PS Function Detail en

Functions in Detail
SAP® Project System

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Contents
Contents
Introduction 1-1
The Project System: An Integral Part of
mySAP Product Lifecycle Management 1-1
Efficient – Economic – Flexible: Project Management with the Project System 1-2
Project and Project Management – Definition and Clarification of Concepts 1-3
An Overview of the Project System 1-6
The Internet Strategy of SAP AG 2-1

mySAP Workplace - The Gateway to a World of Information 2-4
mySAP Collaborative Business Scenarios 2-6
Functions in Detail 3-1

Organizational Structures 3-1
Structures 3-4
Project Definition 3-4
Work Breakdown Structure 3-4
Network and Activities 3-5
Milestones 3-8
Templates 3-9
Simulations 3-10
Editing Tools 3-11
Project Builder 3-11
Project Planning Board 3-12
Documents 3-15
Project-Oriented Material Management 3-16
Material Planning for Projects 3-17
Internal Production 3-18
External Procurement 3-19
Monitoring Dates 3-20
Delivery 3-22
Project-Driven Procurement and Production Management (PROMAN) 3-23
Services and Projects 3-24
Capacities and Personnel Resources 3-25
Capacity Evaluation and Leveling 3-27
Claim Management 3-30
Cost Controlling 3-32
Planning Forms 3-32
Budget Management 3-38
Actual Costs, Commitments, and Cost Forecast 3-41
Contents
Calculating Sales Prices 3-43

Revenues and Earnings 3-45
Forms of Planning 3-45
Project-Related Incoming Orders 3-46
Actual Revenues 3-47
Cash Management 3-49
Cash Flow 3-50
Interest Calculation 3-52
Periodic Processing and Project Closing 3-54
Schedule Manager – Your Tool for Period-End Closing 3-54
Periodic Tasks 3-55
Project Settlement 3-57
Project Progress 3-58
Date Planning 3-58
Scheduling 3-61
Confirmation 3-63
Progress Analysis 3-65
Milestone Trend Analysis (MTA) 3-67
Project Information System 3-68
Business Information Warehouse 3-70
Interfaces 3-72
Business Application Programming Interface (BAPI) 3-73
Open Project System (Open PS) 3-73
How Does the Project System Help You
Maintain Your Data on a Daily Basis? 3-75
Mass Change 3-75
Validation and Substitution 3-75
Data Archiving 3-76
Introduction
Introduction
The Project System:
An Integral Part of mySAP Product Lifecycle Management
Rapid developments in Internet applications present an ever-increasing
challenge for today’s 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 com-
plete product life cycle. In other words, you can monitor all aspects of your
products through all of the phases it undergoes – from design through procure-
ment, production, and sales, to service. In this way, cooperation with custom-
ers 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 life-
cycle, 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 capa-
bilities, 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 compa-
ny’s competitiveness. This is particularly true of companies whose success is
determined from project-oriented business processes.
Your company’s success also depends on employing the right methods, plus
motivating the employees who apply these methods. The effectiveness of the tech-
nical 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 soft-
ware solution to manage multifaceted processes in your projects with even
greater success. Along the way, we will provide you with a comprehensive over-
view 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 Sys-
tem. 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 ef-
ficiently and effectively implement our software solution.
1-2
Introduction
Section 2: The Internet Strategy of SAP AG

This section provides you with information about SAP’s 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
company’s specific structures and how it can optimally support company proc-
esses.
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 require-
ments, 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 organ-
ization.” (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 collabora-
tion and communication between specialists) (ibid., p. 3)
1-3
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 manage-
ment – 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 organ-

izational 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-tech-
nical system that follows particular goals within a defined organizational frame-
work (GPM Handbook, chapter 1.2, p. 11). In this process, the control of differ-
ent individual activities in a project always takes place in relation to the supe-
rior 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:
■ 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)
1-4
Introduction
National and International Standards

Adherence to national and international standards is almost always a prerequi-
site 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 “back-
ground,” which ensures that despite different procedures, approaches, and re-
sults 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. Internation-
al 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 cur-
rently no binding European or international standards. Despite intensified ef-
forts at European level (Comité Européen de Normalisation – CEN) and in-
ternational 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-speak-
ing 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) spe-
cialist terms in the area of network technology. Definitions were finally doc-
umented 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 ini-
tial 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 devel-
oping products. Our products fulfill the appropriate authoritative standards and
contribute to their ongoing development.
1-5
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 busi-
ness processes during project execution. It helps you to reduce routine activi-
ties and speeds up processes.
Comprehensive project management and optimum combination of business

procedures are central to this. The range of functions and the integrated work-
ing 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 indus-

try, 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 require-
ments 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.
1-6
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.
Information System
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 de-
scribed in the graphic.
The range and intensity with which you pursue certain aims with a project de-
pends 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 monitor-
ing dates and resources.
When you use the Project System, the specific requirements underpinning eve-
ry 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
1-7
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 pro-
vide 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 cross-
departmental 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
1-8
Introduction
Implementing the Project System has already given many of our customers the Customer Opinions
assurance of being prepared for the demands of the future. This includes design-
ing 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:
“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.” (Fre-
quentis)
“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 proc-
ess-oriented structures in a flexible way. We have visibly improved
quality in all areas, reduced errors and laid the foundations for a suc-
cessful 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 engi-
neering 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 Verke-
hrstechnik)
“The Project System creates the basis for fast and transparent order processing
that helps us to secure a strong competitive position.” (SchwörerHaus)
1-9
The Internet Strategy of SAP AG
“Today’s 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 struc-
tured, manageable and user-friendly. They are essential for orienting your em-
ployees 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 Redefining SAP AG
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 cross-
company 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
2-1
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 today’s 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 SAP’s 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 user-
friendly 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 people’s expectations of a market leader with the highly successful
EnjoySAP initiative in 1998, both in the area of new media and also “user-
friendliness” – 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 soft-
ware 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-com-
pany processes, as well as reduce ongoing costs and, above all, to fundamen-
tally increase user motivation. The goal was for every employee to take part in
2-2
a company’s business processes. The user interfaces were therefore tailored ex-
actly 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 company’s ability to fulfill your customer’s wishes.
mySAP.com is SAP’s comprehensive e-business platform for the optimal inte-

gration 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 Mar-
ketplace, 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 Chemi-
cals, 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 SAP’s state-of-
the-art Infrastructure and Services offering
2-3
mySAP Workplace - The Gateway to a World of Information

My Personal If you are a “joiner,” for example, a well-equipped workplace center would
mySAP Workplace 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 appli-
cations 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 Each individual user places specific demands on their workplace. This is why
User Interfaces 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:
■ The Project Manager plans, controls, and coordinates the activities in a pro-
ject, 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 plan-
ned and actual costs, the costs and revenues situation, project progress as
regards the schedule, cashflow and so on.
2-4
■ The Project Controller usually has to look after more than one project, which
means that they have completely different requirements to those of a pro-
ject 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 responsi-
ble 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 manager’s
“right-hand” assistant. Depending on how things are organized in the parti-
cular 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 the-
refore 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 sub-
project, ensuring that individual goals are achieved within the predefined
time schedule. They also want to have an overview of the status of a subpro-
ject 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 require-
ments of your users.
A centrally situated and administered server and top-notch security mechanisms Advantages of the mySAP Workplace
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 com-
ponents 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.
2-5
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 doesn’t 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 The continued globalization of projects means that exchanging information
Management (CEP) efficiently between project teams that are in different locations and have diffe-
rent technical requirements is becoming increasingly important. Collaborative
2-6
Engineering and Project Management (CEP) in the Project System enables you
to carry out and represent business processes between your company and ex-
ternal 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 partner’s 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 cont-
aining 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 customer’s 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
Figure 2-1: mySAP Business Scenario: Collabora-
these with the official project plan and loads the final structures and resources tive Engineering & Project Management (CEP)
into the system.
2-7
Figure 2-2: Collaborative Engineering and Project Management
Documents In addition to the document management functions mySAP.com provides a

(Documents@Web) 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
document’s 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 docu- Notifications in a

ment variances in a project and trigger action to resolve these variances. You Project
can create as many notifications as required in an Internet browser, check their
status, and display them again.
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 proces-
sed 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 pro-
cessed are displayed in the Project Worker’s 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 requi-
red 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 that’s just the beginning.
2-9
Organizational Structures
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
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 ful-
fill 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.
3-2
An capital investment program is a hierarchical structure of all the planned or Capital Investment Program
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.
The purchasing organization is an organizational unit that procures materials Purchasing Organization
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.
The purchasing organization is divided into purchasing groups that are responsible Purchasing Group
for particular purchasing activities, for instance purchasing certain materials.
Plants are units within Logistics that split up your enterprise for production, Plant
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. Storage Location
The term “storage location” usually refers to the physical location of the stock.
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 struc-
tures, 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.
Work Breakdown Structure 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 man-
age. 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
Work Breakdown Structure

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 manage-
able 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 WBS Elements
called work breakdown elements (WBS elements). Depending on the phase of
the project, you can further breakdown the work with subordinate WBS ele-
ments.
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 Networks
the sequence in which projects are processed. The main elements of networks
are activities and relationships. Networks form the basis for planning, analyz-
ing, and monitoring time schedules, costs and resources.
You use activities in networks to plan personnel resources, other capacities, Activities
materials, PRTs, and service requirements. You can add detail to your planning
by using subnetworks and activity elements.
3-5
Structures
You can link activities with the work breakdown structure by assigning activi-
ties 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 Relationships

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.”
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:

■ Trigger predefined functions in network activities
■ Determine the percentage of completion (milestone technique in progress
analysis)
Milestone Functions in Networks You can use predefined milestone functions in networks to trigger a sequence
of steps. Examples include:
■ Releasing activities
■ Including standard networks
■ Creating networks and subnetworks
■ Triggering workflow tasks
3-8
Structures
For customer projects, such as in engineer-to-order manufacturing, you usually Milestones Dates in Billing Plans
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.
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 Standard WBS
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.
A standard network can be used as a template for creating a new network or Standard Network
expanding an existing one.
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 partic-
ularly 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, User- Friendly
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.
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 Individual Worklist
for processing your projects: 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 hier-
archical 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 struc-
tures 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 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
3-12
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 Structure of the Project Planning Board
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:
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
■ 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.
3-14
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 main-
tenance orders. Using field selection, you can display details of the mainte-
nance orders.
Documents
Complex projects require extensive documentation and the provision of tech-
nical 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 docu- Document Management
ments 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 via Intranet and Internet guarantees the flow of informa- Project documents in the Intranet
tion to all departments that are involved in a project. In the case of a decentralized and the Internet
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.
In the Project System itself you can also enter large texts for projects (PS texts) 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 cata-
log 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.
3-15
Project-Oriented Material Management

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 procure-
ment 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 As soon as you know which materials are to be acquired and how you want to
Production 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 compo-
nents 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:
■ 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.
3-16
Material Planning for Projects

Complex and dynamic product structures are common in project-oriented Assigning Components
industries. These structures are developed during the project itself, whereby to a Project
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.
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 pro-
curement 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 neces-
sary. This gives you greater flexibility to change details of components.
If your company does not have its own production facilities, some materials are Purchase Requisitions without MRP
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.
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 (MRP) generates independent and dependent
Material Requirements Planning 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 requisi-
tions (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 proc-
essed 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 compo-
nents that are required during production.
■ 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.
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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 advanta- Optimal Batch Size
geous 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.
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 quo-
tation, 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 today’s 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 set-
ting your own pre-defined status which appears as an icon in the dates over-
view. 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 In Sales and Distribution, a delivery can only be created for a material that is
Material Components 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 compo-
nents 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 deliv-
ery 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 Global Material Document Flow
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 doc-
uments in display or change mode and can execute various functions from the
overview screens.
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 After you have created a service activity in the Project System, you can use
Procured Services 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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Capacities and Personnel Resources

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 pre-
defined capacities of different categories.
For planning individual personnel resources (persons, positions, and organiza-

tional 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 You enter an available capacity and an operating time in the work center.
Capacity Requirements 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 gen-
erated 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 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.
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Capacity Evaluation and Leveling

In capacity evaluation the available capacity is compared to the capacity Capacity Evaluation
requirements in either a list or a graphic. The following evaluation methods are
available for capacities:
■ 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 Capacity Evaluation in
either in tabular or graphic form. By using simulation versions you can examine the Project Planning Board
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.
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 an-
alyze 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:

■ 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.
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■ 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 plan- Time Sheet (CATS)
ning as starting values for entering working time at a personal level in the Time
Sheet (CATS).
Figure 3-22: CATS Data Entry View
3-29
Claim Management
Claim Management
In project processing, numerous factors such as delivery problems, price varia-
tions, 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
Costs of a Claim 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.
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Claim Management
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 Status Management
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.
Using the Workflow function enables you to have information distributed Workflow
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.
Claims are integrated into the notification concept of the SAP System, as a special Incorporating the Claim into
type of notification. Notifications form a cross-application component, which you the Notification System
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 company’s business and are described in notifications. In this
context, claims represent the project-specific aspect of notification.
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Cost Controlling
Cost Controlling
A Prerequisite for Project Success Keeping to schedule and monitoring costs are the most important factors gov-
erning the success of many projects. However, cost overruns do occur, particu-
larly 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, sim-
ple, 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, user-
friendly 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 informa-
tion for your project.
If you want to obtain a first cost estimate for your project at this time, cost Cost-Element Independent
element-independent, hierarchical planning is the tool for you. You can choose Structure Planning
whether to plan the costs either on all WBS elements or only on WBS elements
that you have indicated are planning elements.
Figure 3-25: Hierarchy Graphic with Planned Costs
3-33
Claim Management
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
3-34
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 auto-
matically 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 Execution Services
trigger the following processes (called Execution Services) from the costing:
■ 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 allo-
cations, 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 time-
frame 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:
Primary Costs The costs of goods and services procured externally and planned in “externally
processed activities” are calculated by the system, using procurement condi-
tions, 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.
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Cost Controlling
If required, you assign materials, whose costs you plan using “material compo- Material
nents,” to internally and externally processed activities. Materials you have
assigned to an activity are divided into:
■ Inventory-Managed Material
The system creates reservations for inventory-managed material in the ware-
house. 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 General Costs Activities
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.
Figure 3-28: Cost Planning in Networks
Support for Cost Planning

The system can calculate overhead rates automatically, as part of detailed plan- Overhead Calculation
ning, 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.
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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 project’s 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 unfore-
seen 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, addi- Flexible Budget Updates
tional requirements, changes in prices, and so on, may mean you need to up-
date your budget. To help you with this, the Project System includes tools for
entering budget supplements, returns, or transfer for the overall budget or par-
tial 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.
In many businesses, allocating a budget is not the same as actually releasing Releases
the funds. For this reason, the Project System distinguishes between the follow-
ing budget types. Depending on your current situation, you can allocate your
budget as:
■ Current Budget
The current budget is the original budget, as amended by supplements, trans-
fers, 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 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 assign-
ments can exceed the available funds at an early stage.
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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 email to the person responsi-
ble 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 plan-
ning. 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 fore-
cast 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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Calculating Sales Pricing
Calculating Sales Prices

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 Standard Costing Sheet
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.
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
3-43
Calculating Sales Pricing
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.
■ 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.
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Revenues and Earnings

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, ís
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 ele-
ments, or differentiated by revenue element (detailed planning).
Hierarchical revenue planning is usually used in the early stages of long-term, Hierarchical Revenue Planning
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 Detailed Planning
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.
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 automati-
cally takes account of changes to the schedule
Project-Related Incoming Orders

With this function, the system uses sales orders assigned to the project to cal-
culate 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 cal-
culated, 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 com-
pany-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 rele-
vant 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. Partial Billing
In the process, you determine whether dates are scheduled:
■ 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 per- Milestone Billing
centage of the project cost total or with a predefined amount.
The billing plan may contain down payment items as well as the actual billing Down Payments
items. Down payment requests are created as of the dates so flagged in the bill-
ing plan, and are recorded in financial accounting.
The prices for customer-specific services cannot always be defined as fixed Resource-Related Billing
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.
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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 resource-
related 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 mon-
itoring 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 You need information on the expected payment flow, even at the planning stage,
Automatically as the costs of financing your project must be included in the quotation cost-
ing. Project Cash Management in the Project System automatically copies the
following payment relevant data into planning:
■ 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)
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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 Manual Payment Planning
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.
Actual Cash Flow

Payment obligations and payments arise from the various business transactions Project Execution Phase
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.
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 credit-
side 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 project’s 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 cal-
culation 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 capital-
intensive projects.
The system automatically creates a log, containing detailed information on the

postings made in the interest calculation run.
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Periodic Processing and Project Closing

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 sched-
ule and carry out the tasks that must be performed at period-end closings and
project closings.
The Schedule Manager provides of the following features:

■ 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 defini-
tion 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 proc-
ess them again.
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Figure 3-38: Schedule Manager
The Schedule Manager allows you to achieve the best possible runtimes for proc-
esses 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 Profit-
ability 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 com-
plaints)
■ 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 sep-
arate 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, bal-
ance, 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 activ-
ity 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 Simulating Settlement
running a test, you can check data for correctness and completeness, and make
any necessary corrections, before making any actual postings.
When running settlement in either live or test mode, you can have the system Settlement Log
generate statistics and a log. The log shows the receivers to whom debits were
charged, the amounts settled, and a list of any errors.
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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.
■ 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.
Detailing Dates 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.
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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 Scheduling in Networks
dates for executing activities in the network and calculates the capacity
requirements.
Floats provide you with information about time reserves that are available for Floats
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.
In addition, you can define time constraints to adjust scheduling to “fixed” dates Constraints
or basic dates. For example, you can define that a production operation must
be finished on a particular date.
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
Work Breakdown Structure 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 subordi-
nate 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 differ-
ent options in the system for doing this.
Network Scheduling
You can also schedule individual activities that are linked to one another by rela-
tionships but are not assigned to a work breakdown structure. Scheduling deter-
mines 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 sit-
uation 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 deter-
mine 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 process-
ing or the remaining work. As with capacity planning, you can enter confirma-
tions with or without direct relation to an employee.
Precise confirmations are very important for realistic and accurate project plan-
ning. 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 recom-
mended 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 3-44: Confirmation Using the Time Sheet
3-64
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
project’s 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 comp-
letion). 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 3-45: 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 3-46: 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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Project Information System

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 compre-
hensively. 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 project’s 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 prede-
fined 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 3-47: 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 snap-
shot. To determine what has changed as the project proceeds and to measure
project progress, you can compare versions with one another or with the cur-
rent 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 3-48: Integrated Information Systems
If you are interested mainly in the hierarchical setup of your projects, want infor- Structure and Date Controlling
mation on dates and durations of the individual parts, or the structure, the over-
view 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.
Figure 3-49: Project Structure Overview
3-69
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.
There are standard reports, which give you an overview of costs, revenues, and
finances. For more detail simply double-click on the item to drill-down to line
items and individual documents. In multinational projects, you can monitor the
value flow in any currency you like.
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.
Figure 3-50: Hierarchy Cost Reports for Projects
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.
Business Information Warehouse

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 pro-
vides most of the information, however often you want to incorporate data from
external sources to create a report.
3-70
The solution is the Business Information Warehouse (BW), an independent appli-

cation 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 Functional and User-Friendly
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.
The Business Information Warehouse is tailored for use in an SAP System Ready-to-Work Solution
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.
The required data is extracted, loaded, and summarized in accordance with your
business process, then made available in a format, which is user friendly, flex-
ible, and individual.
Figure 3-51: Business Information Warehouse Architecture
Data from the Project System is available with Business Information Warehouse Customer-Specific Solution
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.
3-71
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 availa-
bility check) in a SAP System from an external system
Figure 3-52: Interfaces in the Project System
3-72
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 infor-
mation 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:
A 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.
B 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.
3-73
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 customer’s 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 fore-
cast 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 auto-
matically 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 mainte-
nance.
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

When you enter data in the Project System, the vast majority of this data is Validation
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.
Whereas with validation, the field contents are checked and the entry values are Substitution
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.
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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 environ-
ment.
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69190 Walldorf, Germany
Mailing adress
69189 Walldorf, Germany
SAP information service
Tel. +49 (180) 5 34 34 24
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www.sap.com
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Functions in Detail

SAP® Project System

IBM®, DB2®, OS/2 ®, DB2/6000®, Parallel Sysplex®, MVS/ESA ®, RS/6000®, AIX®,

ORACLE ® is a registered trademark of ORACLE Corporation, California, USA.

HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C®,

SAP, SAP Logo, mySAP.com, mySAP.com Marketplace, mySAP.com Workplace,

Design: SAP Communications Media

The Internet Strategy of SAP AG 2-1

Functions in Detail 3-1

Calculating Sales Prices 3-43

Program Management enables you to control the entire development process of

Efficient – Economic – Flexible: Project Management with the

The fast-pace of the Internet environment provides enormous opportunities and

The brochure is divided into the following sections:

Section 2: The Internet Strategy of SAP AG

Project and Project Management – Definition and Clarification of

We can derive a series of characteristics from this relatively abstract definition

According to DIN 69901, project management is defined as “all leadership tasks,

The term project management is sometimes used to describe an organ-

According to our understanding, however, modern project management cannot

Project Management is the application of knowledge, skills, tools,

■ Scope, time, cost, and equality

National and International Standards

An Overview of the Project System

Figure 1-1: Product Map of the Project System

Comprehensive project management and optimum combination of business

Project System is a total solution that is independent of any particular indus-

Figure 1-2: An Overview of Project Procedure

Successful Implementation in Practice

Figure 1-3: Distribution of Productive Users in Percent

“Our massive growth requires us to be able to restructure capacities

“After six months, we were already seeing an improvement in terms

“The quality of order processing and project controlling has been

The Internet Strategy of SAP AG

“Today’s competitive business models are

This trend is largely a result of the unlimited advantages presented by the

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

By including users in the development process and cooperating with renowned

By developing mySAP.com, SAP has created a new e-business platform from

mySAP.com offers companies a cooperative business management environment

mySAP.com is SAP’s comprehensive e-business platform for the optimal inte-

mySAP Workplace - The Gateway to a World of Information

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

In addition to the continued improvement and simplification of software

mySAP Collaborative Business Scenarios

In addition to a series of cross-company, role-based functions, which are both

The goal of the CEP scenario is to transfer information or knowledge

Figure 2-2: Collaborative Engineering and Project Management

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

Searching for documents is simplified by using external search engines from

A claim is a special type of notification used by project management to docu- Notifications in a

Some scenario examples:

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

Figure 3-2: Organizational Structures in Accounting

Work Breakdown Structure

The work breakdown structure

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

Network and Activities

For tasks that are to be processed by outside contractors, use externally

Figure 3-5: Network Structure

You use relationships to depict chronological and technical dependencies Relationships

Figure 3-6: Relationships

In the Project System, milestones are used to: