207669744 FI Integration

Gerald B. Steele Principal Consultant, SAP America, Inc.

Financial

Integration in PPM

Introduction to Financial Integration

Where is the Financial Data-Overview

Project Systems ECC 6.0

cProjects 4.0

xRPM 4.0

Questions & Limitations

Financial

Integration in PPM

SAP AG 2006, Title of Presentation / Speaker Name / 3

Business Case #1 PS

Business case description A mid-market Pharmaceutical company decides they need a better integrated tool to manage their R&D

projects.

Their requirements included:

Resource planning along a discrete curve over a long period of time.

Detailed cost planning for external partners with procurement process. This includes multi-country/multi-currency highly regulated procurement

and invoice postings.

Use of settlement to move costs to multiple receivers based on type fo costs.

G/L for R&D costs, CCtr for clinical trials costs, PCA for other costs.

Extensive use of Graphics to build and manage project structures.

Use of CATS to enter time against projects for every employee in the R&D organization.

In this case, PS was a better fit as it best met the demands of the

customer to integrate HR, FI/CO, MM, and PCA.


Business Case #1 PS

Chose to use Integrated Planning on WBS elements due to requirement

to discretely plan resource across extensive duration. They also chose

to use the Project Planning Board to manage ALL aspects of their

Project Structure Planning and utilize WBS Cost planning to manage

their resource planning against cost centers.

Summary:

This Pharma customer is live with PS and most of the ERP modules for

their R&D organization.

This Pharma customer implemented PS for the purpose of integrating their financial and procurement tools with their project management tool.

They utilize integrated planning with CO to get a better view of their required resource load over time across projects.


Business Case #2 xRPM

Business case description Customer uses PS in their R&D organization and MS Project in their IT organization. They do not have

a solution to manage ANY portfolio data.

They have the need to view and manage their IT portfolio across their

enterprise. Because they currently use MS Project for IT projects and

will want to manage their entire project portfolio, we proposed using

xRPM.

Questions regarding this decision surrounded the long-term vision of

portfolio management. Data origin (where the data comes from:

Project structures (MS Project, Artemis, Plan View, Primavera, etc)

Resources (MS Project, PeopleSoft/Oracle, SAP, etc)

Costs (MS Project, Primavera, Oracle, SAP, etc)

The use of xRPM allows this customer to continue using their existing

project management tools while providing the capability to add

additional tools to manage the enterprise portfolio as they determine

their portfolio design.


Introduction to Project Financial Integration

A key differentiator in the SAP tools for Project & Portfolio

Management (PPM) is the integration into the back-end Financial

and Controlling systems.

This functionality eliminates the need to enter data into multiple

systems and therefore maintains the official system of record.

All of the PPM tools SAP offers have this functionality.

The SAP Portfolio tool, xRPM, also provides connectivity from other

back-end Financial Management, Human Resources, and Project

Management tools to provide greater flexibility across the

Enterprise portfolio.




cProjects 4.0

xRPM 4.0


Financial

Integration in PPM


Where is the Financial Data

In the world of PPM tools such as Project Systems (PS) in ECC,

cProjects 4.0, or xRPM, neither costs nor revenues originate via

direct transactions. As such, costs are moved into the PPM tools PS, cProjects, and xRPM from other parts of the system such as

Purchasing, Goods Movements, Sales Document Billings, Labor

Confirmations, etc.

The following slide demonstrates how labor costs are generated

and stored in the Organizational Breakdown Structure (OBS) and then moved to the project (PS) via labor confirmations and later off

the project via settlement.

Direct posting to the project occurs when goods receipt from a PO

is executed, an invoice is posted, or a goods issue occurs.

Revenue is posted to a project via a customer invoice (billing)

posting.


Cost Center

OBS Work Centers

Dollars Activity Types/

Rates

$75/hr

$50/hr

$25/hr

Project

1.1 1.2 1.3

0010

0040

0030

0050

0020

0060

Cost Center Engineering

Craft

Design

10 hrs 100 hrs

20 hrs

5 hrs

1,250

2,500

750

Engineering

1.1

1.2

0020

Design 750

Engineering 250

Craft

0040

2,500

1,000

Airplane

$4,500

Project

$4,500

Asset

Settlement

25 hrs

10 hrs

blue = actual hrs Consumed

red = planned hrs

Where is the Financial Data




cProjects 4.0

xRPM 4.0


Financial

Integration in PPM


Cost Planning in Projects

Overall planning

(hierarchical planning)

Cost planning using

activities/

network costing

E 10h service 1421 E 10h service 1421

F 10h vendor 1000 F 10h vendor 1000

K $5000 ce 466000 K $5000 ce 466000

Cost element planning

400000 150000

415000 75000

400000 180000

415000 80000

600.000

400.000 200.000

Unit Costing

S S

1 1

Easy Cost Planning

I/0099

Projects and Orders

PP CO PM/CS


Network Cost Planning

P P P

0010 (E), 80h, Wctr 2000, AT 1421

0020 (F), 10h, PurcInfo 550000017 0020 (F), 10h, PurcInfo 550000017

0030 (K), CE 466000, $5000 0030 (K), CE 466000, $5000

P - 1 P P - - 1 1

0040 (E), 80h, Wctr 2100, AT 1420 0040 (E), 80h, Wctr 2100, AT 1420

0050 (K), CE 400000, $5000 0050 (K), CE 400000, $5000

0060 (K), CE 417000, $2000 0060 (K), CE 417000, $2000

P - 2 P P - - 2 2

Planned costs

Periods 1 2 3 4 5 6 7 8 9 10 11

Shifting a work

package

Shifting cost

planning automatically

Shifting a work

package

Shifting cost

planning automatically

P P P

P - 1 P - 1

0010 0010

0020 0020

0030 0030

P - 2 P - 2

0040 0040

0050 0050

0060 0060

Project Cost Planning Using Activities

1 1


PS Financial Planning Questions

Do you need multiple CO plans?

Do you need varying levels (detailed vs. lump-sum) of cost planning?

Do you need cash flow planning?

Do you need budgets and/or availability control?

Do you need integrated planning? (PS & CCtr planning)

Do you need more than labor cost planning?

Do you need overhead costing sheets?


Actual Costs on Projects

Y

X

Availability

control

Costs,

Revenues Dates

Integration

AM AM

FI FI CO CO

SD

PM

MM

PP

Payment

data

Resources

HR

PS PS


PS Financial Posting Questions

Do you need Accrual (FI) postings?

Do you need Settlement?

Do you need Internal Order integration for FI/CO control?

Do you need statistical projects?

Do you need Earned Value/Progress Analysis?


Direct Procurement Procured Material Costs on Project

Materials Materials Materials

N

Material procured directly by means of

an activity.

Purchase requisition

Request for quotation

Quotation entry

Vendor selection

Purch . order processing

Purchase monitoring

Invoice verification

Item category

"N" Goods receipt

Actual

costs

Purch . req .

commt for activity

Purch . req .

commt for

activity


PS Procurement

Do you need direct Procurement?

Purchase requisition, purchase order, PCard

Do you need material planning?

Do you need procurement commitment tracking?

Do you need Project Stock?

Do you need GR/IR tracking?


Stock or Make-To-Order (MTO) Procurement

Procurement Steps

Goods issue

Production order

Vendor

1000 Purchase

components

Goods receipt

for purch . order

Production

T - 20620 T - 20620

Production

order

T - 20600

Production

order

T - 20600

4100 4100 4100

T - 20600 T T - - 20600 20600

T - 100##.4 T T - - 100##.4 100##.4

T - 20610 T - 20610 T - 20630 T - 20630

Goods issue

Network activity

(consumption)

Delivery

Production order

T - 100## T T - - 100## 100##


PS Using Production

Do you need production integration?

Do you need to track production costs and WIP in your project?

Do you need ETO/MTO BOM integration with inventory and cost

management?

Do you need Variant Configuration?


Revenue Planning in Projects

Revenues Revenues

Time Time

01 02 03 04 05 06

Sales order without

billing plan

Sales order without

billing plan

Billing

plan

B B

B B

Billing

plan

B B E E - - 1399 1399

E E - - 1399 1399 - - 1 1

E E - - 1399 1399 - - 1 1 - - 1 1

E E - - 1399 1399 - - 1 1 - - 2 2

E E - - 1399 1399 - - 2 2

. .

. .

P

L

N

D

T

O

T

A

L

S

D

D

O

C

M

T

D

I

S

T

R

B

T

Total Total

...

...

...

...

Manual revenue planning Manual revenue planning

B B

Billing

plan

Sales order with

billing plan

Sales order with

billing plan

Billing plan in

WBS element

Billing plan in

WBS element

2000 2000

2001 2001


PS Revenue Integration

Do you need revenue planning?

Manual or automated from Sales Order?

Do you need Results Analysis?

Do you need Profitability Analysis & reporting?

Do you need Billing?

Resource Related Billing (RRB), Lump Sum, Fixed Price, Progress Payments/Down Payments, Milestone Billing, etc




cProjects 4.0

xRPM 4.0


Financial

Integration in PPM


cProjects: Project Accounting

Project cost controlling using integration to mySAP ERP

Financials and Project System (PS)

Multilevel controlling: cProjects structures can be replicated into

PS structures

Costs can be settled on internal orders or WBS elements

Calculation of project costs based on role demand (plus integration with

Easy Cost Planning in mySAP ERP)


Task:

Link project structure to accounting structure

Solution:

cProjects 4.0

Benefits:

Use SAP Project System for Planned and Actual Costs

Set up Accounting

Project Manager


cProjects 4.0: Multilevel Controlling

Set-up project plan

Execution in time, in scope (and in budget!)

Plan costs and budget

Monitor execution

Project lead Project

controller


Multilevel Controlling 1/2

Functionality

You can flexibly assign WBS Elements as cost collectors to project tasks.

It is also possible to assign multiple Internal Orders.

Different controlling scenarios are available

Assignment objects

WBS Elements

Internal Orders

Assignment types

Manual assignments

Automatic assignments to WBS Elements

Assignment rules

Role based

Task based

Enhancements

Customer-specific scenarios can be executed using the BAdI IAOM_DET_CO_SCENARIO


Multilevel Controlling 2/2

Enables bottom-up planning and top-down budgeting, billing and results analysis (RA) aggregating values and quantities in the

hierarchy

Calculation services to create cost estimates based on the assigned cProjects structure while costs (actual/planned) are stored on the

WBS elements.

Settlement of costs originating from various sources:

Actual costs derived from recorded and confirmed time on cProjects tasks using CATS.

Costs derived from procurement or goods movements

Costs derived from project-related travel.


cProjects 4.0: Multilevel Accounting

Assignment of work breakdown structures (WBS)

cProjects

Structure

PS Structure


Assignment in PS data

A new tab cProjects in the WBS elements sight is coming with ECC 6.0 (ERP 2005)

The assigned cProjects item is shown here.


Time and Expense Recording on cProject-elements

SAP ECC

Controlling

Object (PS/IO)

Billing

Contract

T&E

Pre-Billing

cProject

SAP ECC

Controlling

Object (PS/IO)

Billing

Contract

T&E

Pre-Billing

cProject

Current Integration New Integration Option

T&E on Controlling Object

Manual Update of confirmed days in cProject-tasks

T&E on cProject-task / role from worklist

Confirmed hours / days automatically updated in cProject-task

Costs updated on CO-Object

=> Less process steps and

one world for project team




cProjects 4.0

xRPM 4.0


Financial

Integration in PPM


Task:

Plan Financial Data

Plan Capacities

Solution:

xRPM 4.0

Benefits:

Compare forecasted, planned and actual data

Plan Financial Data

Product

Manager


xRPM FI Integration

Does financial data come from various systems?

SAP and/or others

Does project data come from various systems?

SAP and/or others

Do you need to report on projects that are not yet projects?

Concepts that do not exist in the tactical project management tool




cProjects 4.0

xRPM 4.0

Questions and Limitations

Financial

Integration in PPM


Limitations

Budget control data in PS

Does not get passed on to cProjects

CO Plan version data

Only plan version 0 will get passed in to cProjects or xRPM

cProjects and xRPM do not support multiple CO plan versions

Portfolio project plans

You cannot push project plans from xRPM down to PS or cProjects

CATS and cProjects

While it is true that you can post time to cProjects using CATS, you can only post time against one project per timesheet

Effort required to upload data to xRPM

This effort requires a significant amount of time to execute the extensive number (6-7 programs) of programs required to move data from

cProjects/PS into xRPM


Questions

Documents

207669744 FI Integration