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I’ve come across few SAP customers who prefer to initially implement Internal Orders to manage their projects.    After some time they realized that their projects can be better managed in Project Systems component of SAP.    They then decide PS implementation.  To centrally manage all of the projects and get consolidated reporting the customer needs to migrate existing Internal Order projects to Project Systems.  This is specially required for long term projects for which some values are posted on Internal Orders and some more transactions are expected in future.

I faced this situation on a couple of projects.  I couldn’t find much information about it and have to do a lot of research to draw a concrete and viable solution.   Keeping in view my client’s good acceptance I thought to contribute it to SDN.

To migrate the data from Internal Orders to Projects we may need different activities for different scenarios.  I would recommend thoroughly analyze all the Internal Order and associated AUC posted and un-posted scenarios.  Discuss them with concerned your customer and create a scenario list.

You may find multiple scenarios in the system from simple ones to very complex ones, but mostly the following scenarios or a combination of the following scenarios is highly likely to be found:

Scenario No. 1 – Un-posted Orders:  Master Data of Internal Order is created but no values of Budget, Commitment, Plan or Actual Cost posted.

Solution: This one is the very simple right?  Just create Project Definition, WBS Element and you are done.  You can close the Internal Order now and use the WBS Element.

Scenario No. 2 – Internal Orders Posted with Actual Values:  Some of the Internal Orders may be posted with Actual Data from MM Invoices, FI Invoices, Travel Management and /or from other SAP components.

Solution: Create corresponding Project Definition and WBS Element(s).  Settle the Orders (KO88 or KO8G Transaction Code) to the WBS Element(s).  In case AUC values are posted to the Internal Order, AUC transfer transaction (ABUMN) may also be required from old to the new AUC.

Scenario No. 3 – Budgeted Orders:  Internal Orders posted with Budget values.

Solution: The posted budget values have to be returned with KO26 transaction, as there is no Budget Transfer facility from an Internal Order to a WBS element.  The same values can be added to the corresponding WBS element with CJ30 or CJ37 Transaction Code.

Scenario No. 4 – Orders with commitments Posted:  Some of the orders may have open commitments with Purchase Requisitions or Purchase Orders.

Solution: In this case we may need to change the PR with ME52N or PO with ME22N transaction.  Replace the PR/PO account assignment from the Internal Order to the new WBS element. The system will close the commitment from the Internal Order and raise commitment on the WBS element.

Scenario No. 5 – Planned Internal Orders: Orders posted with Overall Plan, Cost Element Plan and / or Statistical Key Figure Plan data.

Solution: Settle the plan data to the corresponding WBS Element with KO9E or KO9G transaction codes.

Scenario No. 6 – Settled Orders:  Fully settled Internal Orders may not require migration to Project Systems.

LSMW programs or ABAP BAPIs may be used for uploading data if the data volume is very high.

Some of the projects may not be fully migrated.  For example PR, PO and GR are posted on an Internal Order but the IR is still awaited.  In this kind of situation it’s very difficult to migrate the Internal Order.  In such kind of situations define the business process to handle the pending transactions and migrate them latter, once the limitations are removed.  

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35 Comments

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  1. Amaresh Makal

    Dear Amir,

    Very good write up with all real time scenarios.

    Definitely this is going to be very useful to fellow consultants.

    Keep up the good work.

    Regards,

    Amaresh Makal

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  2. Haroon Arshad

    Very nice write up Amir,

    Definitely gives you a clear idea to simplify complex process into simple easier tasks.

    Its a good reference HOW TO for me.

    Regards,

    Haroon

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  3. Mahendra Dighe

    Thanks Amir for sharing!

    It is indeed valuable inputs from you.

    Hope to see many more blogs addressing some typical requirements of Project Industries.

    Regards,

    Mahendra

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    1. Sandeep Atre

      Hi Kishore,

      My name is Sandeep Atre. I have read your Assembly Project related
      documents. They are too good.

      I am working on a project which business is 1) selling New Customized
      centrifugal Pumps & 2) Spare Parts of Pumps.

      1. Pumps – Every manufactured pump is customized. Actually
        Assembly Project business scenario (Make to order) When Sales Order gets created then in Back hand Project gets created
        & once MRP run gets executed then for subsequent documents (Plan Purchase order,
        Plan production order) WBS become a Cost Object
        and cost is tracked via WBS
        & at month end through Result Any. WIP gets calculated & finally
        settlement of WBS. From manufacture of pumps till its dispatch/delivery  i.e. VL01 its time journey of 1 or 2 years)

      1. Spare Parts sell business: Spare Parts which they sales
        are also unique. Here also they used make to order scenario only. Here Cost
        Object is Sales Order. When MRP run gets executed then for all subsequent documents (i.e. Purchase
        Orders, Production order) Sales Order becomes cost object 

      On this business scenario Please can you share with
      me any link, or SAP book name or comprehensive document which can help me to configure
      & map this scenario with respect to FI, Product Costing & COPA.

      Best Regards,

      Sandeep Atre

      satre@rediffmail.com

      Mobile -9967061972

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      1. Amir Hassan Post author

        Hi Sandeep,

        Both of the scenario you described are very well integrated processes in SAP. I would suggest the following books for these scenarios:

        AC505 – Product Cost Planning

        AC520 – Cost Object Controlling

        AC605 – Profitability Analysis

        If in case you need further assistance, please drop me an email at amirfico@gmail.com.

        Regards,

        Amir

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  4. Mohan Desai

    Thanks Amir,

    Written with total clarity in mind. Definitely will be most useful to SAP brethren. Its better that you have shared your quality experience with others than waiting for some question to appear in forum.

    Keep it up…

    MRD

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  5. Sudhakar Pappu

    Hi Amir,

    Indeed its good effort to compile all the processes in one place to pubslishing for members benefit.

    Just wanted to differ with your inital statement… my point is eveloution of PS is not from Internal Orders

    There are several businesses still using Internal Orders to capture costs inspite of using PS explicitly.

    Let me elaborate on this point, when projects (very high level risks are involved to execute) are in bidding process phase which require lot of efforts from Project Management, Production, Sales, Marketing, Purchase to formalise the base line schedules and costs. Obviously they need to record their working times and actual costs incurred but no project was set up in that situation Internal Orders come in handy to post your costs.

    In order to plan and post acual costs business creates Internal Order to capture initial level (time gap arrangement).

    Once firm order received and Project created all the costs would be posted to project with clear description so that these expenses incurred during bidding phase. Eventually Internal was closed.

    Regards,

    Sudhakar

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  6. Amir Hassan Post author

    Hi Sudhakar,

    Thanks for your comments and appreciation.  We discussed here about Migration to PS from Internal Orders.  Off course, there are many SAP Clients going with Internal Orders only.  This write up is only for the clients who decide to migrate Internal Orders to PS.  Why clients go for PS? is another topic, which we may discuss in an another blog…….

    Thanks again.

    Amir

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    1. B P singh

      Hi Amir,

      A stupendous effort and information indeed!!

      Just a query from my side w.r.t scenario 4-

      Can we change the account assignment in ME52N/ME22N from internal order to WBSE? As the account assignment category cannot be changed from F to Q/P,do not we need to close the PR/PO and then raise a new PR/PO with the new account assignment category?

      Thanks and Regards

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      1. Amir Hassan Post author

        Hi B P Singh,

        Thanks a lot for appreciation and sorry for late reply.  You’ve raised very good question, I must say….

        To answer, the Account Assignment Category can be changed from F to P/Q if no subsequent documents exist for the PR/PO as I mentioned in Scenario 4.

        If actual values are posted for a PO/PR and we can’t change AA Category, then we should deal with it as mentioned in Scenario 2 I think.

        Kind regards,

        Amir

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  7. S. Kadiam

    Good blog Amir

    Did you think about the option of linking the Old IO (assignment on IO master data) to New WBS? Could this be an option in any of the scenarios?

    Regards

    Sreenivas

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    1. Amir Hassan Post author

      Hi Sreenivas,

      You have highlighted a very valid option to link old Internal Orders with the new WBS elements.  In this case the cost should become part of the same Project where the WBS element is created.  Hence there may be no need of migration.  However, in practice and in reality, most of the clients want to be benefited for extended functionality of PS.  Hence they prefer to “migrate”.  Secondly the cost actually remains within the Internal Orders which are under the new WBS elements.  So you may see the same cost in PS reports and also in Internal Order reports, which may be confusing for the users and wouldn’t be a true reporting. In other words it may be “Misleading”.  Hence migration is a proper and better solution.

      Thanks for sharing your thoughts.

      Cheers

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  8. Harsh Saxena

    Good Blog,

    I am facing combination of scenario 2 and 6 at my current client.

    I was thinking of closing internal order and attaching internal order to statistical wbs eleemnt for on-going projects, so reports with show the values from internal orders too.

    Regards,

    Harsh.

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    1. Amir Hassan Post author

      Thank you Harsh.  I’ve just replied to Srinivas on the same question above. Please see the following reply and do share your thought if it makes sense?

      “You have highlighted a very valid option to link old Internal Orders with the new WBS elements.  In this case the cost should become part of the same Project where the WBS element is created.  Hence there may be no need of migration.  However, in practice and in reality, most of the clients want to be benefited for extended functionality of PS.  Hence they prefer to “migrate”.  Secondly the cost actually remains within the Internal Orders which are under the new WBS elements.  So you may see the same cost in PS reports and also in Internal Order reports, which may be confusing for the users and wouldn’t be a true reporting. In other words it may be “Misleading”.  Hence migration is a proper and better solution.”

      Kind regards,

      Amir

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  9. Shareeq Hussain K M

    Excellent Blog Amir.

    for Internal Orders with Direct Actual Costs  ,Manual Reposting of Actual costs from Internal Orders to Projects. KB11N could be used.

    Regards,

    Shareeq

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    1. Amir Hassan Post author

      Thanks a lot for the appreciation Shareeq.

      Yes, you are right Manual Reposting of Cost could also be an option where Settlement of Internal Orders if volume of transaction data is quite low.  If there’s huge volume of data on the Internal Orders, Settlement would be a good choice.

      Secondly with Manual Reposting, back tracking of cost from WBS elements to IO and to the original / source documents becomes an issue latter on since Reposting functionality doesn’t post a separate credit on sender.  The Total Tables are posted with negative with Reposting.

      We can also use Period Reposting of Cost functionality for high volume Internal Orders but it may also have the same issue of Cost Traceability

      Hence I would recommend using Settlement over Reposting.

      Thanks again and kind regards.

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  10. Jindow Joseph

    Thanks.. Did you ever try to account assign the internal order to WBS and bring its data to WBS element and then close out the internal order ? Can that help?

    Regards.

    Jindow Joseph

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  11. Luis Torres

    Can you elaborate on what was the driver for the decision to migrate from I/O to PS? I am trying to convince my client that they are better off using PS from the get-go as opposed to start with I/O just to do this kind of migration after

    Thanks

    Luis

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    1. Shareeq Hussain K M

      Luis,

      If you already have a Legacy system in Place , you may have to opt for I/O. The reason being mapping everythin with old System with New System (SAP) may be a difficult task.  I/O is just a cost monitoring system at the top most level of the Project.

      Thanks,

      Shareeq

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