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Project Cost Planning and Forecasting Solutions

SAP Project Systems (PS)- Gap Analysis


SAP PS principle functionality is financial cost collecting PS does not service core PM processes/activities Exception analysis is dis-functional and problematic Project cost forecasting, monitoring and progress reporting analysis is performed in excel sheets then manually entered back to SAP PS Month end reporting process is time consuming and error prone No historical project month end records maintained and accessible No single interface to manage projects (users must run many transactions to update and see results) PS application requires add-on solution to be efficient

SAP PS is outside of Project Management lifecycle


Plan Costs & Estimates

Consolidated Project Reporting

Estimating

Plan Costs

Actual cost

Actual Postings Payments G/L

..

..

Scheduling
As a result of functional gaps Project System in SAP is out of project management lifecycle

Actual costs

Cost Forecasts Progress Analysis

Portfolio and Project Management Process


Strategic & Operational Portfolio Management (RPM)
Initiation Long term Balancing Planning Execution Monitoring

Business Intelligence

Short term

Project management
Planning Execution Monitoring Forecasting

Corporate Services
Financials & Controlling Project Accounting Procurement Time recording Human Resources

Reporting: Financials & Resources on Portfolio, Program and Project level

Project Management Lifecycle


Execution

Estimating Planning Budgeting

..

Effective Project Management

..

Reporting Analysis Settlement

Forecasting

Monitoring

Cost Planning Budget approval Dates Scheduling Plan Cost Distribution

Cost Planning
Network Costing
Version: 000

Easy Cost Planning


Version: N01

SAP Project Planning Board MS Project ( Primavera)

Version: N03

or

Version: N02

Cost Plan

Dates Plan

Automatic distribution of planned costs

Plan Cost Distribution

Feb-12

Mar-12

Apr-12

Jun-12

Jul-12

Aug-12

Sept-12

Easy Cost Planning


as an alternative to standard Network Costing

Create cost plan using ECP on WBS or network activities

Easy Cost Planning is one screen transaction where you can view, create and change project plan costs You can call ECP from Project Builder You can create cost plan on multiple costing versions When you change cost plan values the total values updated immediately You can create cost plan using formtemplates You can generate cost plan in ECP from external estimating systems

Plan multiple cost types on the same network activity (e.g. Project manager, Engineer, Draftsman, Materials etc.). No need to create additional network activities or activity elements See your project total plan cost plan right away

Cost Planning: Budget Approval


Version: 000

Version: N01 Version: N02 Version: N03

Cost Plan

Cost Plan created in Easy Cost Planning, Network Costing etc. Selected plan cost version can be copied to Original Budget version and locked for changes. Selected plan cost can be converted to Forecast version to generate initial Cost To Complete. Forecast version represents project rolling forecasts and can be changed at any time.

Approve Original Budget $


Original Budget
Version: BDG

Feb-12

Mar-12

Apr-12

Jun-12

Jul-12

Aug-12

Sept-12

$
Forecast To Complete
Version: FST

Create Initial Forecasts

Feb-12

Mar-12

Apr-12

Jun-12

Jul-12

Aug-12

Sept-12

Project Management Lifecycle


Execution

Estimating Planning Budgeting

..

Effective Project Management

..

Reporting Analysis Settlement

Forecasting

Monitoring

Procurement Time Sheets Progress assessment Cost re-planning (forecasting)

Project Actual Costs flow


Project
Time sheets

Expenses & other costs


SubContracted Services

Equipment & Materials Direct

Material Consumption from stock

Integrated Project Management in SAP


Project Reporting Profit Take (Result Analysis) Dashboard reporting Portfolio Planning

Monitoring Forecasting

Reporting Analysis

Project Manager Workbench KPIs and Exception Monitoring Cost & Profitability Forecasting Cost To Complete distribution Drilldown reporting

Planning Execution
Project Builder

Cost & Revenue Planning

Project Dates Scheduling

Procurement, Time Sheets Invoicing, Billing

Project Variations

Project Manager Workbench: integrated costing information


Open Project Automatically recalculate Cost to Complete Calculate Overheads on Cost To Complete Distribute Cost To Complete including OH Recalculate Project Estimated Cost at Completion Display information on integrated screen Manually change Cost To Complete

A new user experience in SAP PS Combines several transactions in one screen Intuitive navigation Display, Change, Refresh and drill down Dynamic and real-time integration with ECC

Save Changes

ePM Workbench: List View and Project KPIs

Project KPIs are presented in a separate tab KPIs are grouped by COST and REVENUE Revenue KPIs appears only for billing WBS element

Project KPIs
Estimated Cost at Completion = Actual Costs + Commitments + Cost To Complete Current Budget including Variations Cost To Complete

Original Cost Plan Estimate

Budget Deficit = Current Budget Estimated at Completion If + it is under the budget If - it is over the budget

ePM: Cost and Work To Complete automatic recalculation

Noveco ePM Workbench automatically reduces Cost To Complete from actual costs and purchasing commitments This cuts the time needed to prepare project cost forecasts at month-end

ePM: Project Manager Workbench

Detailed cost breakdown for selected project element

ePM: Project Manager Workbench

Exceptions are calculated on the basis of the latest Estimated Cost at Completion (EAC) vs Current Budget

Periodic view of Project Finances

Review Period breakdown of Budget, Actuals and Costs To Complete, Revenues by project object (WBS, NWA) and cost element

Periodic view of Project Finances


Revenue Plan broken by periods integrated with Sales Order contract value and project milestone billing schedule

Remaining Cost To Complete (CTC) is always automatically distributed in the future by Noveco Forecasting Workbench. CTC cannot be negative and cannot stay in the past

Cost Planning: Actual Costs and Forecasts


Purchase Orders Time sheets Material & Services

Actual Costs posted to project Forecast Cost To Complete are automatically reduced and redistributed for the remaining duration

Cost Allocation

Past Auto-update forecast to complete

Actual Costs
Feb-12 Mar-12 Apr-12 May-12 Mar-12 Apr-12 May-12

future

Cost To Complete
Feb-12 Mar-12 Apr-12 May-12 Mar-12 Apr-12 May-12

ePM Workbench: Manual Forecasting

You can manually change Cost and Work To Complete. New values are automatically distributed according to the latest dates schedule set in WBS or NWA New Estimated Costs at Completion (EAC) are re-calculated and compared with Current Budget. New exceptions are displayed.

Read current dates schedule

Costs To Complete automatically distributed $ future

Apr-12

May-12

Mar-12

Apr-12

May-12

Manual Cost Distribution: Estimate, CTC, Commitments

You can manually define flexible (non-equal) cost distribution patterns according to your projects schedule. This way you can distribute Estimated Costs, Cost To Complete, Purchasing Commitments directly in the Workbench

Project Financials monthly snapshot


Forecast history tracking is fully automatic; it does not require version copy and therefore is not limited to project duration

Current: September 2012

No version copy!!

Project Management Lifecycle


Execution

Estimating Planning Budgeting

..

Effective Project Management

..

Reporting Analysis Settlement

Forecasting

Monitoring

Project Reporting Program Reporting Analysis Long Term planning and forecasting

Project Report: example

You can compare current Estimated Cost At Completion (EAC) vs. EAC from any other months in a past without a need to select special period cost version. You can generate a report to demonstrate EAC dynamics over period of time since project began.

Integrated Company view


Detailed project management information produced and managed in ECC provides a solid foundation for analytical program reports in PPM or IM

Company Program and Portfolio Management

Set Strategy

Strategy analysis

Corporate Services and day-to-day business operations

Projects Execution

Integrated Project Management

Supported Project Structures

Option 1: WBS for Cost Planning, Execution and Forecasting


Construction project

Engineering & Design


Drafting Structural Engineering

Construction
Construction worker Materials Sub-contracted services

WBS Hierarchy only (w/o Network Activities) WBS used for cost planning, budgeting, cost forecasting Actual costs, time confirmation and Purchasing Commitments posted to WBS elements Cost To Complete are calculated and manually updated on WBS elements

Option 2: WBS as Planning Element for Cost Planning and Forecasting


Construction project
Drafting Structural Engineering Construction worker Materials Sub-contracted services

Engineering

Construction

WBS marked as Planning element used for cost planning, budgeting, cost forecasting. Actual costs, time confirmation and Purchasing Commitments posted to lower WBS You can also post actual costs to NWA, PM/CS orders as well if they are part of the structure (see options 3, 5 and 6 below) All actuals and commitments are rolled up to Planning WBS element. Cost To Complete are calculated, distributed and manually updated Using this structure you can plan and execute work packages w/o going have to plan each sub-package

Option 3: WBS for Cost Planning and Forecasting; NWA for Execution
Construction project

Engineering & Design


Drafting Structural Engineering Design Drafting

Engineering

WBS and Network structure WBS used for cost planning, budgeting, cost forecasting Network Activities used for scheduling, resource planning, collecting actual costs, procurement Cost To Complete are calculated and manually updated on WBS element

Option 4: NWA for Planning, Execution and Forecasting


Construction project

Engineering & Design

Drafting

Engineering

Construction
Earth moving Construction

WBS and Network structure Network Activities used for cost planning, budgeting, cost forecasting Network Activities used for scheduling, resource planning, collecting actual costs, procurement, time confirmation Cost To Complete are calculated and manually updated on Network Activities

Option 5: NWA for Cost Planning and Forecasting, Orders for Execution
Construction project

Engineering & Design

Drafting

Engineering

Construction
Earth moving Construction

WBS, Network and PM/CS Order structure Network Activities used for scheduling, cost planning, budgeting, cost forecasting Network Activities and PM/CS orders resource planning, collecting actual costs, procurement, time confirmation

Option 6: WBS for Cost Planning and Forecasting, Orders for Execution
Maintenance Project

Pump Maintenance
Engineering Electrical Engineering

Electrical works

Mechanical works

WBS and PM/CS Order structure WBS used for cost planning, budgeting, cost forecasting PM/CS orders resource planning, collecting actual costs, procurement, time confirmation Cost To Complete are calculated and manually updated on WBS

Variation Management process


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

Create variation Estimate variation costs Assign to project elements (WBS, NWA) Approve Automatically update project forecasts and current budget Description
Labour Plant hire Equipment

Cost Element
630000 415000 550000

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

Variation PEND

Variation APPR

BUDGET

AC

AC

BUDGET

EAC

CTC

EAC

CTC

VAR

VAR

Create Project variation

Variation Drill down reports


In the Workbench you can view total Variation value and number of approved and non-approved variation and drill down into variation report

New Variation Manager Workbench (under development)

Revenue Variation items

Cost Variation items

New Variation Management will replace PS Claims as an user interface and will add new functionality (e.g. Revenue Variation)

Information Flow
Strategic Planning

Program Portfolio Planning PS Information System

Company Strategy Planning

Analysis, Resourcing Reports

Result Analysis

Resource Planning

Business Intelligence

ePM Variation management

ePM Project Forecasting

Monitoring & Forecasting

Project Manager Workbench with KPI view Automatic Forecasting Manual adjustment of CTC or Work TC Problem Focused Navigation Exception and drill down reporting Integrated variations into cost forecast Forecast history

Execution

Estimation Budget values

Time Sheets, Invoices Actual Costs

Sales Orders Revenue

Purchase Orders, Commitments

Variations

Transactional System

ePM Project Cost Forecasting and Variation Management


Project Manager Workbench: User Experience
A new user experience in SAP Project System Replaces several steps/transactions by one screen Intuitive and Easy navigation. Quick identification of problem areas via exception traffic lights Provides one central place to review KPIs, update forecasts, execute analytical and drill down reports Context drill-down reports on Purchase Orders, Actual Costs, Confirmations, Open Commitments, Variations No modifications, no custom tables, instant and seamless integration with SAP ECC (e.g. Project Builder, PS Info System, MM, PM, FI/CO etc.)

non-transactional

Solution Concept: Noveco Cost Forecasting functionality


Project Manager Workbench: Cost Forecasting Functionality Auto recalculation of project Cost To Complete from actual costs and commitments with automatic re-scheduling of cost to complete over remaining duration User can manually adjust remaining Cost and Work To Complete Change Cost To Complete on WBS and/or Network Activity Multi-level Cost To Complete management utilizing planning level concept for multi-tier project structures allowing integration of work orders (SC/PM and PP) into project cost forecasting Period sensitive Cost Forecasting using planning period, designed for month end processes Automatic Cost Forecasting history recording (w/o need to version copy) Use any cost plan as the basis for cost forecast, including Easy Cost Planning Instant Integration of cost forecasts with Resource Planning, PS Info System, Project Result Analysis

Business Value of integrated project planning and forecasting in SAP


Greater information transparency Control your project management lifecycle in one central integrated SAP ECC system: no third-party software, no spreadsheets Accelerates ROI on the system implementation overall and project system in particular Reduce information turnaround cycle Reduce operational costs of Program & Project Management Reduce operational costs of support systems Greater integrity, consistency and audibility of project costing information A centralised SAP project repository that integrates information from internal company groups : Planning, Engineering & Design, Financial control, Contracts & Procurement, Project & Construction management One Vision of the truth Improved process efficiency and knowledge integrity Streamlined standard business processes Common methodology producing consistent project information stored in a single repository Business process efficiency; consistent information improves decision making by reducing errors and ambiguity in the information

For more information visit Noveco Systems on


web:www.noveco.com.au email: info@noveco.com.au