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SAP Project System – A ready Reference ( Part 1 )

Being a beginner in SAP PS is a challenge. As a techie, When I started my ABAP Program in PS Module, I found a lot of scattered information but there is no article or blog with consolidated information even on basic terminologies of SAP PS. This blog is my attempt to provide an insight of basic techno-functional aspects and terminologies of SAP PS to a novice. 

In my first blog you will find the important terms of the PS module. I have tried to explain them with the help of an example. Following this is the next blog SAP Project System – A ready Reference ( Part 2 ) where the technicalities of the same are covered.

The Project System (PS) module of SAP is specifically designed to provide comprehensive and fully integrated project management functionality for SAP customers. A Project is a complex undertaking, bringing with it huge data of different type.

At the beginning of each project, whether it involves developing a new product, make-to-order engineering or internal organization, you need to define and set up the structures necessary to manage your project and incorporate them into your existing organizations and processes. Before you can run a project in its entirety, you must first describe the project goals precisely and create a structure for the project activities to be carried out. A clear project structure provides a basis for successful project planning, monitoring and control.

Organizational Structures in Project System:



You create and manage your project structure in SAP R/3 Project System, by means of work breakdown structures and networks.The WBS describes individual phases and functions of a project. Network contains the individual project tasks and the dependencies between them in the form of activities and relationships 

Some important terms:


Project Definition

Project Definition is general description of the project that you want to manage. It is a framework laid down for all the objects created within a project. It contains organizational data that is binding for the entire project. 

Work Breakdown Structure (WBS)

WBS is a hierarchical model of the tasks to be performed in the project. It provides overview of the project and forms basis for the project organization and coordination.It shows work, time and money spent on the project. You can use it to plan dates & costs and allocate budget. The Work Breakdown Structure can be displayed according to:

  • Phase
  • Function
  • Object

Individual tasks required to carry out the project is called WBS elements.



The network describes project processing. Thus the Network contains instructions on how to carry out activities in a specific way, in a specific order and in a specific time period.Main elements of network are activities and relationships. It forms the basis for planning, analyzing and monitoring time schedules, costs, & resources.



Activities are used to plan project staffing, capacity, material, PRTs, and service requirements. When activities are assigned to WBS elements, detailed view of costs, dates, and capacities at WBS element could be obtained. It’s a task in a network which has a defined start and finish. An activity can be broken down into activity elements.Three categories of activities in the Project System:·        

  • Internal Activities        
  • External Activities        
  • General Cost Activities 

Activity element

Activity element is an activity which is subordinate to another activity. Activity elements contain the same information as activities.Three categories of activity elements in the Project System:

  • Work elements
  • External Elements
  • General Cost Elements 

Activity Type

It’s a physical measure of activity output of a cost center .e.g. hours, number of units produced, machine times, production times. 


Milestones are the events in the project to which particular importance is attached Or which trigger predefined functions. In general they indicate transition between different departments or phases. Milestones are assigned to activities and WBS elements:In PS milestones are used to:

  • Trigger predefined functions in network activities.
  • Carry out earned value analysis.
  • Determine dates in billing plan for sales orders. 


You use relationships to depict chronological and technical dependencies between activities. The relationship determines the nature of the link between the individual activities. :

  • FS Relationship : An activity does not start until the preceding activity is completed.
  • SS Relationship  : An activity can not start unless another activity has started.
  • FF Relationship  : An activity can not be completed until another activity has been completed.
  • SF Relationship : An activity can not be completed until another succeeding activity has stared. 


It is a part of network control. It documents the state of processing for the network activities and activity elements. There are two types of confirmations Partial & Final.Confirmations are used to record:

  • The work center where the activity was carried out.
  • The person who carried out this activity.
  • The yield and scrap produced in an activity.
  • The actual values for the duration and dates. 


As a rule, projects are used to collect and monitor costs, but are not usually the final cost object. For this reason the costs in atypical project will be settled at the end of the period.To this end, you store settlement rules in the activity / WBS element requiring settlement. They contain information on settlement receivers, cost apportionment and control data. Settlement receivers could be cost centers, G/L accounts. Etc.


The budget is the approved cost structure for an action or project in a particular period.Budgeting differs from cost plan in that it is binding. In the approval phase you prescribe your project funds in the form of budget. It is possible to allocate overall and annual budget in parallel.

Work Centers

Work center represents the resources responsible for executing an activity. In a work center, you can enter the available capacity and an operating time. You can arrange the work centers in a hierarchy for capacity evaluation purposes.  Internal activities are assigned to work centers (resources) to be completed.A work center is a physical unit within a company where an activity is performed.

Profit Center

It is subdivision of business organization which is set up for internal management control purposes. Profit centers divide business up on a management basis. The basic aim of profit center accounting is to present areas of the business as entities operating independently in the market.   

Lots of jargons ….let me site an instance of the construction project  of a building.. 

Let say there is a construction company that is going to construct a Multi-Storey building. 

The first thing that needs to be created in the system is Project Definition. The entire activity plan for this project will come under this project definition. Overall budget needs to be estimated, assigned and get approved for the project. Project timeline needs to be decided.  Project could be then subdivided into separate parts which are actually WBS elements lets say in this e.g. we have 4 main WBS elements:

  1. Land Acquisition
  2. Procurement                    
  3. Construction
  4. General

To every above WBS, budget and time line need to estimated. 

Now to take an example we will drill down two WBS elements namely Land Acquisition and Construction.

– Land Acquisition could be sub divided into activities as in 

  • Generation of request document for the land.
  • Soil testing
  • Approval for construction
  • Preparation of purchase order of the land

Above 4 activities should be done in sequence. As in second activity will start only after request document for the land is completed and so on. Hence these activities have FS Relationship between them. 

– Now take WBS element Construction.

It could be sub divided in to floor wise tasks. Let say, we have four story building and each floor has 4 flats. So under WBS element Construction we may create separate sub WBS element for each floor. Each sub WBS element of floor may be divided further into last level of WBS elements one for each flat on the floor. This way we will have hierarchy of the WBS elements.Finally last level of WBS elements i.e. WBS elements of the flats will have activities like

  1. Plumbing
  2. Electrical work
  3. Flooring
  4. Painting
  5. Furniture

These activities form the Network.

Let say Plumbing and Electricity work are the external activities as they are given to a outside contractor. While the other activities are done by company labor so they are internal activities. Plumbing and Electrical work could be started simultaneously.While flooring needs be done once the plumbing and Electrical work is complete. Hence they have FS relationship and so on…. Now if we talk about milestones:

  1. First milestone could be purchasing the land
  2. Second could construct the base of the building.
  3. Third could be construct the floors
  4. Fourth could be completion of plumbing and electrical work for all the flats. And so on….

As I have said that Work center represents the resources responsible for executing an activity For the above activities, work centers could be the company labor required for the construction, labor provided by the external service center for plumbing and Electricity work. while Profit Centers could be the finally constructed flats. 





Project Elements Examples
1 Project Def Constructing the Buiding
  • Generation of request document for the land
  • Soil testing
  • Approval for construction         
  • Preparation of purchase order of the land 
3 Activities (Under  3rd WBS)
  • Plumbing( external Activities)
  • Electricity work( external Activities)
  • Flooring (internal activities)
  • Painting (internal activities)
  • Furniture
4 Relationship Flooring needs be done after the plumbing and Electricity work. Hence they have FS relationship
5 Milestones
  • First milestone could be purchasing the land
  • Second could construct the base of the building.T
  • hird could be construct the floors
  • Fourth could be completion of plumbing and electricity work for all the flats
6 Network Plumbing and Electricity installation are to be one contractor each. Therefore, there exist a network within on the activities of it under different WBSs.


( Referencee : The book : Functions in Detail : R/3 System – Project   Management in Engineering & Construction )

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