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SAP Project System A ready Reference

Being a beginner in SAP PS is a challenge. As a techie, When I started my ABAP Program in PS

Module, I found a lot of scattered information but there is no article or blog with consolidated
information even on basic terminologies of
SAP PS. This blog is my attempt to provide an insight of basic techno functional aspects and
terminologies of SAP PS to a novice.
In my first blog you will find the important terms of the PS module. I have tried to explain them
with the help of an example. Following this is the next blog SAP Project System A ready
Reference (Part 2) where the technicalities of the same are covered.
The Project System (PS) module of SAP is specifically designed to provide comprehensive and
fully integrated project management functionality for SAP customers. A Project is a complex
undertaking, bringing with it huge data of different type. At the beginning of each project,
whether it involves developing a new product, make-to-order engineering or internal
organization, you need to define and set up the structures necessary to manage your project
and incorporate them into your existing organizations and processes. Before you can run a
project in its entirety, you must first describe the project goals precisely and create a structure
for the project activities to be carried out. A
clear project structure provides a basis for successful project planning, monitoring and control.
Organizational Structures in Project System:
You create and manage your project structure in SAP R/3 Project System, by means of work
breakdown structures and networks. The WBS describes individual phases and functions of a
project. Network contains the individual
project tasks and the dependencies between them in the form of activities and relationships
Some important terms:
Project Definition
Project Definition is general description of the project that you want to manage. It is a
framework laid down for all the objects created within a project. It contains organizational data
that is binding for the entire project.
Work Breakdown Structure (WBS)
WBS is a hierarchical model of the tasks to be performed in the project. It provides overview of
the project and forms basis for the project organization and co-ordination. It shows work, time
and money spent on the project. You can use it to plan dates & costs and allocate budget. The
Work Breakdown Structure can be displayed according to:
o Phase
o Function
o Object
Individual tasks required to carry out the project is called WBS elements.

The network describes project processing. Thus the Network contains instructions on how to
carry out activities in a specific way, in a specific order and in a specific time period. Main
elements of network are activities and relationships. It forms the basis for planning, analyzing
and monitoring time schedules, costs, & resources.
Activities are used to plan project staffing, capacity, material, PRTs, and service requirements.
When activities are assigned to WBS elements, detailed view of costs, dates, and capacities at
WBS element could be obtained. Its a
task in a network which has a defined start and finish. An activity can be broken down into
activity elements.Three categories of activities in the Project System:
o Internal Activities
o External Activities
o General Cost Activities
Activity element
Activity element is an activity which is subordinate to another activity. Activity elements
contain the same information as activities.Three categories of activity elements in the Project
o Work elements
o External Elements
o General Cost Elements
Activity Type
Its a physical measure of activity output of a cost center .e.g. hours, number of units produced,
machine times, production times.
Milestones are the events in the project to which particular importance is attached Or which
trigger predefined functions. In general they indicate transition between different departments
or phases. Milestones are assigned
to activities and WBS elements: In PS milestones are used to:
Trigger predefined functions in network activities.
Carry out earned value analysis.
Determine dates in billing plan for sales orders.
You use relationships to depict chronological and technical dependencies between activities.
The relationship determines the nature of the link between the individual activities:
FS Relationship : An activity does not start until the preceding activity is completed.
SS Relationship : An activity cannot start unless another activity has started.
FF Relationship : An activity cannot be completed until another activity has been completed.
SF Relationship : An activity cannot be completed until another succeeding activity has stared.
It is a part of network control. It documents the state of processing for the network activities
and activity elements. There are two types of confirmations Partial & Final. Confirmations are
used to record:
The work center where the activity was carried out.
The person who carried out this activity.
The yield and scrap produced in an activity.
The actual values for the duration and dates.
As a rule, projects are used to collect and monitor costs, but are not usually the final cost
object. For this reason the costs in atypical project will be settled at the end of the period. To
this end, you store settlement rules in the activity / WBS element requiring settlement. They
contain information on settlement receivers, cost apportionment and control data. Settlement
receivers could be cost centers, G/L accounts. Etc.
The budget is the approved cost structure for an action or project in a particular period.
Budgeting differs from cost plan in that it is binding. In the approval phase you prescribe your
project funds in the form of budget. It is possible to allocate overall and annual budget in
Work Centers
Work center represents the resources responsible for executing an activity. In a work center,
you can enter the available capacity and an operating time. You can arrange the work centers in
a hierarchy for capacity evaluation purposes. Internal activities are assigned to work centers
(resources) to be completed. A work center is a physical unit within a company where an
activity is performed.
Profit Center
It is subdivision of business organization which is set up for internal management control
purposes. Profit centers divide business up on a management basis. The basic aim of profit
center accounting is to present areas of the business as entities operating independently in the
Lots of jargons .let me site an instance of the construction project of a building..
Let say there is a construction company that is going to construct a Multi-Storey building.
The first thing that needs to be created in the system is Project Definition. The entire activity
plan for this project will come under this project definition. Overall budget needs to be
estimated, assigned and get approved for the project. Project timeline needs to be decided.
Project could be then subdivided into separate parts which are actually WBS elements lets say
in this e.g. we have 4 main WBS elements:
1. Land Acquisition
2. Procurement
3. Construction
4. General