ps to co relationship document

8/16/2019 PS to CO Relationship document

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%ough-cut general cost planning usuall" begins a project and aims to set times andvalues against a wor breadown structure, or at least a listing of what must be done.$he first draft of a wor breadown structure (#1S) can be arranging the list of whatmust be done so that the elements are arranged in seuence (if that is how the" must beperformed). If some elements can be performed in an" order as long the" are all

completed before a particular tas begins, then this can be shown in logical or treediagram form. $he PS-Project S"stem provides graphical help for this purpose.

ach tas in a wor breadown structure is represented in the S!P %&' s"stem as one or more of the following t"pes of #1S elements+

! planning #1S element that contains the planned values for the actual costs

!n account assignment #1S element to which actual costs are posted

! billing #1S element to which revenues are posted

! #1S element can be associated with a specific organi*ational unit, such as a plant or

business area. If "ou do not explicitl" mae this assignment, the PS s"stem uses theorgani*ation data from the project definition.

If a #1S element is associated with a particular piece of euipment or a functionallocation, such as a worplace, "ou can record this as an assignment to the element. $hiscould then be used for plant maintenance according to the scheduled time or woruantit" performed at the location.

!s soon as a plant is identified, the person responsible is identified. 1ut "ou can alsodefine the areas of responsibilit" and the responsible people for the elements of a worbreadown structure. $he s"stem also provides user-defined fields in each #1S elementrecord that "ou can use for "our own purposes.

Performing Detailed Planning

$he details of a project are subject to fine planning, which ma" utili*e cost elementplanning or unit costing methods. /ou ma" use manual entries for critical dates, althoughthe s"stem ma" be able to carr" out automatic detailing of activities if the" have beenused previousl". $he %&' s"stem will loo after scheduling and highlighting of time-criticalactivities as soon as the reuisite data is available.

Coordinating Resorces

S"stem support for coordinating resources is provided b" the following+

Purchase reuisitions and materials reservation plans produced automaticall" undercontrol of the %P-aterial %euirements Planning module.

Inventor" management.

2etwor planning of capacities, materials, operating resources, and services. Particular people defined b" their experience or ualifications can be located through the 3%-3uman %esources application.


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Note

%&' %elease 4.5 provides "ou with the facilit" to specif" a d"namic agent. $hisagent is specified in a master record as an organi*ational object that isauthori*ed to execute a particular worflow tas. 6epending on the tas, theagent can be an organi*ational unit, a user, a job, a position, or a namedemplo"ee.

Sper!ising Projects

S"stem monitoring of materials, capacities, and funds taes place as the project isapproved and executed. aterial availabilit" is checed as soon as "our customer placesan order. 7apacit" planning is supported b" a capacit" planning table that displa"s an"schedule dela"s, bottlenecs, or overloads. /ou can initiate corrective measuresinteractivel" with this displa".

! budget management component supports approved and released project budgets,funds commitments, and assignments to projects. $his component checs the availabilit"of funds and transmits an alarm to the project manager if an" problem is foreseen.

S!P #orflow is integrated with the Project S"stem so that "ou can eep all departments

in touch with the progress of the project and an" changes made to it. $he actual valuesfrom !ccounting, Purchasing, Inventor", and Productions are written directl" to theproject records. /ou can arrange for the values to be assigned to the appropriate #1Selement and to the networ displa" records for such transactions as the following+

Postings

Purchase orders

aterial movements

Production orders

Plant maintenance orders

Closing Projects

Project closing entails the following actions+

%evenues from sales orders are automaticall" written to the project from the S6-Salesand 6istribution application when the" occur. $he interest is calculated as part of theclosing procedure.

%esults are anal"*ed up to a specified date.

Settlement taes place b" settling all or some of the incurred costs to one or morereceivers, such as cost centers, fixed assets, or objects in the financial statement.

6uring the results anal"sis, the reali*ed revenues are compared with the accrued costsup to a specified date. $he outcome of the results anal"sis can be written automaticall"to the profitabilit" anal"sis. !t this time, the s"stem posts values to the appropriatebalance sheet accounts for wors in process, bad debt provisions, and an" otherprovisions "ou have specified.


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$he control panel for the project s"stem is reall" the Project Planning 1oard displa",which the user can configure for each project. $he control panel adopts the standardplanning board graphical s"mbols and is virtuall" unlimited in the number of elementsand the time periods represented.

$he PS information s"stem is provided with open interfaces to icrosoft #ord for #indows

and xcel to enable "ou to perform word processing and spreadsheet operations to anal"*eproject results. /ou can also manage projects in conjunction with icrosoft Project and withcommunication lins that can confirm actual project data.

"sing Different Project #ie$s

#ithin an organi*ation, each functional department loos at a project from a differentpoint of view. ach specialt" ma" need a different selection from the project information.3owever, with an integrated s"stem, when somebod" enters data, ever"one else ma"utili*e it. $he project s"stem can filter out data to suit each t"pe of user.

"sing Sales #ie$

$he sales staff focuses on the customer order and the sales c"cle, from inuir" touotation to sales order, billing, and deliver" notes. 8alues, dates, and uantities areobviousl" important. $he customer is the object of attention. $echnical documents andspecifications could be as important as costings, prices, revenues, and cost elements inaccounting. 7ommercial practice controls inuir" processing, uotations, orderprocessing, deliver" documents, and invoicing. $hese events can be seen in the salesview.

$he wor breadown structure and the networs can easil" portra" the internal andexternal structure of a sales order and can provide "ou with data objects to which "oucan assign planned values as and when the" become available. !ll the pieces can fallinto place automaticall" as soon as the customer places an order, even if the details mustbe added later. /ou can chec the availabilit" of materials immediatel" and mae plansagainst which to monitor material reuirements and stoc levels. $he s"stem enables

"ou to conduct materials reuirements planning and inventor" control for individual salesorders, if necessar".

"sing %anfactring #ie$

anufacturing operates with planned orders and production orders in conjunction withbills of materials, plants, wor center hierarchies, and production schedules. $hese arethe entities of the PP-Production Planning and 7ontrol application with which the projects"stem is full" integrated.

/ou can allocate planned orders and production orders to specific #1S elements or tonetwor-level activities, as appropriate. /ou then have two options. /ou can anal"*e data

from a project view using the project hierarch" and networ activit" cost objects, or "oucan tae a manufacturing approach to anal"*ing data.

$he cost objects of the manufacturing view are taen from the logistics applications.$he" include plants, wor center hierarchies, and production schedules. 7osts and datesare important, but so is the availabilit" of production resources according to thescheduled reuirements. xternal resources ma" have to be emplo"ed.

$he production manager can call for a different format for the project planning boarddispla". $he anal"sis of results might also tae a different la"out from the anal"sis used


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b" the sales view because inputs capacit" planning and costing arise.

7apacities represent the capabilit" of a wor center to perform a specific tas. $he" aredifferentiated into capacit" categories and are arranged hierarchicall". $he same capacit"can be available from more than one wor center.

#hen the project s"stem is in operation, the wor capacities needed b" projects must bescheduled in addition to the other wor going on in the plant. $his integrated function isan important part of production capacit" planning activities.

"sing %aterials %anagement #ie$

$he materials manager must manage vendors and manage inventor". $he projectmanager must meet target dates and sta" within budget. $he PS can support bothinterests in the following wa"s+

aterials with long lead times can be ordered b" preliminar" orders.

aterials reuirements can be processed with strict dates.

Stoc reuired in the project can be monitored at appropriate intervals independentl" of the main inventor" management.

7osts can be subject to continuous updates to maintain accurate values for thecommitment of funds.

0inage occurs through the materials elements of a project to the functions of the -aterial anagement application. $hese include material reuirements planning,inventor" management, and purchasing. In particular, the functions can support theproject s"stem b" carr"ing out the following tass+

Processing inuiries and reuests for uotations

Processing uotations b" vendors

!ssigning prices to vendor uotations

Selecting vendors on price and deliver" performance

Processing purchase orders

Processing goods receipts

8erif"ing vendor invoices

anaging the project inventor" or the general inventor"

$he standard aterial anagement functions enable "ou to inspect the values assignedto the project elements, so "ou can selectivel" focus, for example, on the %P controller,the purchasing organi*ation, or even on the specific storage locations holding the projectmaterials.

It ma" be the practice to manage "our suppl" chain through electronic data interchange


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to include suppliers of "our materials outside "our compan". In such cases, "our projectidentifies the contracts and scheduling agreements and has them built into the worbreadown structure and the networs so that proper control can be exercised.

"sing &inance #ie$

$he control of cash flow is important in project wor because large gains or lossesaccruing on interest pa"ments can seriousl" affect the profitabilit" of the project.Incoming and outgoing pa"ments can be planned manuall" because purchase ordersassigned to projects or down pa"ments negotiated with the customer are documented inthe master records to indicate the pa"ment dates.

$he 79-7ontrolling application maintains a s"stem of commitments that is the euivalentof the :eneral 0edger accounting in financial accounting. ! commitment represents acontract or schedule that is in the planning stage but is not "et represented in financialaccounting. $he commitment provides a method of recording activities that will lead toactual expenditures in the future. $hese anticipated expenditures can be anal"*ed fortheir effects on cost and for their implication on the future financial situation. orexample, a purchase order that is intended to replenish materials at a cost center can be

managed as a commitment in the 79 s"stem. If "ou have materials reserved for aspecific order or project, the" too represent a commitment and can be managed as such.

Incoming pa"ments can be fed automaticall" to the commitment items, but outgoingpa"ments must be planned manuall". $he project s"stem derives such expectedpa"ments automaticall" and writes them to the project on the expected date. /ou caninclude interest calculations in the project plan. $he PS posts the values to the 7ashanagement and orecast module of the financial accounting s"stem.

!ctual pa"ments and down pa"ments from the customer are recorded in the projectrecords. /ou have the option of including the imputed interest value directl" in the projectresult calculation.

"sing Controlling #ie$

$he 79-7ontrolling application maintains a database for controlling purposes that isshared b" all the applications integrated with it. $he controlling database holds planningand actual data that originates in the 79, I, S6, PP, , and PS applications. $hecontroller can view the latest information on such e" activities as the following+

6own pa"ments

Pa"ments

aterial reuirements

%eservations of stoc

xternal processing

In accordance with standard S!P practice, the controlling view of a project can activatefiltering to focus on different areas of responsibilit" in the organi*ation, such ascontrolling departments, controlling areas, overhead allocation structures, and costcenter hierarchies. 9f course, the controller can also focus on project specifics b"referring to the wor breadown structures.


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accounts that monitor maret segments, profit centers, or the business as a whole.Incoming orders for a project can update the totals in profitabilit" anal"sis, and thes"stem can eep trac of an" changes to these orders.

Profit planning for future periods is supported b" data from the project s"stem forecasts.$he profitabilit" anal"sis s"stem automaticall" records the values as soon as transaction

data is posted, such as costs of sales in the income statement or as wor in process inthe balance sheets. 7hapter ?,

$o help "ou become aware of the data architecture of the %&' s"stem, an information

model shows the information objects of all the integrated application software. $his isreferred to as the %&' %eference odel, and it can be accessed directl" or through the1usiness 2avigator presentation tool. $his model not onl" shows "ou what data objectsare available in the %&' s"stem, but it also reveals clearl" how these data objects relateto each other.

/ou can see how "our specific business can be accuratel" represented in the %&' dataobjects. If "ou choose to mae a decision on which functions will be reuired, the %&'1asis s"stem annotates the reference model so that "ou can see what "ou haveselected. $his annotated structure is then referred to as the nterprise 6ata odel(6) of "our implementation and is the principal instrument for controlling how "ours"stem is built. $he standard %&' %eference odel is available for inspection without an"annotations that are specific to "our implementation.

#hen "ou have identified the processes and business control instruments of "ourcompan" in the %eference odel, "ou can be certain that the" will be full" integratedwhen the time comes to run the finished s"stem.

"nderstanding +o$ the PS %odle 's Presented

$he PS-Project S"stem is delivered read" to be configured and customi*ed to fit "ourparticular situation. !n implementation guide (I:) introduces the business functions,

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and a customi*ing menu provides access to the standard settings and technicalrecommendations. /ou set up the %&' PS-Project S"stem in the I:-Implementation:uide itself.

$he %&' PS-Project S"stem maes extensive use of the S!P nterprise 6ata odel tosupport "ou in the definition and management of "our projects. or example, the

standard organi*ational structures in the I-inancial !ccounting module have a strictlogical form. Client in an S!P s"stem refers to the highest level of the organi*ationalstructure. $he owner of the entire corporation is identified as the 7lient and is assigned aclient code between 55@ and ???. 7lient codes 555 and 55; are reserved for use b"S!P. 7lient 55; probabl" is a client created for testing purposes. /ou can also reserve aclient for training purposes. $he transaction data associated with one client cannot betransferred to the transaction records of another. 3owever, the particular design of "ourimplementation as developed in the customi*ing process is represented as customi*ingdata, and this can be transported from one client to another.

!lthough the %&' %eference odel contains onl" one definitive example of each datastructure, a compan" can build an" number of replications into its 6 to represent allthe woring elements that exist.

$he %&' %eference odel is presented through the %&' 1usiness 2avigator, which is aninformation model that can show "ou the software elements of the %&' s"stem andexplain their purpose. $he %&' 1usiness 2avigator offers a component view that detailsthe static structure and functional capabilities of all the software modules. $he processflow views comprise a selection of different process flow configurations that "ou canstud" and cop".

or example, if "ou are looing at the PS-Project S"stem with the %&' 1usiness2avigator, "ou can see how various t"pes of projects can be graphicall" represented andexecuted under control of the standard %&' software. $he displa"s can be presented inan" language for which "our implementation has been configured.

Tip #hen "ou have drafted an operational project in the PS format and have storedit in "our s"stem, "ou can use the %&' 1usiness 2avigator to explore anddocument it.

0ogistics organi*ational structures, for example, follow strict logical definitions. $hemodules in the logistics group are as follows+

S6-Sales and 6istribution

PP-Production Planning

-aterials anagement

P-Plant aintenance

A-Aualit" anagement

1ecause all applications are integrated with the I-inancial !ccounting module, thelogistics structures must map to the financial structures. $he financial statements mustbe prepared up to the client level. In the applications modules, the data structures mustextend to a great depth of detail to encompass the operational entities that add value tothe business through the activities in which the" engage. If managers care about an


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activit", then the s"stem has a place for it.

! client can have an" number of the following+

7ontrolling areas

1usiness areas

! controlling area can have an" number of the following+

Profit centers

7ost centers

7ompan" codes (how subsidiar" companies are identified)

! compan" code can have an" number of the following+

Purchasing organi*ations

Plants

$he plant is the main organi*ational element for aterials anagement. ! purchasingorgani*ation can have an" number of purchasing groups.

! plant can have an" number of the following+

unctional locations or pieces of euipment

Storage locations

#or centers

! storage location has a separate inventor" maintained for it. $his is defined as aph"sical location or group of locations in which stoc can be held.

! wor center is defined as an organi*ational unit where a wor step is carried out toproduce an output. $he activities performed at or b" a wor center are valuated b"charge rates that can var" according to the cost center and activit" t"pe. #or centerscan be defined on an" convenient basis and do not have to coincide with ph"sicallocations. #or centers can be machines, people, production lines, or groups of silledpeople. $he" can be narrowl" defined or can encompass an entire geographical location.

ach wor center master record has a cost center assigned to it. or planning and

reporting purposes, wor centers can be arranged in wor center hierarchies. $he outputfrom an" wor center can be assigned to an" number of wor center hierarchies for thepurpose of planning and reporting.

! wor center can have an" number of the following+

!ctivities

achines, plant, pieces of euipment, and production resources and tools


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Persons

! person is defined as a natural person in whom an enterprise-internal interest exists. !business partner is defined as legal or natural person, or a group of legal or naturalpersons, in whom or in which a business interest exists. ! wor center cannot include a

business partner.

,ssociating Strctres in a Project

! project can be concerned with an" combination of entities in the compan". $he projects"stem itself illustrates how the data objects of the %&' s"stem are used to monitor andcontrol the costs and revenues of the wor done in "our compan". ach element pointsto the responsible organi*ational unit represented b" a data object. $hese data objectscan attract not onl" the costs and revenues information but also an" technical informationrelevant to the operations of the accounting s"stem or the other functions of "ourcompan".

$he master data records used b" the PS-Project S"stem are formall" structured. !


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9ne cost center

9ne jurisdiction code (optional)

9ne plant

9ne or more activities

9ne or more functional locations and pieces of euipment (optional)

$he functional location is a place where plant maintenance activities occur. $heeuipment refers to the objects upon which the maintenance is carried out.

! networ has the following components+

9ne profit center

9ne business area

9ne jurisdiction code

9ne plant

9ne or more activities

! networ is recursivel" defined so that an" element in a networ can itself be a networ,and so on. $herefore, the term


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! storage location

(stablishing the Project Definition

$he project definition is a data object reuiring certain fields to contain valid entries, such

as those that relate the project to the compan" organi*ation. $he project definition alsoincludes text to describe the project goals or mission. /ou can add a reference to thesettlement rule to cover all the objects in the project.

Note

It is not necessar" to define an" activities or networs to establish a projectdefinition. $hese can be added later.

"sing asic Data

$he basic data repositor" of the PS includes templates for project management entities.$he following are the most important standard structures+

Standard wor breadown structures

Standard networs

Standard milestones

Standard texts

"sing Standard .or/ rea/do$n Strctres

$he wor breadown structure (#1S) defines a project in terms of the tass andsubtass that must be completed. ! standard #1S is a template for creating a newproject. It creates a model project that is full" integrated with the rest of "our s"stem assoon as "ou assign it an I6 code and save it. /ou can define several model projects andarrange for the s"stem to use them as appropriate to generate projects, for example, inresponse to an" of the following events+

7ustomer inuir" posted in the S6BSales and 6istribution module

Auotation posted in the S6-Sales and 6istribution module

Sales order posted in the S6-Sales and 6istribution module

Project organi*ation and coordination are managed through the #1S, which is definedas a master record structure that can store the wor, time, and cost data associated with

a project.

! #1S can be used to trac costs incurred in a networ. It comprises a hierarch" oftass and subtass to an" number of levels and can be represented b" a tree diagram.

If "ou do not have a model project alread" defined as a standard #1S, the individualtass must be entered to generate valid #1S elements. $he level of detail can beincreased at an" stage of a project.

$he #1S elements can also be used to plan dates, costs, and budget, before and during


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a project. ach element is assigned an operative indicator, which determines itsproperties for the duration of the project+

Planning elements for actual costs

!ccount assignment elements to which "ou want to post costs

1illing elements to which "ou want to post revenues

xisting organi*ational units in "our compan">s enterprise data model, such as a plant ora business area, can be associated with specific #1S elements. $he default assignmentfor a #1S element lins to the organi*ational structure specified in the project definition.

#1S elements alread" in existence can be referenced during data entr", as can portionsof the hierarch" from other projects. or plant maintenance purposes, for instance, "oucan assign a piece of euipment or a functional location to an element in a #1S.

ach #1S element can be assigned to an area of responsibilit" and to a responsibleperson within that area who is accountable for the wor of this element of the project.

$he #1S element master record also contains data fields that can be defined b" theuser to carr" additional information.

"sing Standard Net$or/s

In general terms, a networ is a connected structure of nodes and lins that signif"relationships between the nodes, such as


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e (P%$s) needed to perform the wor.

$he s"stem can create a purchase reuisition for all activities classified for externalprocessing b" running the %P-aterial %euirements Planning module. /ou can referto the associated purchasing information record to obtain prices and deliver" times forexternal activities.

Using Relationships Between Activities ! standard networ is a template that createsa new networ that "ou can save under a uniue I6 code. /ou can connect severalstandard networs with logical and temporal relationships to build an overall networ fora project. Subnetwors are treated the same as networs b" the project s"stem.

/ou can assign a networ to a #1S element and instruct the s"stem to roll up the datafrom all the constituent networs and assign to the relevant #1S element the costs,schedule data, and capacit" data.

#ithin a networ, the activities can be restricted b" the time available or for technicalreasons. Some activities tae a long time, some cannot begin until others have finished,and so on. $he PS module maes use of four t"pes of relationship between activities, as

follows+

inish-Start, where the second activit" cannot begin until the first has completed

Start-Start, where the second activit" cannot start until the first has started

inish-inish, where the second activit" cannot finish until the first has completed

Start-inish, where the second activit" cannot finish until the first has started

Using Network Types ! complex project uses both a #1S and an activit" networ. $he%&' 2etwor 0ibrar" can be augmented b" user-specified neutral networ structures forthe commonl" used processes that can be copied into "our project. $he networ t"pe

distinguishes networs b" their use. $he networ t"pe controls are as follows+

7osting variants for planned and actual costs

2umber ranges permitted

Status profile

Using Standard Milestones ! milestone is an event that can occur during the life c"cleof a project. In the S!P %&' s"stem, an event is a particular set of data that is recogni*edfor its significance. #hen the predefined data situation is detected, the s"stem registersan event b" creating a record and perhaps also triggering a seuence of functions.

In project management, a milestone is usuall" defined to mar the transition between onephase to the next, or between one cost center and another. /ou can assign a milestoneto a networ activit" or to a #1S element.

! standard milestone is a template that generates a new milestone in an existing networor #1S element. /ou can group standard milestones to report on them as a set.

Using Predefined Milestone Functions in Networks $he PS module includes standardmilestone functions that can be predefined to perform the following tass for specific


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business processes+

%eleasing activities

Starting worflow tass

9ne use of milestones in engineer-to-order manufacturing is to trigger customer billing. !billing plan is created using the defined milestones. #hen the milestone is reached, thes"stem automaticall" copies the actual date when the milestone event conditions weresatisfied to the billing plan, which then releases the billing bloc. $he invoice is producedthe next time that the billing due list is run.

'dentifying Prodction Resorces

! #1S can include elements that need documents to support the activities. $hesedocuments can include drawings and technical specifications and other matter fromword-processing or multimedia sources. $he documents can be treated as productionresources and can be managed along with the production resources and tools (P%$s).

!lternativel", documents can be allocated directl" to #1S elements from a document

management s"stem, even if this is not the one installed in %&'.

$he %&' PS-Project S"stem recogni*es and maintains three categories of P%$s+

P%$s with a material master record that are stoc items on inventor"

P%$s with a document information record that are part of the %&' documentmanagement s"stem

P%$s with their own P%$ master record that can be allocated in networ activities

6ocument management under %&' for #1S elements maintains the following informationabout each document+

Storage location of the document, such as 7!6 s"stem, P7 file, or filing cabinet.:enerall", the advantages of document management are onl" reali*ed if thedocuments are in electronic form.

9bject status.

0ocation of the original data.

Person responsible for the data.

Chec/ing Resorce ,!ailability

!vailabilit" checs b" the %&' PS-Project S"stem cover capacities, materials, productionresources, and tools. #hen "ou customi*e "our %&' PS-Project S"stem, "ou tell thes"stem whether and how checs are to be made on material availabilit", and whetherscheduled receipts or onl" the on-hand inventor" should be scanned.

Note

! complete worflow for missing parts is provided to manage the shortagethrough to goods receipt and bacorder updating.


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$he %&' s"stem recogni*es the following calendar t"pes, all of which can be used inproject planning+

:regorian calendars

actor" calendars (an" number)

#or center-specific operating calendars, with shifts if appropriate

$he following t"pes of dates are accepted+

1asic dates entered manuall" for the wor breadown structure valid at the time ofentr"

orecast dates entered manuall"

!ctual dates to show the progress of the project

S"stem-calculated dates created during networ scheduling

$he dates "ou use for scheduling can be fixed dates or dates obtained from a forecastand used as a basis for developing more accurate plans.

De!eloping Project Schedles

$he s"stem can automaticall" assign project dates if the">re connected to a schedulednetwor. !lternativel", "ou can plan project dates manuall" in the wor breadownstructure. Planning dates can be entered on the lists and overviews, in the hierarch"displa", or in the :antt 7hart of the project planning board. $hree methods or planningforms are available+

$op-down, beginning with the start and end dates for the highest #1S element in theproject hierarch", within which all other dates must fall

1ottom-up, starting with the subordinate #1S elements and appl"ing s"stem functionsto transfer dates up the hierarch"

9pen, in which "ou plan without reference to hierarchical dependencies but checdates before using s"stem functions to transfer them up the hierarch"

It is characteristic of the %&' PS-Project S"stem that checing and automatic updatingare not carried out automaticall". /ou must total, chec, and reconcile repeatedl" until"our project is correctl" specified. In the individual #1S elements, "ou can compare,

reconcile, or extrapolate dates. /ou can schedule the whole project or onl" part of thehierarch", together with the associated activities.

If it is necessar" to mae parts of the schedule more detailed, "ou can create newactivities and assign them to existing #1S elements. 6ates from these new activities canbe transferred to the #1S element, and "ou can lin activities to develop a networ localto this element. /ou can offset a new activit" to the start or finish of an existing activit".

It is often necessar" to appl" constraints to a project schedule. $hese can be dates


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recogni*ed b" "our implementation, such as annual plant shutdown.

"sing &loats and Redction

! slac time between activities is a float, so called because it is possible to allow eitheractivit" to extend into this time without disrupting the overall schedule. $he project

s"stem has various strategies available to reduce the activit" durations in a #1S if theconstraints demand it.

"sing Net$or/ Schedling

/ou can lin both networs with relationships and individual activities in differentnetwors in the same manner. 1" this means, "ou can generate an overall networ for"our whole project and then appl" networ scheduling.

our t"pes of networ scheduling are available. ach is discussed in the followingsections.

Using Forward Scheduling In forward scheduling, "ou set the start date and instruct thes"stem to use an" scheduled dates alread" assigned to the #1S elements. $hisprocedure then reports the end date to "ou.

Using Backward Scheduling In bacward scheduling, "ou set the finish dates and thePS tells "ou when the project should start.

Scheduling to urrent !ate In scheduling to current date, the s"stem schedulesforward from the current start date for the networ, and then "ou can chec whether theproject will finish on or before the reuired date. /ou can use the floats along the criticalpath to estimate the discrepanc". In S!P usage, there is a critical path within a project ifthe total float is *ero or negative. In general, "ou should be concerned if there is aseuence of tass in which each must await the completion of the previous, and where

the estimated duration of this seuence approaches the time available. !lthough thesetass ma" not have *ero floats, their position in the seuence can mae them vulnerable.9ne advantage of a formal s"stem of networ planning is that it obliges the user tospecif" all the lins and to assign time values to them. If an" dela" is anticipated, theeffect on the networ as a whole can be simulated.

Using Today Scheduling In toda" scheduling, the s"stem schedules forward fromtoda">s date. or example, if the scheduled start of a networ is between toda">s dateand the planned start date, the s"stem first reduces the lead time. If the finish datecalculated b" the s"stem is still not acceptable, "ou can as for the earliest possiblefinish date if the networ were to begin toda".

"nderstanding Project Cost Planning

$he success of man" projects depends on the costs incurred. $here are a few projects inwhich the ualit" of the outcome is arguabl" more important than the costs incurred. /our compan" ma" want to be the first, and onl" on repeat orders see to reduce the costs.Some of these costs will be excessive if the" are improperl" planned. Some costs will beexcessive because the plan was not updated with fresh information as it becameavailable. $he project s"stem must support continuous editing and updating of projectplans.


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!t the conceptual and rough-cut planning stage, the planning of costs suggests the costs"ou expect the project to incur. !t the approval stage, planning indicates the wa" aheadfor budget allocation. 6uring project execution, the role of the planned dates and costs isto monitor variances between planned and actual values.

$he s"stem offers the following forms of cost planning+

Structure planning that is independent of cost elements

6etailed planning of direct costs b" uantit" and value

6etailed planning of secondar" costs, using planned activit" uantit" and the standard79-7ontrolling rate for the sender activit"

Dnit costing, using data and methods from 79-7! 7ost lement !ccounting, andPurchasing in -aterials anagement, if reuired

7ost planning in the networ, in which the networ activities are used as cost elementsin the unit costing techniue

7op"ing of wor breadown structures and parts of them can be used where projectsentail the same processes. 6ifferent versions of a project plan can be saved andmaintained in parallel, for example, in the best-case and the worst-case scenarios.

Using Structure Planning !t an earl" stage in planning, "ou ma" have just an outline#1S structure in which some or all of the elements have been designated as planningelements. /ou could estimate the cost for each #1S element, or "ou could adjust thecost taen from similar reference objects. $he characteristic of structure planning is that itis independent of cost elements. /ou nominate or create a #1S and allocate costs fortop-down distribution or to the lower levels for bottom-up totaling.

/ou can plan overall costs and then distribute them over the expected duration of the

project, or "ou can define plan values for costs for individual "ears. $he PS totals worbreadown structure values for each "ear.

!s information becomes available the structure plan can be refined and elaboratedtoward detailed cost element planning and unit costing, for example.

Using !etailed Planning to ost "le#ents ! cost element is an account item in thechart of accounts that is used in the cost controlling area. 7ost elements of this ind areused in cost accounting to enter, classif", and assign values to the consumption ofproduction resources.

#hen costs are posted (if "ou>re using 79), the" must be assigned to a specific costelement, which is either a primar" cost element for goods and services procured

externall", or a secondar" cost element for goods and services created b" internalactivities.

#hen costs are entered, the" must be identified with a controlling area and a costelement. $he" must also be assigned to an additional account assignment object that isoffset with the cost element posting to complete the settlement procedure. $his additionalaccount assignment object must be one of the following+

! cost center


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! networ

! #1S element

! cost object

! revenue object

6etailed cost element planning of this t"pe reuires planning primar" costs andsecondar" or indirect costs.

Planning primar" costs can be carried out in terms of both uantit" and value. If "ou planfor uantities, "ou enter the planned consumption and then value it using the plannedprices per uantit" unit. Planning b" value does not reuire the entr" of planned useuantities. /ou enter the planned costs for each cost element.

7ost center activities can be planned as indirect costs on a uantit" basis. $he activit"reuired is planned b" uantit" and is multiplied b" the rate charged b" the sender cost

object. $his "ields a value that is stored in a secondar" cost element as an internalactivit" allocation.

Using !etailed Planning $y Unit osting It ma" be the case that "ou can access allthe information "ou need for costing from the integrated applications of "our S!P %&'s"stem. /ou need the information on the sources of suppl", the uantities, and the pricesso that "ou can appl" unit costing for project cost planning purposes. Into "our plan "ouenter the uantities of the units for each origin, such as each material and each relevantactivit" defined in the 79 module. $he s"stem then computes the values using thestandard prices for these resources.

Using ost Planning in Networks If "ou have built a networ that schedules theactivities and carries planned values of the intended resource use, "ou can have the

project s"stem calculate the costs of "our plan in terms of the objects in "our networ.Primar" costs are derived from "our entries for external activities, materials, and generalcosts activities. !ctivit" input is defined b" "our internal activit" planning values.

$he user can allocate materials to activities. $he s"stem then generates stocreservations for all the materials held as stoc. $he prices are available from thematerials masters. 2on-stoc material is allocated b" purchase reuisitions, for which theplan values can be obtained from the purchasing s"stem.

$he general costs activit" is an instrument for accumulating costs that cannot beassigned directl" to a cost center activit" or to a material. $hese costs can be assigned toan" suitable cost element.

Planning Capacity Re0irements

or internal activities in each wor center, "ou define available capacities and specif"formulas for calculating them. /ou can operate capacit" splits, which serve to allocatecapacit" data to individual capacities such as specific machines or individual people. !s"ou enter the uantit" of wor to be performed, "ou indicate the reuired capacit" units.$he s"stem uses this information automaticall" when scheduling capacit" reuirements.

/ou can plan external activities b" referencing a purchasing information record for a con-


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tractor, which shows the prices and deliver" times. If "our s"stem is integrated with thePP-Production Planning application, the project s"stem can initiate the creation of apurchase reuisition b" the %P module from this information. #hen the activit" isreleased, the user must convert the purchase reuisition to a purchase order.

If "ou want to inspect the capacit" utili*ation of the wor centers, "ou can do this from the

time scheduling and structure planning functions at the project planning board. $hecapacit" evaluations displa" the accumulated capacit" loads per period. $his is the indof information that can foretell baclogs and bottlenecs.

"sing Capacity 1e!eling

$he displa" and control interface of choice for capacit" leveling is the %&' :raphicPlanning $able. $he idea is to reconcile all "our capacit" demands to amounts ofactivities that will be available at the time. /ou have a range of tactical procedures at "our disposal that "ou can compare through simulations of "our plan. or example, "ou cansee what differences "ou could mae to the capacit" availabilit" position b" an" or all ofthe following+

9rder manipulation

idpoint scheduling

%escheduling

9utsourcing

#or center changes

/ou can perform most of the rearranging from the %&' :raphics Planning $able. 3ere aresome options+

7hange the seuence of activities in a networ

Split activities across wor centers

Split activities across time periods

7hange the structure of wor centers

7hange the available capacit" of wor centers

$he conseuences of an" changes "ou propose can be explored at the planning table./ou have two areas on the table+ 9ne shows the wor centers and available capacities,

and the other shows the activities with reuirements that have not "et been dispatched./ou can select an activit" on the graphic planning table and drag it to an available timeperiod in a suitable wor center.

"sing Personnel Planning

#hen "ou install and configure the P6-Personnel Planning and 6evelopment s"stem,"ou effectivel" extend planning in another dimension. $he personnel s"stem depends ondefinitions available for all the wor positions in "our compan". $hese definitions use


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standard ualification descriptors that specif" what experience, ualifications, andauthori*ation levels are needed for each wor position. /our personnel s"stem alsorepresents all "our emplo"ees in the S!P %&' database. $hese appear as masterrecords using entit" t"pe E55F, which is reserved for natural persons in whom "ourcompan" has an enterprise-internal interest rather than a business interest. Suchpersons can be current emplo"ees or retired emplo"ees still on the pension pa"rollGorat least still in the database in case the" might be invited to rejoin "our compan".

/ou can use the integrated personnel s"stem to find a person to whom a tas could beassigned. /ou can specif" the time period as well as the ualifications reuired.$herefore, "ou can conduct personnel planning over the same periods "ou use for "ourother t"pes of planning.

$he s"stem offers "ou a list in ran order of all the persons suitable for a tas on thebasis of their availabilit" in the appropriate wor center, their available time, and theattributes needed to perform the activit". /ou can arrange to view ranings with differentsort codes.

"sing %aterials Planning

$he natural source of planning support for materials is the -aterials anagementmodule, which can provide integrated functions for the following activities+

Purchasing

Inventor" management

aterials reuirements planning, if "our s"stem is also integrated with the PP-Production Planning application

If "ou allocate a material from stoc from the project s"stem, an automatic reservation ofthe reuired uantit" occurs so that it is no longer available to promise to another project

or order. If the material "ou allocate is not a stoc item, the %P s"stem can create apurchase reuisition for the reuired uantit"H this is submitted for approval and releasefor purchasing action.

If that particular worflow is enabled when the material is received, the receiptconfirmation is associated with the relevant object in the project s"stem so that theproject manager can be informed when the material arrives.

Some materials needed for a project can be obtained on time onl" if the" are orderedwell in advance. If "ou now the lead time, "ou can place a preliminar" order in thematerials purchasing s"stem. Such a preliminar" order can be assigned for accountingpurposes to a sales order as part of the project, or to the project account itself. $heassignment serves as a purchase reuisition.

If "ou use the project s"stem to assign a material to an activit", and if there will be a longlead time before this material is delivered, the project s"stem uses this planned deliver"time to automaticall" adjust the duration of the activit". $he idea is that the activit" beginsb" ordering the material and then lasts at least as long as the time necessar" for deliver".

/ou ma" decide that the stoc needed for "our projects should be managed separatel"from the inventor" used for other wor in "our compan". /ou can designate the materialsand uantities to be managed as project stoc or sales order stoc so that these


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materials will not be available to promise to an" other orders.

"sing ,!ailability Chec/ing

If "our project plan has reached the stage of assigning milestone dates or activit"durations, the project s"stem automaticall" checs that all the materials, production

resources, tools, and activit" capacities will be available at the planned start dates for therelevant activities.

1efore "ou release a networ, "ou should conduct an availabilit" chec. $he projects"stem enables "ou to specif" when and how availabilit" checs are to be conducted.or instance, "ou can arrange that materials needed b" "our project are not consideredto be available unless the" have been confirmed as on-hand inventor". If "ou areconfident in "our suppliers, "ou can permit scheduled receipts to be considered if theirplanned deliver" times are compatible with "our networ.

$he %&' #orflow s"stem can be set up to tae action automaticall" if an" material ismissing. $his is referred to as missing parts management. $his t"pe of management canrespond to initial shortages, discrepancies in goods receipts, and updates to bac orders.

7hecing P%$s must tae account of the planned time schedule and the capacitiesreuired. !n" particular P%$ is identified in the master records and is associated with astatus code. $his reveals whether the resource is being used b" another activit", whether it is unsuitable for service until repaired, or whether it will be withdrawn from service. /ouhave a customi*ed status structure according to the t"pe of P%$s used in "our industr".

Note /ou can chec the availabilit" of P%$s and activit" capacities with the graphicalplanning table and the project information s"stem

"nderstanding Project dgeting

If "our project has a budget, "our management must have approved a plan that sets outthe expected development of costs over the intended duration of the project. $he betterthe planned cost development, the better chance "ou have of bringing in "our projectwithin budget. 9n the other hand, "our management ma" not approve "our plan in itsentiret". /ou ma" not get a budget sufficient to cover "our planned costs.

! budget for a project is created formall" when planning is completed and projectapproval is granted. ! cost plan is an estimate. ! budget is a fixed amount that can beallocated to the #1S elements. /ou ma" be permitted to eep some of "our budget inreserve for contingencies. /ou can allocate funds either b" adopting the values producedb" detailed planning, or b" distributing the budget manuall" as values entered directl" inthe #1S elements.

/our finance director ma" not actuall" release all the funds for "our approved budget.$he %&' PS-Project S"stem recogni*es the following two t"pes of budgets+

! current budget is the original budget that ma" have been amended b" supplements,transfers, and returns

! released budget is limited b" the original budget total but is released in stages,perhaps in relation to #1S elements or milestones.

7hanges in a budget can be accommodated b" the following instruments, all of which arereversible+


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Supplements that "ou can process from the top-down in the #1S

%eturns of excess funds that "ou can process from the bottom-up in the #1S

$ransfers of funds that "ou can move from one #1S element with a budget to another,

which also must have a budget, although it need not belong to the same project

Note

$he project s"stem displa"s project budgets in hierarchical format, ifnecessar", and checs that no release or assignment would exceed theoriginal budget amount.

"sing Project dget %anagement Spport

$he following support functions are available in budget management support+

0ogging all budget updates in an approval histor"

Selecting #1S elements and increasing their budget allocation b" a percentage or b"an amount

%eassigning individual #1S elements or project branches, along with their budgetvalues, to an" existing budget

%anaging dget &nds

! funds overview is provided to displa" what funds have been assigned in a project. If"ou operate passive availabilit" control, the s"stem reports fund commitments in aproject, even if the" are in excess of the funds available at the time.

3owever, "ou can specif" active availabilit" control. ! tolerance level is defined per #1S

element or for the project as a whole. $he business transactions that trigger activeavailabilit" checing must be defined in the configuration of "our implementation. If "oupost a business transaction to create a purchase order for a #1S element, for instance,the project s"stem checs whether the available project budget or the released funds areenough to cover it within the tolerance level. /ou can specif" what action should occur ifsuch an event is detected. or example, "ou can specif" a warning to the user, plus amessage to the person responsible for the project.

$he following availabilit" control parameters can be specified+

#hether the target for comparison is the amount of released funds or the currentbudget

#hether the budget to be considered is the annual budget or the overall budget for theproject

#hich t"pes of business transactions should be subject to availabilit" control (such aspurchase orders or postings in 79-7! 7ost lement !ccounting)

#hether the tolerance of an intended transaction is to be based on a percentage useor an absolute value of the variance of the budget overrun


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#hat actions should be triggered b" a transaction that will create a budget overrunaccording to the parameters defined

In the event of an intended transaction triggering availabilit" control conditions, theproject manager can respond to the warning b" using a special function e". $hisautomaticall" displa"s the funds overview for the #1S element that is about to run over

budget. $he displa" gives the amount of the excess, the details of its origin, and the itemin the transaction where the overrun conditions were triggered.

$he tolerance limits can be configured to respond with different actions according to theamount of the budget excess in the following seuence+

#arning alone

#arning plus electronic message to the project manager

rror message and rejection of the intended posting

$he budget availabilit" control function can provide an automatic s"stem for giving earl"

warning of those project commitments liel" to exceed budget funds(2ecting a Project

If "ou manage "our projects b" the method of budgeting and releases, execution beginswith project release. an" activities needed in a project are initiated from the projects"stem. 3owever, some activities are executed outside the project unless "ou maeprovision for them to be under direct control of the project s"stem. or example, apurchase reuisition is usuall" submitted to the purchasing department. ! sales order iscreated and processed b" the sales department.

or a business process to be assigned to a project and processed there, "ou mustallocate an account assignment to a specific networ activit" or to a #1S element. !sthe project proceeds, funds assignments are generated b" it. $he" are represented as

funds commitments, open items, and actual values.

8ariances arise between planned and actual values. Prices of purchased goods ma"change. 8endor deliveries ma" fall outside their planned periods. /our plant ma" not becapable of manufacturing or processing as much as "ou had planned. Dnplanned eventssuch as these reuire planning updates from "ou to suppl" the fresh information used inplanning subseuent activities. !s "ou update "our project with new planning information,"ou will become aware of the more obvious trends in the data. /ou will probabl" noticewhen the project plan loos lie it will exceed budget or come in late.

"sing ,cti!ity Confirmations

ach activit" must be confirmed in the s"stem. $his could be done in man" differentwa"s. /ou ma" have a data lin installed, or "ou ma" have to manuall" enter data froman activit" confirmation slip, for example. $hese confirmations update the capacit" loadof the wor center and record the actual costs. $he remaining duration and wor to finishthe networ are also updated b" these confirmations. ! confirmation can be canceled aswell.

/ou must enter the following information either manuall" or automaticall" into "ouractivit" and networ completion confirmations+


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6egree of processing (optional)

#or center

6ates

6uration

orecast values (optional)

$he networ and the wor breadown structure wor togetherH changes in one arereflected in the other.

7onfirmations to the networ can be directed to the PS information s"stem and can bedownloaded to there from external s"stems such as plant data collection s"stems,icrosoft Project, or icrosoft xcel. 7onfirmed data can be copied to the networ.

$he project s"stem enables "ou to confirm man" activities at the same time with the7ollective 7onfirmation Screen. ach member of the project staff can define a uniue

user screen that displa"s onl" those confirmations that fall within their area ofresponsibilit". $he user can define column widths and the seuence of fields and canselectivel" filter out unnecessar" information. $he user can also individuali*e the act ofconfirmation b" setting default values, such as their personnel number, to be written intoever" activit" confirmation.

Note

!n" confirmation of an activit" can be subseuentl" canceled.

Using Actual !ates ach #1S element in a project is associated with planned dates. !ctual dates can be either entered manuall" to each #1S element or copiedautomaticall" from activit" completion confirmation documents. $wo basic schemes existfor recording actual datesH "ou can also appl" a combination of these two schemes+

If "our plan is developed top-down or bottom-up, the project s"stem will cop" actualdates from the lower-level #1S elements to the higher-level elements to which the"belong.

If "our plan is developed b" an" other procedure than top-down or bottom-up, theproject s"stem will update with the actual dates onl" those #1S elements that have anetwor assigned to them.

!s soon as an activit" has been confirmed and "ou have actual dates for networactivities, the project s"stem uses them in the schedule forward procedure to calculate anew finish date. $he s"stem then automaticall" schedules bacward from the basic orfixed dates to determine the floats.

Cation

! negative float suggests that "our project has fallen behind schedule.

Using Actual osts and o##it#ents 1usiness transactions in the project and in thevarious feeder s"stems incur actual costs and commit funds to meet future needs. $heseare automaticall" associated with the #1S element responsible. $he followingtransaction documents record activities liel" to create commitments of funds+


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!ctivit" allocations and confirmations

aterial issues

6eliveries

xternal invoices

Purchase orders

Purchase reuisitions

anual funds reservations

Using Actual Revenues or revenue to appear as an actual value in the project s"stem,one of the following commercial transactions must be posted+

Posting in I-inancial !ccounting

Invoicing in S6-Sales and 6istribution

Using Actual Pay#ents Pa"ments can be processed from the project s"stem in variouswa"s, which include the following documented transactions+

6own-pa"ment reuests

6own pa"ments and down-pa"ment clearing

Incoming and outgoing pa"ments

Not

e

Imputed interest can be computed in the project s"stem to contribute to the

project result calculation.

Creating )rders for a Project

If "ou have elaborated and planned a project in terms of #1S elements and networs,"ou can extend the scope of the project b" adding #1S elements and b" creating ordersfor the project. 7reating an order ma" be the preferred option for an" or all of thefollowing reasons+

/ou ma" be able to use an existing bill of materials and routing as the basis for a newproduction order to manufacture materials.

/ou can create a maintenance order to plan and monitor maintenance tass for the

project.

/ou can create internal orders to allocate costs and activities for cost accounting andperformance anal"sis purposes.

9ne advantage shared b" all t"pes of orders is that the" can be managed from theproject s"stem and "et still be ept up-to-date b" automatic postings in the controllings"stem.


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Percentage overhead rates

!bsolute overhead amounts

Auantit"-based surcharge amounts

Surcharge rates applied to mixed or variable portions of the base amounts

Single or multilevel surcharge calculations

!ssigning overheads to credit objects and cost elements

!ssigning overheads to allocation cost elements

! base cost element that is used as a multiplier in the calculation of overhead surchargescan be treated in various wa"s. or example, the total, the fixed, and the variable costportions can each be multiplied b" a different surcharging rate.

$he s"stem calculates surcharges in simulation mode without posting them to a projectso that "ou can review the amounts and correct them before charging. Surchargecalculations and simulations can be conducted online or in bacground processing. !surcharge log is maintained to record how the surcharges have been applied as actualcosts to the cost centers or orders.

rom the stored pa"ment, the down pa"ment, and the internal activit" transactiondocuments, the project s"stem maintains an up-to-date balance interest calculation thatis recorded as an accounting document. $he interest calculation brings in the values ondates in the past histor" of the project, interest rate changes, and the effects ofcompound interest.

"sing (arned #ale ,nalysis$he earned value anal"sis functions of the project s"stem are used to present theprogress of a project and its value at particular points in time, such as period end. /oucan call on various techniues that can be combined under the user>s control to portra"the progress of a project or an individual wor pacage within a project. $he followingprocedures are available to be applied to a base value, such as the planned costs of atas+

Start-finish rule to calculate value at the start and finish of each #1S element

ilestones reached

easurement of the degree of processing achieved in the project

Percentage of completion (P97) based on the actual costs as a proportion of theplanned costs

stimation of the P97

$ime proportionalit" used to calculate earned value from the base


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Secondar" proportionalit"

$he start-finish rule is a measurement techniue in which "ou can specif" that apercentage of the planned wor on a tas shall be deemed to have been completed assoon as the activit" has started.

Secondar" proportionalit" is a method of measuring the progress of a project that uses avariable, such as the uantit" of a e" resource or tracing factor. $he proportion of theactual to the planned uantit" of the tracing factor is applied to the planned costs tocalculate the value of a project at the interim stage.

If "ou have calculated the percentage of completion of a project at an interim stagebefore completion, "ou can use this proportion for the following purposes+

$o bill the customer

$o calculate balances and reserves of funds

$o anal"*e the earned value of the project

"sing Reslts ,nalysis

$he rules of financial accounting reuire that projects in process be evaluated at period-end closing. $o achieve periodic valuation of long-term orders, the results anal"sisfunction compares the calculated costs and the actual costs of an order as it progressestowards completion. $his method calculates either inventor" (if actual costs are greaterthan calculated costs) or reserves (if actual costs are less than calculated costs).

$he data calculated during results anal"sis is stored in the following account items+

7ost of sales, or a revenue figure for profitabilit" anal"sis calculations

#or in progress

7apitali*ed costs

7apitali*ed profit

%eserves for unreali*ed costs

%eserves for costs of complaints and commissions

%eserves for imminent loss

#hen a project is settled, the data from results anal"sis can be passed to financialaccounting, profit center accounting, and profitabilit" anal"sis.

$he procedure to be followed in results anal"sis is controlled b" the results anal"sis e"assigned to it. $he e" specifies such options as the following+

#hether revenue-based, uantit"-based, or manual

1asis on which it is carried out (planned or actual results)


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3ow profits are to be reali*ed

#hether to split inventor", reserves, and cost of sales

$o which results anal"sis accounts should post the results

3ow the life c"cle of an object is to be broen down into open and closed periods

/ou can set up different procedures b" editing a results anal"sis master and creating aresults anal"sis version. /ou ma" want to do this under the following t"pes ofcircumstances+

#hen "our corporate group operates in more than one region of legal force andtherefore needs to render external accounts in accordance with various legalaccounting practices

or financial accounting purposes that reuire assignments that differ from projectcontrol

or profitabilit" anal"sis

/ou ma" also want to tae into account the effect of operating fixed prices betweendifferent subprojects within a project. $his can be arranged through a results anal"sisversion to enable "ou to pass on profitabilit" anal"sis data for a subproject separatel".$his ma" be necessar", for example, when "ou assign certain results to profit centers.

"sing alance Sheet Comparison of Costs and Re!enes

If "ou use the project s"stem to transfer calculated data to the balance sheet accounts ona period basis, the corresponding balances are formed and subseuentl" cleared. $hese

retain evidence of their origins in a specific project so "ou can maintain a concurrentcosting and internal valuation procedure for each project as it is executed.

$he results anal"sis up to a e" date enables "ou to compare costs incurred and thematching revenues.

"sing Settlements

! settlement can be performed as a simulation, or it can result in the appropriate valuesbeing updated. Settlement of costs incurred in a project on one or more receivers isautomaticall" accompanied b" corresponding credit postings to the project itself. $hecosts settled are recorded in the relevant receiver. 6ebit postings assigned to the projectremain on displa" even after settlement.

$he following t"pes of assignment account objects could accept the settlement asreceivers+

7ost center

Project

!sset


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:eneral 0edger account

1usiness segment

$he project or the #1S element master must include a specification of the settlement

rule. $his can comprise several distribution rules, each defining the settlement receiver,the distribution of costs, and the settlement t"pe.

$he settlement structure determines how the process is controlled. $his structurespecifies the settlement cost elements, or the value fields from an operating concern, thatare to be assigned to cost elements and cost element groups.

$he following settlement functions are under development b" S!P+

Settlement b" amount

Settlement of line items

Settlement in the plan

Settlement b" cost element

! separate structure for use b" 79-P! Profitabilit" !nal"sis is nown as the P!Settlement Structure. See 7hapter ? for more information on this structure.

illing

! sales order or a sales order item can be assigned to a project or to a #1S element.#hen the customer is billed, the amounts then are automaticall" recorded as actualrevenues in the project or relevant #1S element.

ixed-price billing can be carried out per sales item as of a single billing date. Partialbilling also can tae place, splitting the total amount to be billed between the dates of thebilling schedule. $he following splitting options are available+

6ates for split billing are entered manuall" in the billing schedule.

Partial billing is based on networ milestones assigned to the sales order from theproject or from a subhierarch" assigned to the sales order.

$he customer is invoiced with a percentage of the total project costs or with a predefinedamount as each milestone is reached.

! billing schedule can include items for down pa"ment as well as the actual billing items.$he s"stem creates down-pa"ment reuests that are automaticall" posted to f inancialaccounting.

"sing Resorce-Related illing

#hen a customer places a uniue order, prices for services ma" not be stored as fixedprices in the sales order master records. Instead, billing ma" be based on theexpenditure actuall" incurred. %esource-related billing uses the cost information stored in

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the project to create items for a billing reuest. #hen the time for billing arrives, thebilling reuest initiates the production of billing documents. $he following operations arecarried out prior to the release of billing documents+

Pricing can be based on internal prices as an alternative to using cost informationstored in the project.

%esource items against contracts and warranties is a checing process that can beused to reduce individual resource items or eliminate them from billing.

Interactive dialog functions enable the user to manuall" change billing reuests at theresource item level to delete items or reduce the uantit" to be billed.

If "ou create or change a billing reuest, the s"stem automaticall" records this fact as adocument histor" item that can be used to ensure that no item is billed twice. $he histor"can also be used to trace the origin of individual billing items.

Note

1illing documents provide cost information that can be used in results anal"sisduring project evaluation.

Using Fi%ed Prices in Su$pro&ects ! subproject can be defined as a section of aproject or wor breadown structure that has responsibilit" for its own budget and istherefore obliged to manage its accounting locall". ixed prices can be used for thetransfer of goods and services between subprojects. !t the planning stage, fixed pricesare managed under fixed-price agreements. !t the execution stage, fixed-priceallocations are used.

! fixed-price agreement is a document in which "ou enter the subprojects or #1Selements taing part. $he amount appears as a plan revenue in the suppl"ing or sending#1S element and as a commitment in the ordering #1S element.

!t the execution stage, a fixed-price allocation based on a fixed-price agreement is

affected. $he suppl"ing #1S element shows the allocation as an actual revenue, and theordering #1S element shows the amount as an actual cost. $he commitment is reducedb" the same amount.

'nterpreting Su$pro&ect (iews $he overall view does not recogni*e subprojects andtherefore does not recogni*e fixed-price agreements. 3owever, fixed-price agreementscan be evaluated in the subproject view, which is accessed b" entering the subproject I6code.

$he subproject view for decentrali*ed project management can be upheld in the followingprocesses and structures+

1udgeting and availabilit" control

Profitabilit" anal"sis

7ommercial project structures

7ost element reports

"sing the Project 'nformation System

an" different business specialties are used in a complex project, and their providers do


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not all want to use the same displa"s and reports. Project status in relation to the variousinfluencing factors will be of interest to man" on the team. $his is closel" related toproject progress.

$he reporting s"stem enables "ou to select the degree of detail and the filtering of dataappropriate to "our immediate purposes. $he following project role displa"s are available

to provide starting points for interactive anal"sis+

1udget

7osts and resources

inances

Project structure and schedule

%esources

$he natural wa" to measure project process is to compare different versions of the same

project. ! version of a project is a snapshot of the project data at a particular time or at aparticular stage, as defined b" the status of the project. ! project version is either time-dependent or status-dependent. 6ifferent versions are displa"ed in contrasting colors,and "ou can compare as man" versions as "ou reuire on a line or column basis toevaluate trends in costs or schedules.

"sing PS 'nformation System Reporting

$he data "ou want to inspect can be sorted to differentiate a particular point of view. $hefollowing project views are standard structures upon which reports can be deplo"ed+

$he project structure

! subhierarch", such as a profit center hierarch"

! cost center hierarch"

! summari*ation hierarch"

! sales structure, such as a sales order

! report tree function structures and displa"s the existing standard and custom reports. !ll reports can be executed interactivel" or in bacground processing.

Selecting Standard Reports $he cost information s"stem of PS includes standard

reports to compare planned and actual budgets as well as budgets and assigned funds. !n" report can be edited for content and la"out and can be saved as a custom version.

!efining usto# Reports $he following information is available for use in customreports+

!ctual values

7ommitment


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8alues related to project structure, budgets, and cost elements

$he grouping of records for the purpose of summari*ation is controlled b" characteristicsthat "ou define for individual hierarch" levels. %eference characteristics point to fields inthe project master record. Dser-defined characteristics are specified b" selecting fieldsand values that will be available in the s"stem when the database is accessed to select

records for a summar".

#hen "ou have a report on "our screen, "ou can select a summari*ation object andswitch between cost element and project levels. $his enables "ou to move from asummari*ation report to the detailed information on which it was based.

Tip Project summari*ation can embod" or branch to standard reports and maeuse of the full function set of the project and cost information s"stems.

#ie$ing the Strctre and Dates of a Project

$he information s"stem offers "ou a famil" of Structure&6ates views of "our project. /oucan select from the following options+

Show the current status or the hierarchical relationships between selected objects thatare part of the project, such as #1S elements, networs, activities, materialcomponents, production orders, and maintenance orders

7ontrol the data aggregation and displa" to emphasi*e totals, summaries,comparisons, sorted lists, or graphics

0ist all objects in a hierarchical structure

Inspect overviews of particular t"pes of object in a project, such as activities

1ranch to a detail screen for the object identified on the displa"

Manipulating Presentation 0ists and overviews are accompanied b" relevant statisticsand interpretations, of which the following are perhaps the most useful+

2umber of #1S elements

2umber of activities

7ritical activities

2umber of activities started ahead of planned schedule

2umber of activities begun behind schedule

2umber of objects released and partiall" confirmed

/ou can add fields to a list or overview displa", and "ou can control presentation andla"out. /ou can be selective b" referring to such field data as the I6 of a particularmanager, a controlling area, or a priorit" level.

$he following standard graphics can be applied automaticall" to the data on "our screen


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or to an" part of it that "ou choose to select or otherwise define+

Structure graphic

3ierarch"

:antt 7hart

2etwor

Period drill-down graphic

Portfolio graphic

rom the standard S!P %&' presentation graphics, "ou can select as appropriate fromthe following list+

3istogram

$otals curve

7orrelation

!17 anal"sis

Segmenting

7lassification

$he presentation of values and the la"out of the graphics can be customi*ed and editedinteractivel".

Accessing Related 'nfor#ation Syste#s $he following information s"stems areaccessible from the Project Information s"stem+

7osts, finances, and revenues

%esources

$he resources information s"stem presents information about purchasing, materialsplanning, and capacit" planning from the following data sources+

7apacities

issing parts

Stoc and reuirements list

Pegged reuirements

9rder reports

%eservations


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ps to co relationship document

Documents