CPM Product is part of SAP EPPM (Enterprise Portfolio and Project Management.) It is not a successor of just SAP PPM. It is an umbrella term for a set of solutions that help customers run Project-oriented processes in their companies. SAP EPPM is made up of three key components Solutions; SAP Commercial Project Management, SAP Portfolio and Project Management, and SAP Project System .EPPM is a great solution for portfolio and project managers and their teams and across several industries, including utilities, energy and construction. In this blog , I will discuss with you on CPM part . Let’s brief you other products of EPPM.
PPM ( Project and Portfolio Management )
The SAP Project and Portfolio Management is SAP’s integrated enterprise level project and portfolio management system.It is very useful on Investment projects .Addresses the strategic aspects of portfolio management, monitoring initiatives and existing project status.
It allows you to manage multiple Programs, each of which may be composed of one or more projects. It provides you the ability to perform activities such as procurement that is fully integrated into your project execution plan.
It is also highly integrated into the resource management functionality, such that you can create an implementation project, say a SAP implementation project, and evaluate it and a portfolio of completely unrelated professional services projects to decide which should be pursued, which should not and which may need some other approach, say, to be done by a partner.
It is also highly integrated into the resource management functionality, such that you can create an implementation project, say a SAP implementation project, and evaluate it and a portfolio of completely unrelated professional services projects to decide which should be pursued, which should not and which may need some other approach, say, to be done by a partner.
It is also highly integrated into the resource management functionality, such that you can create an implementation project, say a SAP implementation project, and evaluate it and a portfolio of completely unrelated professional services projects to decide which should be pursued, which should not and which may need some other approach, say, to be done by a partner.
Project System
SAP Project System (PS) is a part of SAP’s Enterprise Project and Portfolio Management solution. It is part of main core of S/4 HANA .SAP PS includes several tools that enable the project management process, such as budgeting, scheduling, materials requisition, and planning. Essentially, SAP PS manages the entire project lifecycle right from structuring to planning to creating detailed plans to executing, all the way until the completion of the project. SAP PS on-premise solution or HANA Cloud and allows its users to provide funds where needed and effectively manage and control each stage of the project to confirm on-time delivery and stay within the budget, over a specific period of the project period.
Due to its tight integration with SAP’s Finance and Logistics modules, the SAP PS Module can be used especially for large and complex projects such as construction, production, service, investment projects in all industries.
CPM ( Commercial Project Management )
SAP Commercial Project Management provides solutions that address the core business process requirements of companies that offer project-based services to their customers. SAP Commercial Project Management covers multiple processes in an end-to-end scenario spanning the selling, planning, executing, monitoring, and controlling of projects. Companies that sell projects (for example, in the professional services or the engineering, construction, and operations industries) can use these solutions to further professionalize their core business processes and expand beyond back office capabilities. The CPM is more useful for customer projects.
The main pillars of CPM are as below :
- 1) Project workspace
- 2) Project Cost and Revenue Planning
- 3) Project issue and Change Management
1) Project work space :
Project workspace also provides a quick view of projects using embedded Analytics reports, important key performance indicators(KPIs) and reviewing data such as open purchase orders or unpaid customer invoices, sales order, billing data from underlying systems. Project planners can create financial bids, plan on actual objects, carry out forecasting scenarios, and track the financial health of ongoing projects.
Project workspace also provides a quick view of projects using embedded Analytics reports, important key performance indicators(KPIs) and reviewing data such as open purchase orders or unpaid customer invoices, sales order, billing data from underlying systems. Project planners can create financial bids, plan on actual objects, carry out forecasting scenarios, and track the financial health of ongoing projects.
2) Project Cost and Revenue planning :
Project Cost and Revenue Planning offers unified planning and controlling of quantities, costs and revenues throughout the complete project lifecycle (bid, plan, forecasting, execution). Forecasting of quantities, costs and revenues through the complete project lifecycle . Also, it offers bi-directional integration with SAP S/4HANA which means financials planning done in SAP Commercial Project Management can be transferred to SAP S/4HANA Project Systems and actuals cost booked in SAP S/4HANA Project Systems can be brought back into SAP Commercial Project Management.
Challenges
It has been a challenge to perform comprehensive and effective financial planning for commercial bids. There have been many issues (mentioned below) which arise while doing financial planning for bids and can be answered with financial planning in SAP Commercial Project Management.
- 1) How to use data from the historical bids or projects as a reference while creating new bids
- 2) Efficient and comprehensive cost & revenue planning for projects
- 3) Track and analyze planned and actual cost & revenue of the projects
In financial planning below functionalities are available :
- 1) Unified financial planning (internal resources, material, external resources etc.)
- 2) Financial (cost & revenue) planning for bids
- 3) Cost forecasts
- 4) Cashflow planning
- 5) Change requests with financial impacts
- 6) Analyze and control the cost & revenue of the projects
- 7) Reports available with in SAP Commercial Project Management provide you real time information on your project’s financials which can help you to monitor and control your project cost and revenue.
Steps: How to create the Financial Plan in CPM :
- 1) Create a master project in SAP Commercial Project Management
- 2) Create financial plan
- 3) Create a bid structure
- 4) Perform financial planning using resources (Materials, Activities, expenses etc.)
- 5) Create “Baseline” version from the “Quote” version
- 6) Create “Current = Baseline + CR (Unique)” version from “Baseline” version
- 7) Create a mapping between bid structure and commercial project structure
- 8) Transfer planned data to SAP S/4HANA Project Systems
3) Project issue and change management :
Project Issue and Change Management provides solutions that allow users to handle project deviations along with the ability to plan detailed changes to costs. During the execution of projects (for example, construction, research and development (R&D), consulting, or IT projects) the conditions, design, scope, and other items within the projects can change. This has an impact on factors such as client relations or the cost, quality, schedule, resources, safety, reliability, feasibility, maintainability, and operability of the projects. Undocumented changes in a project and a methodology framework insufficient for controlling the change process are some of the major reasons why projects fail or are not profitable. Companies that sell project-based services require efficient management of change processes to :
- 1) Log issues
- 2) Attach related documents and link relevant URLs
- 3) Assign responsible people
- 4) Create tasks to resolve these issues
Challenges
Traditionally, project teams didn’t have appropriate tools to manage issues and change requests arising on a project. Generally, teams use tools like excel spreadsheets, paper-based documents, emails, or some standalone software where information is not integrated with the applications managing project details (financials, schedule etc.). There have been many drawbacks due to the missing integration between application managing project and project issues & change requests and few of the common ones are given below –
- 1) Inefficient paper-based or excel-based processes. No single source of truth which is available to all the project stake holders (internal / external)
- 2) Inconsistent recording of issues and change requests. Incomplete documentation and information.
- Long cycle to review and approve changes
- 3) Missing integration between applications (Issues & Changes and Project). This may also affect project budget and cost overrun.
- 4) Inefficient tracking of changes during project life cycle.
Project Issue and Change Management in Commercial Project Management can help project stake holders to identify, document, communicate and track issues and changes. The financial impact due to the same can be estimated and sent for approval before these changes are implemented.
Project Issue and Change Management (CA-CPD-PCM) provides users with the following features :
- 1) Processing of issues and change requests relevant to different types of business objects (PS objects, financial plans, purchase requisitions, sales orders, CRM opportunities, SAP Portfolio and Project Management objects, or DMS documents)
- 2) Integration with the multiple application components in SAP S/4HANA to allow the possibility to exchange data and post updates
- 3) Cost and revenue planning of changes using Project Cost and Revenue Planning in CPM
- 4) Documentation and processing of project issues and changes using DMS documents, reference URLs, and attachments (such as word processing documents, spreadsheets, drawings)
- 5) Monitoring of issues and change requests using the issue and change log
- 6) Multi-level approval process for change requests
- 7) Reporting and analytics