SAP PS (Project System) overview
SAP PS (Project System) is an integrated project management tool used for planning and managing projects. This SAP module supports the entire project lifecycle from planning to invoicing.
SAP PS offers a large panel of functionalities:
Cost and Revenue Planning
Procurement of materials and services
Confirmation of project activities
Project Progress Analysis
Period End Closing
One of the strengths of SAP PS as a Project Management tool compared to other Project Management tools on the market is that it is integrated with other SAP modules as shown in the picture below:
SAP Project System is also integrated with external Project Management tools like Primavera and Microsoft Project.
1. Project Structuring
Before being able to use SAP Project Systems functionalities, coherent and appropriate structures have first to be built in the system. These will constitute de basis for Planning and analyzing all Project relevant data in SAP.
SAP Project System provides two type of structures:
WBS (Work Breakdown Structures)
Each of these two structures provides its own set of functionalities and depending on your business specific requirements you will be able to determine whether you need a WBS Structure, a Network Structure of Both.
The list below provides some important functionalities available when using a Work Breakdown Structure:
Account assignment of documents
Budgeting and budget availability control
Material stock management
Period end closing activities (e.g. Settlement of project costs)
Reporting (e.g. Cost reporting, structure reporting)
Network structures provide functionalities such as:
Confirmation of project activities
Material requirement planning
Material procurement and delivery
External procurement of services
Period end closing activities (e.g. Settlement of network costs)
Based on my experience, there are multiple ways of structuring a project and it all comes down to your business requirements. Defining the project structure in SAP PS is one the most important steps in setting up the PS module as everything will depend on this structure, so this is something that should be carefully analyzed during the Blueprint phase.
Once the structure is mapped we can start the planning process.
2. Time Scheduling
Time scheduling in SAP PS depends on whether we are using networks or not.
Scheduling with WBS Elements:
This is a manual process as we will need to enter our planned dates manually on each WBS Element.
WBS Elements do not have relationships so changing a date on a WBS Element in the structure will not cause the planned dates of other WBS elements on the same level to be shifted.
Scheduling with networks:
Planned dates when using scheduling with networks are calculated automatically by the system.
A prerequisite for this is to set-up the relationships between the network activities. The relationship type specifies how the network activities are linked together:
Start - Start (SS) Relationship: Relationship between the start of one activity and the start of its successor.
Start - Finish (SF) Relationship: Relationship between the start of one activity and the finish of its successor.
Finish - Start (FS) Relationship: Relationship between the finish of one activity and the start of its successor.
Finish - Finish (FF) Relationship: Relationship between the finish of one activity and the finish of its successor.
In SAP PS, scheduling is always done both in forward and backward direction. This process generates respectively the earliest and latest dates.
The main tool used in SAP PS to schedule a project is called the Planning board (Transaction CJ2B), this tool displays the project Gantt chart and allows to modify the project dates, project master data and a large set of options. This tool is also accessible from other transactions such as the project builder (CJ20N).
3. Cost Planning
Costs can be planned for a project in SAP PS using two techniques :
Manual cost planning in the WBS (4 methods) :
- Overall planning where you enter costs for each WBS element manually. Figures can be broken down by fiscal year.
- Detailed planning which is both cost element and period based.
- Unit costing, using a profile to enter quantities (materials, internal activities, external services, ...) for each WBS element. This type of planning in cost element based.
- Easy cost planning offers an easy-to-use tool to plan costs by costs elements in a quantity structure.
Automatic cost planning using networks and assigned orders
In Cost planning using networks, costs are automatically calculated based on the resource requirements identifies for network activities and operations. This type of planning has the following advantages :
- The resulting plan data can be copied to new projects.
- If parts of the project are rescheduled, cost planning is shifted automatically with activities.
- Costs for network activities are planned by cost element and period
Planned costs of assigned orders :
WBS elements identified as account assignment can also be assigned orders other than networks such as Internal orders, service and maintenance orders or production orders.
The assignment to the WBS elements can be stored manually in the order or created automatically.
A plant maintenance order can derive the assignment to a WBS element from the functional location. The prerequisite to this being that the WBS element is already stored in this functional location.
Production orders referencing project stocks are automatically assigned to the respective stock-holding WBS elements.
Depending on the order category, different options for cost planning are available. Internal orders use the same forms of cost planning as WBS elements. Planned costs for maintenance and production orders are calculated in a similar way as the planned costs of networks.
Planning statistical key figures :
Statistical key figures (SKF) are statistically measurable values which can be applied to projects, cost centers, profit centers, internal orders or business processes. In the Project System module they allow to monitor specific units, such as mileage spent, number of project team members, etc...
The actual planning process for SKF is similar to detailed cost planning
4. Revenue Planning
Manual revenue planning :
The following forms of manual revenue planning are available in Project System :
Hierarchical revenue planning :
This type of planning enables revenue to be planned by WBS billing element and year. A distribution of revenues to individual periods for a fiscal year is not possible in this type of revenue panning.
Detailed revenue planning :
This type of revenue planning enables revenue planning by revenue element for each WBS billing element. Revenue values are assigned to a period within a fiscal year. Values can be entered for each period for each fiscal year or on annual basis and distributed to the appropriate fiscal year periods.
Billing plan :
A billing plan is used to plan the dates on which payment requests or invoices affecting sales are sent to customers.
Planned revenues are recorded in the revenue element that has been defined in the planning profile.
Billing plans for WBS elements can be assigned to billing elements of a project in every processing transaction of work breakdown structures. They can also be implemented in simulation versions.
Billing plans can also be created in the Sales and Distribution module for customer quotations or sales order items.
Planned data of the billing plan is automatically updated to revenue planning of the assigned WBS billing element. This is possible by enabling the update of data from quotations or orders in the planning profile of the project.
Sales pricing :
This is a PS functionality that enables the determination of the price for work to be performed during the project. It is based on the project planning data.
Sales pricing data can be stored as an SD quotation or transferred to a billing plan in the project.
If required, multiple quotation can be created based on sales pricing.
5. Material Planning
Material assignment :
Materials can be assigned to a project in SAP PS is the following ways :
Manual assignment :
Manual assignment of material components to network activities via network maintenance transactions such as CN22 or CJ20N (Project Builder).
BOM transfer :
WBS BOMs can be created based on material BOMs and transferred to projects using the BOM transfer transaction.
The logical link between a BOM component and a network activity is called a "reference point". This is used to ensure the correct automatic assignment of a material component to the corresponding network activity.
From the Internet Catalog :
The OCI Interface can be used for manual assignment of material components. The tabular overview of the material components of an activity is used to call an external catalog for selecting the materials.
This catalog can be company based (Intranet) or vendor based (via Internet).
Project stock :
Usage of project stock of can be defined in the project profile and changed on the project definition level before initial save.
Project Stock is a special stock segment assigned to a WBS element where inventory is kept separate from other stock segments, similar to blocked stock and unrestricted stock. Plant Stock is inventory that is not assigned to a WBS stock segment and can be used by any order.
Tree options are available for project stock :
No Project Stock :
In this case, no individual stock segments are created for that particular project.
Materials are stored in the Plant stock.
Non-Valuated project stock :
When using non-valuated project stock, a separate stock segment is created for one or more WBS elements for that project. Material movements referencing a non-valuated project stock are not valuated. This means that no actual costs are posted on the network activity and no posting are made in financial accounting.
Non-Valuated project stock is immediately charged to the WBS at Good Receipt. Only the quantity is held in inventory without value. When Non-Valuated Project Stock is moved only the quantity is moved, the value has already been posted to the WBS.
Valuated project stock :
Valuated project stock is also held in separate stock segments as is the case for non-valuated project stock. The difference here is that this stock is held both in quantity and value. Stock is held in inventory on the Balance Sheet. When Valuated Project Stock is moved it's value moves with it.
Requirements grouping :
There are various ways of grouping requirements :
Group requirements within a project (The easiest way is "Automatic requirements grouping").
Group requirements from various projects in one or more projects.
Group all components of a WBS element in one WBS element. Components are assigned to activities, which are then assigned to WBS elements and then grouped.
Group the components of a WBS element to various WBS elements according to the MRP group of the components.
In SAP Project System, Budgeting enables the monitoring of assigned funds and prevent budget overruns.
The approved cost structure for executing a project is documented by distributing the budget to the WBS elements of this project. This typically occurs during the approval phase which means before the effective start of the project execution phase.
Project reporting in SAP PS allows for the evaluation of the budget values together with the planned and actual costs.
Budgets can only be assigned to WBS elements in the PS module. Networks cannot be budgeted but costs assigned to these networks or network activities are however considered during the availability control.
Budgeting functions in SAP :
Original Budget :
An original budget can be maintained for a project in SAP PS via transaction CJ30. A budget can be defined as an overall budget or distributed by year. This can be configured int the budget profile.
Budget Updates :
Budget updates are used to change the project budget. A distinction is made between budget supplements, budget returns and budget transfers.
The advantage of using budget updates instead of changing the original budget is that the original budget remains unchanged. This makes it possible to compare the original budget with the current budget of the project.
A Budget supplement is an increase in the project budget. There are 2 transactions for budget supplements; CJ36 and CJ37.
CJ37 makes it possible to add budget as long as there is still distributable budget available. CJ36 adds to the existing budget and so increases the total budget of the project.
Budget returns are used to reduce the current budget. You can use transactions CJ35 and CJ38 to post budget returns.
Budget transfers are used to transfer budget from a WBS Element to another WBS Element. Transfer between differents projects is possible.
Budget Release :
This is an additional step that can be executed to authorize the budget for a project. The corresponding transaction for budget release is CJ32.
If you decide to use this functionality you will have an additional step to carry out before executing a project.
Budget Carry-forward :
Budget carry-forward provides the option to transfer a budget that was not consumed for a project within a fiscal year into the following fiscal year. This is done with transaction CJCO.
Availability Control :
Availability control in the budgeting process within SAP PS checks the budget vs the planned, commitments and actual costs. This provides the system with the functionality of preventing budget overruns before they occur. Various configuration options are available to tailor the behavior of the availability control process to particular business requirements.
7. Material Procurement
The SAP PS module is integrated with MM through the usage of networks. This allows automatic creation of purchasing data (Reservations and purchase requisitions) in logistics (MM module) in order to fulfill the requirements for the project.
Various processes are available as detailed below:
Direct procurement for Non-Stock items:
Material with Item Category “N – Non Stock” are procured directly by the network activity. Purchase requisitions are created for these components. When the goods are received, they are posted directly to the activity and do not go through the stock.
When using direct procurement with item category “N”. Two procurement types are possible:
Purchase requisition for the network
Procurement via MRP (Material Requirements Planning) for Stock items:
Materials with Item Category “L – Stock Item” are procured using Requirements planning. When saving, the system creates a reservation for the required material.
The MRP is used to ensure material availability by monitoring the stocks and creating procurement proposals for purchasing and production.
The procurement element for requirements planning is a planned order, or for external procurement a purchase requisition.
Advance procurement is used for critical components with long and unreliable delivery times. These components need to be purchased at an early stage of the project. Even before the creation of the network activities.
This preliminary procurement can only be used with sales order or project stock.
Two scenarios are possible with advance procurement:
Planned independent requirements :
This is used for assemblies that need to be produced well in advance of consumption.
The MRP run generates a planned order for this type of requirement which leads to a production process. The material is delivered to stock where it will be consumed by the final network activity.
Preliminary purchase requisition :
This is used for assemblies that need to be ordered well in advance of consumption.
The system generates a purchase requisition which leads to a purchasing process. The material is delivered to the stock and is later consumed by the final network activity.