
(credit-side payment plan)
Cash Management
Alternatively, you can plan incoming payments using the billing plan for the
WBS element or order. For example, you can use the data from the billing plan
for the WBS element, if there are no sales documents yet and hence no billing
plan for the sales order.
Figure 3-37: Payment Flow in the Project
It is also possible to plan the payment flow manually. You use this function
particularly in the early stages of a project, to plan revenues and expenditures
in one or more WBS elements. Manual payment planning does not required
detailed project structures.
Manual Payment Planning
Actual Cash Flow

Payment obligations and payments arise from the various business transactions
carried out during project processing. The Project System records these by date
in the project. For example, a purchase order leads to payment obligations in
the project and can be evaluated accordingly in the information system. When
an invoice is received, the payment information from the purchase order is
replaced with the more precise information from the invoice and is recorded in
the project as a payment commitment. The commitment is finally cleared when
payment is made.
Project Execution Phase
Down payment requests, down payments, invoices, and payments are recorded
in the project as debit-side payment obligations on the revenue side.
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Cash Management
To determine the actual cash flow, you can calculate interest for debit- and creditside payments and down payments by day or by period. The interest calculated
is posted directly to the project. The system records all payment information in
transaction currency, controlling area currency, and the respective transaction
currency. The update can also take account of discounts and currency differences.
The information system includes a number of reports you can use to evaluate
project financial data by currency.
Interest Calculation
Interest can play a major role in long-term projects, because it can significantly
affect the project result. The Project System offers actual and planned interest
calculation facilities to that you can take account of this. The planned interest
calculation is designed to improve planning. The actual interest calculation
calculates the interest for payments, revenues, and, where appropriate, costs. The
balance interest calculation covers both planned and actual interest.
For each run, the system produces a detailed posting and error log. You can
cancel interest runs already made.
Planned Interest Calculation

The planned interest calculation is a very important means of ensuring that,
even at the planning stage, you have the most accurate information possible
available for your funds calculation work. For this reason, the Project System
guarantees you comprehensive, automatic project payment planning, and a
planned interest calculation on the payment data.
The planned interest calculation is particularly useful in projects with runtimes
of over a year, or in capital-intensive projects. It significantly improves the
quality of your planning.
It covers planned costs, planned revenues, and/or planned payments. Planned
payments can be included, accurate to the day.
In every interest run, the system recalculates the planned interest for the whole
lifetime of the project, taking account of any planning changes since the last
interest run. In addition, you have the option of limiting the interest run to a
particular part of the projects lifetime. This reduces the runtime. If you do this,
the system takes account only of changes to the plan for the period specified. If
you do not want to use the data from an interest run already carried out, simply
cancel the run.
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Cash Management
Actual Interest Calculation

The project actual interest calculation calculates interest on balances. The calculation is accurate to the day. The balance interest calculation is based on
payment, down payment, and internal activity documents. The interest is posted
in the form of an accounting document. The interest calculation includes value
dates in the past, interest rate changes, and compound interest.
Like the planned interest calculation, you use the actual interest calculation to
calculate the interest on projects lasting more than a year or on very capitalintensive projects.
The system automatically creates a log, containing detailed information on the
postings made in the interest calculation run.
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From a cost accounting and balance sheet point of view, the valuation of plan
and actual project data at the end of the project or a period is indispensable.
The tasks that occur regularly in project controlling include the following:
Plan and Actual Values:
Results Analysis Work in Process (WIP)

Periodic Transfers
Overhead Calculation
Interest Calculation (see the section on Project Cash Management)
Progress Determination (see the section on Progress)
Settlement
Actual Values Only:
Incoming Orders (see the section on revenues and earnings)

The tasks for interest calculation, progress determination, and incoming
orders are not tied to period-end closing. Instead, you can perform them at
any time. See the sections mentioned for more information on these tasks.
Schedule Manager Your Tool for Period-End Closing

Periodic processing involves processing a large number of individual objects at
a particular time. To make this processing easy to perform and monitor, SAP has
developed a tool called the Schedule Manager. This tool makes it easier to schedule and carry out the tasks that must be performed at period-end closings and
project closings.
The Schedule Manager provides of the following features:
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Process Definition (see Fig. Schedule Manager: 1)

Here you can link together tasks that are related to each other or specify
worklist in which they should be used. You can schedule the process definition as a task in the Scheduler.
Scheduler (see Fig. Schedule Manager: 2)
In the Scheduler, you can schedule tasks in a structure tree and by using a
Drag&Drop function in the daily overview, have the system carry them out
at a particular time.
Monitor (see Fig. Schedule Manager: 3)
Here you can monitor the planned tasks during and after processing. There
is also a facility for post-processing defective objects in a worklist.
Worklist (see Fig. Schedule Manager: 4)
You can use the generic worklist to combine a number of processing steps
into one worklist. After correcting defective objects manually, you can process them again.
Figure 3-38: Schedule Manager
The Schedule Manager allows you to achieve the best possible runtimes for
processes by carrying out certain functions in parallel. In parallel processing,
the objects in question are not processed sequentially on one application server, but in parallel on one or more application servers.
Periodic Tasks
You carry out periodic tasks during project planning as well as during project
execution. This ensures that all project-specific data is determined and made
available to enterprise Controlling.
Results Analysis
You use the results analysis feature in the Project System to determine your
project result. To do so, the system links the costs that have been planned or
posted in the WBS elements and networks with the revenues and confirmed
quantities. It then values them periodically.
You can use planned results analysis to:
Planned Results Analysis
Simulate future results analysis data that is, calculate the expected Profitability Analysis and financial account values in light of planned costs and
revenues
Settle the values to Profitability Analysis
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Actual Results Analysis
With actual results analysis, you compare the costs incurred as of a key date with
the revenues realized by the same date.
Results analysis carries out a period valuation in order to determine:
The inventory of work in process (WIP) for Financial Accounting

Reserves for unrealized costs or costs of complaints (the costs caused by complaints)
Reserves for imminent losses for Financial Accounting and Profitability
Analysis
Cost of sales or a calculated revenue figure for Profitability Analysis
When you settle the project, the data from results analysis can be passed on to
Financial Accounting and Profitability Analysis.
Transfer Price
If you work with transfer prices, that is, the prices charged by parts of your
project to each other, the system can include these in results analysis, in a separate version.
You can transfer data determined with the Project System to the balance sheet.
Doing this repeatedly enables you not only to set up, but also to analyze, balance, and reserve. As stocks and reserves are displayed per project, concurrent
costing and internal valuation of the project are carried out when the project is
executed.
Periodic Transfer
Costs that the system posts to cost collectors (WBS element, internal order, or
cost center) during a period are transferred to the cost centers and projects or
business processes that are responsible for them at the end of the period.
These periodic transfers are designed to help you in making corrections if, for
example, actual costs occur in a different period because of changes to project
dates.
Calculating Overhead
The system allocates planned and actual overhead to work breakdown structure
(WBS) elements and networks. You can have the system carry this out either in
proportion to the unit costs or by using templates. If you choose the latter, the
system distributes the overhead to business processes, or cost centers, or activity types according to what caused them.
In planning, the system automatically determines the overhead in the network
as part of costing, and updates it to the network header or activity.
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Project Settlement
The planned or actual costs and revenues arising in a network (goods issues or
receipts, vendor invoices, customer billing, and so on) are settled, in whole or
in part, to one or more receivers. Settlement transfers costs or revenues to
Financial Accounting (G/L account), Asset Accounting (asset), Profitability
Analysis (profitability segment), and Controlling (order, cost center).
Figure 3-39: Project Settlement
As with overhead calculations, you can run settlement in live or test mode. By
running a test, you can check data for correctness and completeness, and make
any necessary corrections, before making any actual postings.
Simulating Settlement
When running settlement in either live or test mode, you can have the system
generate statistics and a log. The log shows the receivers to whom debits were
charged, the amounts settled, and a list of any errors.
Settlement Log
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Project Progress
Project Progress
The successful control of a project is mainly based on the exact observation and
visibility of all project processes. Costs, resources, and dates must be viewed
across the whole project in order to recognize variances from the project plan
at an early stage. Exact statements can only be made about project progress
relative to target projections when all parameters and their combined effects are
represented and related to the actual work carried out. Current status and ongoing
development of a project can also be determined. The Project System enables
you to plan, carry out, and monitor your project progress effectively. There are
different planning and analysis procedures available for this purpose:
Date Planning
Exact time scheduling with different types of dates and predefined scheduling
scenarios guarantees detailed planning of dates.
Confirmation
By entering reliable actual and forecast values promptly, you can recognize
delays or capacity bottlenecks in good time and react quickly.
Progress Analysis
This procedure compares planned project progress with current project
progress and the actual work carried out to date. This enables you to
recognize cost and date variances at an early stage and take any necessary
steps.
Milestone Trend Analysis
Milestone trend analysis is a simple and effective procedure for controlling
dates in a project. In this process, the system evaluates the relevant milestones
for project progress at different reporting times. The use of a graphical display
means that variances and trends are immediately recognizable.
Date Planning
There are various options in the Project System for date planning and scheduling,
from initially planning your dates to scheduling using network technology
methods. You are free to determine the level of detail of your dates.
The work breakdown structure (WBS) can be used as the basis for an initial
rough plan of the dates. While this is used to represent the project structure,
activities are used to plan the actual course of a project. For detailed planning,
you create and plan the duration of activities, relationships, and time restrictions.
Scheduling itself takes place at the level of the activities and their relationships.
In the Project System, forwards and backwards scheduling is always available,
although users can define which scheduling direction is taken into account first.
Using forwards and backwards scheduling, the system automatically determines
the earliest (forwards scheduling) and latest (backwards scheduling) start and
finish dates of the activities, as well as the requirements dates of materials and
production resources and tools.
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Project Progress
Afterwards, you can compare the calculated dates of the activities with the
manually entered dates of the assigned WBS elements.
Date Types
There are different date types in the Project System:
Basic Dates
Fixed dates that you enter manually in the network or WBS element. Basic
dates are used in scheduling, for example, as the framework for activity dates
or for determining capacity requirements.
Forecast Dates
Predicted dates that you enter manually in the network and WBS element,
which are used for variances.
Actual Dates
Dates that mirror the current status of a project. You can enter these dates
manually or have them transferred automatically from activity confirmations
or other confirmations.
Scheduled Dates
Dates that are calculated by the system from network or WBS scheduling.
You can work with different date types, according to your requirements, and as
well as decide which date type you use for the different date planning functions.
For example, you can schedule a network with forecast values, or transfer the
forecast values from the WBS elements to the basic dates and use them as the
basis for further planning.
The following date types are available for the individual project elements:
Figure 3-40: Date Types in the Project System
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Project Progress
Date Planning in the Work Breakdown Structure

You can schedule dates in the work breakdown structure manually, with the help
of consistency checks, date comparison and date reconciliation. You can plan
dates in lists and overviews, in a hierarchy graphic, a Gantt chart, or the project
planning board. There are different planning methods available for planning
dates:
Figure 3-41: Date Planning in the Work Breakdown Structure

Extensive Functionality
Date planning in the work breakdown structure is distinguished by its extensive

functionality.
Detailing Dates
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If you use the top-down planning method, the Project System checks for
schedule conflicts when you save.
If dates are changed as the project is being carried out, for example, when
actual dates are confirmed, the Project System automatically updates the
dates in the work breakdown structure.
You can compare, pass on or extrapolate the dates of individual WBS
elements.
If you want to give your date structure more detail, you can create activities and
assign them to WBS elements. The dates of activities can be transferred to the
WBS elements. You can link these activities with relationships and, by doing so,
create a network.
Project Progress
Scheduling
Scheduling itself always takes place at the level of the activities and their
relationships.
During scheduling, the system determines the earliest and latest start and finish
dates for executing activities in the network and calculates the capacity
requirements.
Scheduling in Networks
Floats provide you with information about time reserves that are available for
individual activities. You can use the floats calculated in scheduling to move
activities, change their duration and display the critical path of the network. The
system calculates the entire float and the free float. The network graphic shows
you the critical activities in the network.
Floats
In addition, you can define time constraints to adjust scheduling to fixed dates
or basic dates. For example, you can define that a production operation must
be finished on a particular date.
Constraints
Figure 3-42: Scheduling in the Project System
Project Scheduling
In project scheduling, you can schedule a project or subproject, including all the
operations assigned to it. In this case, all dates that you have entered at the level
of the work breakdown structure can be taken into account when the activities
are scheduled.
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Project Progress
Date Planning in the

Using a WBS element, a subtree or an entire project as your starting point, you
schedule the project structure with all the assigned activities. You can transfer the
result, that is, the scheduled dates of the WBS elements, to the basic or forecast
dates of the assigned activity. They are then used as the basis for up-to-date
project scheduling. In addition you can choose whether only networks are to be
scheduled, or maintenance orders and service orders are to be scheduled as well.
There are three predefined scheduling scenarios for WBS scheduling in the
Project System. The top-down and bottom-up scenarios developed in the
work breakdown structure are predefined scenarios whose parameters have been
defined by the system and cannot be changed. If you choose one of the two
scenarios, scheduling in all phases of the project is carried out according to these
predefined parameters. The user does not need to process or check the scheduling
parameters further. In the case of Free Planning, however, you maintain all
scheduling parameters yourself.
Top-Down Scenario
The dates for scheduling are passed down from the project definition to the WBS
elements and activities. The dates of the activities must lie within the dates of
the WBS element to which they are assigned. Similarly the dates of the WBS
elements must lie within the dates of the superior WBS element. All the dates
in the project must lie within the period determined by the basic dates of the
project definition.
Bottom-Up Scenario
In this case, dates are passed up from the bottom of the hierarchy to the top.
The activity dates determined in scheduling are checked against the dates of the
WBS element to which the activities are assigned, in order to see whether the
planning period of the superior WBS element includes the dates of the subordinate elements. If this is not the case, the start date, the finish date or both dates
of the superior WBS element or the project definition are changed accordingly.
Free Scheduling
You can set up the scheduling parameters in any way you like. There are different options in the system for doing this.
Network Scheduling
You can also schedule individual activities that are linked to one another by relationships but are not assigned to a work breakdown structure. Scheduling determines the earliest and latest start and finish dates for carrying out activities in the
network and calculates the required capacity requirements as well as the floats.
When scheduling the overall network, the system schedules all networks that
are linked by relationships. In this process, all linked networks are scheduled
together based on a start and finish date. The result is the coordinated date situation of the entire network.
Of course, you also have the option of scheduling either the entire network or
only the networks of individual subprojects.
When scheduling the overall network, you can also choose whether only networks
are scheduled, or maintenance orders and service orders are scheduled as well.
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Project Progress
Confirmation
Another important step when carrying out a project is the entry of actual data.
Only if real-time and reliable actual values exist for a project can you determine at an early stage whether, for example, delays to a schedule have already
occurred or are to be expected. You can then determine how this affects the
project costs and whether there is sufficient planned or available capacity for
the ongoing processing of an activity. You enter actual values in the form of
confirmations.
Confirmations document the processing status of activities and activity elements
in a network and can be used to forecast how further processing will proceed.
A confirmation provides you with an exact overview of the degree of processing or the remaining work. As with capacity planning, you can enter confirmations with or without direct relation to an employee.
Precise confirmations are very important for realistic and accurate project planning. The following are controlled by confirmations:
Work center capacity load

Update of the actual costs
Update of network activity data (for example, remaining duration and work)
In a confirmation, you can take different values into account, such as the degree
of processing, work center, dates, duration and forecast values.
Milestone functions can also be triggered during a confirmation. For example,
when you confirm an activity that has a milestone assigned to it, then the
activities that come after it are released.
The following options are available for entering confirmations:
Individual Confirmation
You can enter confirmations individually for activities, activity elements and
capacities. When you do this, you can also enter details about goods
movements. You can enter individual confirmations directly from the project
planning board.
Collective Confirmation
With this function, you can confirm activities and activity elements for
different networks simultaneously. Collective confirmation is to be recommended when you enter confirmations centrally in your organization. You
collect all activities that are to be confirmed in a confirmation pool that you
can adapt to your requirements.
Confirmation in the Intranet
You can also enter decentralized confirmations in the Intranet. There, you can
adapt the confirmation screen template for individual users, without having
to modify the SAP Project System. For example, you can hide data fields that
you do not need, include your own company logo and implement additional
functions. You do not need any knowledge of the SAP System to enter actual
data via the Intranet. Access to a PC with an up-to-date web browser is the
only requirement.
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Project Progress
Confirmation via Open PS for Palm

You can also enter confirmations for activities using a Palm Pilot. After you
have downloaded the activity data from the SAP System to your Palm Pilot,
all the relevant information is available to you, also without a PC or access
to a SAP System. You can transfer your entered confirmation data back to
the SAP System at any time.
Transfer of confirmation data to external systems
Confirmation data can be transferred to different external systems, for
example, PDC systems or Microsoft Access .
Time Sheet
The time sheet is a very comfortable and flexible option for entering project
data. In the time sheet, individual employees confirm the tasks that they have
completed. In addition to the data for the Project System, you can also enter
actual data for the following applications in the user-friendly interface:
Internal Activity Allocation (CO)

Attendance and absence (HR)
Confirmations of Services (MM)
Confirmations of Plant Maintenance Orders (PM)
Confirmation of Service Orders (CS)
Figure 3-43: Confirmation Using the Time Sheet
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Project Progress
You can adapt the appearance of the time sheet to match your requirements.
There is an integrated authorization procedure available for authorizing the
entered data.
Progress Analysis
The progress analysis tool in the Project System is used to compare the planned
and actual progress of a project with the work actually completed. This enables
you to determine the percentage of completion of your project. The system uses
the overall planned costs or the budget to evaluate the work done, meaning that,
in terms of time, evaluation is not dependent on the planned costs or the costs
posted by period in the Controlling (CO) component.
There are many good reasons for using progress analysis:
You can use progress analysis internally for the prompt identification of
schedule and cost variances, enabling you to take appropriate action.
You can also use progress analysis externally to provide the ordering party
with required reports on the value of the work already carried out and on the
execution of the project in terms of keeping to the schedule. The system
generates the appropriate reports automatically, allowing everyone involved
in the project to quickly and easily keep track of its progress. Clear
information and good communication thus become important factors of your
projects success.
You can use project analysis as an objective measuring instrument for
comparing the success of several projects.
As your project proceeds, you can use project progress to access, among other
things, the following information:
Planned and actual project progress as a percentage at a particular point in

time (planned percentage of completion and actual percentage of completion). The percentage of completion for each WBS element, activity or
activity element is determined or estimated using rules based on the project
data.
Value of the planned and actual work at a particular point in time. For the
budgeted cost of work scheduled and budgeted cost of work performed, the
following abbreviations are to be found in the documentation: BCWS budgeted cost of work scheduled and BCWP - budgeted cost of work
performed. The value of the planned or actual work completed is determined
relative to a reference factor (planned costs or overall budget) for the overall
value of the work.
The expected schedule variances
Costs caused by schedule variances
Expected overall costs due to changed project processing
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Project Progress
Figure 3-44: Progress Analysis
You can determine the progress analysis values at any time you choose or
regularly during period-end closing.
The Project System has two standard reports for evaluating progress analysis.
You also have the option of defining individual reports that you can adapt
precisely to your information requirements.
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Project Progress
Milestone Trend Analysis (MTA)

Milestone trend analysis is a simple and clear method for analyzing the dates
in a project and allows you to recognize variances and trends immediately. The
scheduled dates of the milestones that are relevant for the course of a project
are compared at various points in time. Deviations from the planned schedule
can be displayed in tabular form or graphically.
In the graphical form, a triangular MTA chart is used, whose sides are time axes.
The milestone dates are plotted against the report dates.
Figure 3-45: MTA Chart
If the project runs according to plan, the curve remains horizontal. If the project
deviates from the plan, the curve rises (delay) or falls (early completion) with time.
You can call up milestone trend analysis from either the information system or
the project planning board. In the Project Information System you can limit the
number of milestones to be displayed with the usual selection facilities. After
selection you can also limit which milestones and report dates are displayed. In
addition to the current data from the operative project, you can also use data
from a simulation version in the project planning board.
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Projects are complex entities that generate a lot of data. Project team members
require different information based on their role in the project. They expect to
get up-to-date information in order to be able to analyze the project comprehensively. Project controllers want overviews of all the projects for which they
are responsible.
Efficient, Reliable Evaluation
The project information system is an efficient and flexible tool for evaluating
and displaying data. It enables you to keep control over your projects schedule
and evaluate commercial aspects of the project in detail. Reporting in the project
information system ranges from overviews of progress in multiple projects down
to single line items within one activity of a project. It also offers predefined
views covering schedules and milestones, costs, resources and capacities as well
as an integrated structure overview, a hierarchical representation of the entire
project. Everyone involved in the project gets the information they need and are
authorized to see at the click of a button.
Figure 3-46: Overview of the Project Information System

Data Basis
In the project information system you can access:
All current project data

Project version data
Archived data
A combination of the three to perform comparisons
Project versions preserve the state of a project at a single point in time as a snapshot. To determine what has changed as the project proceeds and to measure
project progress, you can compare versions with one another or with the current data for the project.
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By judicious use of the selection options such as dynamic selections, you can
restrict the evaluation to data of particular interest to you to access it more quickly.
Figure 3-47: Integrated Information Systems
If you are interested mainly in the hierarchical setup of your projects, want information on dates and durations of the individual parts, or the structure, the overview is for you. From the structure overview, you can branch to all the reports in
the information system, access transactions for changing or confirming objects
or download to external programs. You can also display all the data graphically.
Structure and Date Controlling
Figure 3-48: Project Structure Overview
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Commercial Controlling
If you are interested in the value flow of a project, the reports for costs, revenues
and finances provide you with an exact overview of the costs, revenues an cash
flow for that project. If you require a more exact analysis of part of a project,
then you can branch from the individual reports right down to the level of
individual items and to individual documents. In multinational projects, you can
monitor the value flow in any currency you require.
Figure 3-49: Hierarchy Cost Reports for Projects

Resource Controlling
Resource reports supply information on:
Work center capacity and load (capacity leveling)

Required materials and their availability
Purchase requisitions and purchase orders and their status
For evaluating projects that require materials planning, the order report provides
you with an overview of the state of production and procurement for all the
assemblies and materials related to a sales order.
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Multiple Project Controlling
As a project controller, you want to follow the value flow for one or many
projects. You can view the same group of projects from various perspectives,
such as from area of responsibility, profit center or cost center viewpoints.
Functions
There are standard reports, which give you an overview of costs, revenues, dates
and other objects of interest. In addition, the information system offers a wide
range of options for creating and formatting your own reports. No knowledge
of programming is necessary. You can create your reports either by copying and
adapting existing ones or by combining components into new reports.

The fast pace and stiff competition in the new economy require you to make
decision quickly. In order to do this, you need data you can rely on. SAP provides most of the information, however often you want to incorporate data from
external sources to create a report.
The solution is the Business Information Warehouse (BW), an independent application environment that draws on both SAP and external sources of information,
summarizes them, selects data, and presents the results in an easy to understand
form (Microsoft Excel user interface). Purchased data from analysis services can
be combined with your internal SAP data to create comprehensive reports.
The Business Information Warehouse guarantees that the information needed
for planning and decisions is available throughout your business and at all
levels - in a form that is easy to use, quick, and user-friendly. It offers a wide
choice of predefined reports that can be accessed by a simple mouse click and
are also internet-capable. You can either use them as provided or as templates
for creating new reports of your own. In addition, the ready-to-work solution
offers a business-oriented online analysis.
Functional and User-Friendly
The Business Information Warehouse is tailored for use in an SAP System

environment making for cost-effective implementations. It takes advantage of
the openness, integration, and metadata concepts of the SAP System. It contains
predefined information models and reports already tailored to meet the
requirements of particular groups of users. However, you can change and adapt
them to suit your requirements.
Ready-to-Work Solution
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The required data is extracted, loaded, and summarized in accordance with your
business process, then made available in a format, which is user friendly, flexible, and individual.
Figure 3-50: Business Information Warehouse Architecture

Customer-Specific Solution
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Data from the Project System is available with Business Information Warehouse
Release 2.0 in InfoCubes. These InfoCubes contain both standard reports that
you can use on a role basis and options for ad-hoc reports. You can select key
figures and characteristics to include in evaluations of your own. You can
combine the data from the Project System with other SAP data such as from
Controlling or with external data from legacy systems. The Business Information
Warehouse is a tool with an almost unlimited range of business reporting options.
Interfaces
Interfaces
SAP has defined open software interfaces to the Project System that enable you to:
Attach and update documents created with word processing software such
as Microsoft Word directly to the project
Download in Hypertext Markup Language (HTML)
Download to PC spreadsheet programs such as Microsoft Excel
Download to database programs such as Microsoft Access
Work offline using uploading and downloading functions to transfer projects
to other project management programs such as Microsoft Project
For plotting network structures on a plotter or printer you can export data
from PS to Graneda, a program that provides extensive functions for printing
and plotting graphics
Transfer confirmations from plant data collections systems directly to update
networks in the Project System
Interface to external project management systems. You can use this interface to:
Exchange data online using remote function call (RFC), Object Link
Enabling (OLE), or OLE Custom Control (OCX) or offline (using ASCII files)
Export data to external programs for further processing Import modified
data back to the SAP System
The external programs can flexibly define the extent of the data. During
data import the same checks run as when working in the system. This
guarantees data consistency in the SAP System.
Trigger business transactions (that is, confirmation, capacity, and availability check) in a SAP System from an external system
Figure 3-51: Interfaces in the Project System
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Interfaces
Business Application Programming Interface (BAPI)

Business Application Programming Interfaces (BAPI) enable you to access
business data and processes in the SAP System from external systems.
Technically speaking they are methods with which data and functions in
SAP Business Objects (project definitions, WBS elements, material, and
networks, for example) can be made available to external users and programs.
Conversely, you can also use BAPIs to call interfaces in external systems.
In the Project System there are three business objects: Project Definition,
Work Breakdown Structure, and Network, with which external systems can
communicate quickly and simply.
Open Project System (Open PS)

Open Project System (Open PS) is a generic name for modern communication
between the Project System and other project management systems or personal
organizers.
Open PS is being developed independently of the standard SAP System release
cycle. It is not part of the SAP System, but is an add-on program for the Project
System. You can download the necessary software together with detailed information on how to install and use the software from the Project System
homepage in SAPNet.
In the first stage of this development you can exchange data between the Project
System and Microsoft Project or the Palm Pilot.
Take Your Projects With You: Open PS for Microsoft Project

Scenarios:
You are on a business trip and have time to draft a new project. You start
to design the structure of the project in Microsoft Project on your laptop.
When you get back to the office, you transfer the project to your SAP
System and incorporate it in your organizational structure.
You are visiting a customer or are on a construction site. You are discussing
a project and decide together to make changes that affect both the structure
of the project and its schedule. You can make these changes immediately
using Microsoft Project.
Back in your office, you compare the two versions of the project and decide
which changes, if any, you want to transfer to the SAP Project System.
Open PS lets you carry out the processes described in these scenarios quickly
and easily.
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Interfaces
There are three options for exchanging data with Microsoft Project in Open PS.
You can:
Transfer a project from Microsoft Project to the Project System

Transfer a project from SAP to Microsoft Project where you can continue
editing it
Synchronize projects in Microsoft Project and the Project System
Open PS for Palm

Scenario:
As a project manager you work often out of the office. Depending on the type
of project, this can mean you spend a lot of time on the customers premises or
on the construction site. Normally, you keep track of the project progress in a
notebook or by using a personal organizer.
Back in the office you transfer these notes manually to the SAP System.
This process is a potential source of errors. Open PS for Palm lets you take you
project with you.
You download the activity work details (such as planned, actual, and forecast work) to your Palm Pilot.
On site you can then confirm activities directly on the Palm. You do not
require access to a SAP System. You can enter the actual work, the degree of
processing, and the remaining work. You can also specify whether the activity
has been finished (final confirmation) and send the confirmation data via
e-mail.
To upload the modified data to the SAP System all you have to do is connect
the Palm Pilot with your PC and press the HotSync button. The data is automatically transferred to the Project System where the project and associated
objects are updated.
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Data Maintenance
How Does the Project System Help You Maintain Your

Data on a Daily Basis?
The highly complex nature of a project leads to volumes of individual data that
are almost impossible to keep track of. Successful project management depends
largely, therefore, on successful data management. The Project System, with its
highly effective functions, also helps you to optimize your daily data maintenance.
Mass Change
During complex and extensive projects it is often necessary to change large
amounts of master data or assignments. The mass change function in the Project
System is an efficient tool with which you can carry out cross-project changes.
Mass change is controlled in a dialog. In just a few steps, this tool replaces the
required field values and profile assignments, as well as particular system
statuses in projects and networks.
Mass change can be carried out online or in the background. You can schedule
the changes as a job to be carried out regularly in the background or outside of
productive time. Using the mass change function in the Project Builder or in the
project planning board, you can quickly and easily carry out changes that relate
to an individual project.
Validation and Substitution

Validation
When you enter data in the Project System, the vast majority of this data is
validated or compared to validation tables and master data. Most input values
automatically undergo standard checks in the Project System before they are
accepted.
Fields that are not checked by the Project System, for example user-specific
fields, can be checked in a professional manner with validation, in which you
define your own checking rules. These rules can be simple Boolean expressions
or very complex logical formulas that are defined with the help of rules, user
exits, and sets.
Substitution
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Whereas with validation, the field contents are checked and the entry values are
transferred when the result of the check is positive, with substitution, fields are
diverted from other fields or are added. You can also use substitution to enter
fixed field values into fields automatically. Similar to validation, there is also a
set of tools that you can use to fill, replace, or add to field contents quickly and
flexibly.
Data Maintenance
Data Archiving
Large volumes of data often lead to bottlenecks that lower system performance
and increase the response time in dialog mode.
Data Archiving provides you with the perfect method for limiting the growth
of this data. It also fulfills the requirements for secure and long-term storage.
You can use Data Archiving to remove application data that you no longer
require in your day-to-day business securely and easily from the database.
Individual data can always be archived separately. When archiving, however,
it is important that individual data is classified in the general business
environment, taking into account the components currently being used and
related processes. Only data from completed business processes should be
archived.
In the Project System, comprehensive checks ensure that the project data to be
archived is consistent and complete, and that only data from completed projects
is archived. For networks, you can also define how long after its creation the
data is to remain in the database before it can be archived.
In this way, data archiving in the Project System allows you to remove business
objects selectively from the database, such as work breakdown structures,
networks, project versions, standard networks and so on. You also have the
option of archiving additional data related to the project, for example, sales
orders and production orders.
The data to be archived is first stored in a file system and can be transferred
from there to another storage system using the Content Management Service
(CMS). For security reasons, the system only deletes data from the database that
could be successfully read from the archive.
In addition to the standard read program, which enables easy access to archived
data, there is also a special retrieval tool in the Archive Information System,
which has easy-to-use search and display functions for archives. The Archive
Information System is seamlessly integrated into the SAP archiving environment.
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SAP Project System

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The Project System: An Integral Part of

The Internet Strategy of SAP AG

Calculating Sales Prices

Asset Life Cycle Management

Program Management enables you to control the entire development process of

Efficient Economic Flexible: Project Management with the

Section 2: The Internet Strategy of SAP AG

Project and Project Management Definition and Clarification of

Has a clear objective

Scope, time, cost, and equality

Stakeholders with differing needs and expectations

Identified requirements (needs) and unidentified requirements

National and International Standards

An Overview of the Project System

Figure 1-1: Product Map of the Project System

Figure 1-2: An Overview of Project Procedure

Research and Development Projects

Sales and Distribution

Successful Implementation in Practice

Figure 1-3: Distribution of Productive Users in Percent

Our massive growth requires us to be able to restructure capacities

The Internet Strategy of SAP AG

The Internet Strategy of SAP AG

The Internet Strategy of SAP AG

to make its internationally-proven applications Internet-enabled, but also is

The Internet Strategy of SAP AG

Cross-Industry Solutions, including mySAP Workplace, mySAP Customer

The Internet Strategy of SAP AG

mySAP Workplace - The Gateway to a World of Information

If you are a joiner, for example, a well-equipped workplace center would

Single Sign-On: Everything at a Glance

Personalized and Role-Based

The Internet Strategy of SAP AG

Advantages of the mySAP Workplace

The Internet Strategy of SAP AG

As a user of mySAP Workplace, you experience a totally new type of workplace

mySAP Collaborative Business Scenarios

The continued globalization of projects means that exchanging information

The Internet Strategy of SAP AG

Figure 2-1: mySAP Business Scenario:

The Internet Strategy of SAP AG

Figure 2-2: Collaborative Engineering and Project Management

In addition to the document management functions mySAP.com provides a

Searching for documents is simplified by using external search engines from

The Internet Strategy of SAP AG

Some scenario examples:

A Project Worker discovers a variance in a project and enters a notification

Figure 3-1: Project System Assignments to Structures in Accounting and Logistics

Figure 3-2: Organizational Structures in Accounting

A business area is a sharply delineated activity or responsibility area in your

A company code is an organizational unit within a client for which a separate

A cost center is an organizational unit within a controlling area. It represents a

An capital investment program is a hierarchical structure of all the planned or

Capital Investment Program

The purchasing organization is an organizational unit that procures materials

Work Breakdown Structure

The work breakdown structure

Figure 3-3: Example of a Work Breakdown Structure (WBS)

Network and Activities

You use activities in networks to plan personnel resources, other capacities,

Figure 3-5: Network Structure