Integrating Primavera and SAP at the

Inland Empire Utilities Agency

Stacey D. Scott and John R. Knoke, P.E.
 Integrating Primavera and SAP
at the Inland Empire Utilities Agency
• Introduction

• Background

• Initial State

• Business Blueprint

• Desired State

• Realization

• Results

• Questions?

2 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Introduction
• Stacey D. Scott, MBA, BA
– 10 years experience with financial data and information management,
in banking, manufacturing, and academia
– Six Sigma Black Belt
• John R. Knoke, PE, MBA, BSIE
– 35+ years experience in construction and project management, project
controls, and project information systems development
– Primavera systems user, implementer, and integrator since 1984

3 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Introduction

4 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Introduction
The Agency’s mission is to supply imported drinking water and recycled
water; collect, treat and dispose of wastewater; and provide other utility-
related (renewable electrical energy compost) services to the communities
it serves. The Agency strives to provide these services in a regionally
planned, managed, and cost effective manner.

Key Agency priorities include protecting the public health and environment,
maximizing the recycling of water and organic compost in the service area,
protecting the Chino Groundwater Basin, and maintaining high customer
satisfaction.

5 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Background
• 300+ employees

• ~$120 million annual CIP budget

• 750,000 Service Population, expected to reach to 1,500,000 in ten years

• ~200 projects in CIP master schedule

• Primavera Schedule implemented in January 2005

– ~3,000 activities

– Cost and resource-loaded

– Bi-weekly updates, directly by project managers

– Semi-automated integration of actual costs and actual hours from Agency

accounting system, implemented in July 2005

6 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Background

7 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Background
• 2-Level WBS – consistent with project phasing and Agency accounting
system

• Project schedules developed from a standard 20+ activity template

• Resources divided into two categories

– Labor: Hours and related cost - Agency staff only

– Non-Labor: Cost only - Consultants, Contractors, Materials, Other

8 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Initial State

Annual Budget
Development

Actual Hours
and Costs from
Accounting

Project Managers Progress and

Update Budgets Variance
and Schedules Reports

9 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Initial State
• New projects are developed during the Annual CIP Budgeting process and
added to Primavera
• Actual hours and costs from the Agency’s accounting system are imported
into Primavera bi-weekly, using a semi-automated process. Costs
represented in the accounting system cannot be unambiguously attributed
to specific project activities at the level of detail required by project
managers.
• Project managers update project budgets and schedules bi-weekly
• Schedules, remaining costs, and costs to complete are calculated by
Primavera
• Progress and variance reports are provided to project managers and
Agency management

10 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Business Blueprint
• Agency Wide System Management Project (AWESOME)
implementation process began in the Fall of 2006

• SAP Implementation divided into two Phases

– Phase I – Planned completion July 2007

– Phase II – Planned completion December 2007

11 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Business Blueprint
Blueprint Design Process
Identify current “As-Is” environment (Leads, SMEs, Consultants)
Confirm and describe requirements (Leads, SMEs, Process Owners, Consultants)
Develop and critique “To-Be” environment (Leads, SMEs, Process Owners, Consultants)
Confirm design (Leads, SMEs, Process Owners, Consultants)
Finalize and sign off on blueprint (Steering Committee)
Blueprint Objective
User driven requirements and design
Agency optimization, recognizing needs of individual functions
Design “90%” complete

12 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Business Blueprint
Phase I – AWESOME Project Scope – July 2007
• General Ledger ====Î Primavera interface (import)
• Budget Control ====Î Primavera interface (import)
• Cash Management
• Billing/Accounts Receivable
• Grant Management
• Purchasing & Contract Management
• Inventory
• Project Systems ====Î Primavera interface (export and import)
• Accounts Payable
• Plant Maintenance Management
• Asset Accounting
13 Integrating Primavera and SAP at the Inland Empire Utilities Agency
 Business Blueprint
Phase II – AWESOME Project Scope – December 2007
ƒ Budget Preparation ====Î Primavera interface (TBD)

ƒ Payroll ====Î Primavera interface (import)

ƒ Personnel Administration

ƒ Benefits Administration

ƒ Business Warehouse

14 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Desired State
1. Create Work Breakdown Structure in Primavera to represent hierarchy
of work required to complete project
ƒ Level of detail can be increased during project

2. Identify Project Budget [estimated cost based on resource allocation]

and master data in Primavera
ƒ Overall project budget (estimate at completion) and corresponding
allocation to WBS elements

15 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Desired State
As project details become known…
the WBS is utilized to support the project processes

Project Lifecycle
Budget Project Bid &
Design Construction
Prep Development Award

Create
initial
WBS
Purchase Requisitions
Purchase Orders

Possible Grant Opportunities

Capture Fixed Assets
16 Integrating Primavera and SAP at the Inland Empire Utilities Agency
 Desired State Project Structure (WBS)
Estimate at Completion

3. Synchronize Engineering & Financial

Systems
ƒ Primavera to SAP
Project WBS and estimate at
completion

ƒ SAP to Primavera (system enabled)

Actual costs, encumbrances, earmarks,
and budget amendments

Actual Costs
Encumbrances
Earmarks
Budget Amendments

17 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Realization
• The Agency elected to develop procedures for transferring data between
Primavera and SAP internally . . .
– Data extracted from Primavera via queries on the physical database

– Data imported into Primavera via SQL Server procedures against the SDK

• Data is exchanged between the applications via field-delimited text files

• Three basic interface processes . . .

1. Project WBS/Task structure and dates from Primavera to SAP

2. Project Budgets from SAP to Primavera user-defined-field (for variance

analysis)

3. Project actual hours and costs from SAP to Primavera TASK table

18 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Realization – Development Issues
• Limitations in SAP WBS structures and accounting codes required changes to
Primavera project schedule coding for project numbers; WBS and task codes;
and project codes.
• Loss of some flexibility in Primavera –
– Activity codes fixed to ensure one-to-one match with SAP cost accounts
– Required one-to-one match for project-level data complicates copying schedules,
what-if analysis, etc.

• To simplify accommodation of historical costs, some coding restrictions of the

legacy accounting system were retained in the new integrated system,
potentially limiting future growth.
• Efforts to enhance and simplify the project schedule model lead to challenges in
mapping historical costs; however, corresponding ambiguities for future costs
are minimized.
• These changes necessitated redevelopment of most standard reports.

19 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Results
• SAP-Primavera integration ensures the synchronization of capital project
structures, budgets, and actual costs between various Agency departments.
– Uploading initial (and occasionally modified) project structures from Primavera to
SAP ensures that the project scope, as contemplated by the project manager, is
accurately represented in the financial system.

– By enforcing the allocation of costs to the same structure, both accounting and
the project manager may be assured of controlled and unambiguous correlation
between work performed and value received.

– Utilizing the same allocation of costs should significantly reduce the time required
for actual hours and related costs to be represented in Primavera, increasing
users’ confidence in the information’s timeliness and value.

20 Integrating Primavera and SAP at the Inland Empire Utilities Agency

 Questions?

• Contacts

– Stacey Scott, sscott@ieua.org

– John Knoke, jknoke@pmaconsultants.com

21 Integrating Primavera and SAP at the Inland Empire Utilities Agency