Cost Distribution from a common WBS element
Business Scenario : All the common expenses like project management expenses gets posted to a common WBS element. This cost has to be distributed to other WBS elements based on the number of employees employed in each WBS element (or based on any other proportion).
Step 1 : Execute program RKALPSAC to enable WBS elements as sender for the assessment cycle. (SE38)
Step 2 : Create WBS element group using KJH2 ( the set of WBS elements to which the common cost is to be allocated)
Step 3: Create a statistical key figure (SKF) using KK01 to represent the number of employees.
Step 4 : Plan the SKF for the WBS element group in CJS2
Step 5 : Create a cost distribution cycle using KSW1 (In Senders/Receivers tab, sender should be common WBS element ; receiver is the WBS element group that is created )
Step 6 : Run KSW5 periodically so that the cost gets distributed from the common WBS element.
Hi Jindow Joseph,
Its informative article and appreciate your initiative to share with group.
Can you let us know where and what kind of business requirement drive this kind of distribution of costs from common WBS to other WBS elements.
In my experience I have used the WBS elements to capture costs of various kinds and Project Management is one among them. In my project structure always maintained specific WBS elements keeping in mind the business requirements in order to capture costs related to various heads. But we never tried to distribute those costs to other WBS elements since referenced WBS itself was created to capture costs incurred against PM or whatever you say.
Looking forward to hear from you and thanks in anticipation.
You are right , all the project expenses get posted into PM WBS (common WBS element ). In our project, rest of the WBS elements (at the same level) represent subassemblies of a major ETO product. The controlling team wants to know the total cost incurred by each sub-assemblies.Project management cost cannot be assumed to be equally distributed as the effort for each sub-assemblies varies.
Kindly let me know if further clarity is required.
Thanks for clarification. But one thing i can say, i am not in line with your statement because PM expenses part of project expenses and PM is one of the department exists in an organization along with other departments like, Engineering, Design, Quality, Services etc.
If you want to say that, PM means top brass in the organization like VP, Directors, etc then, they book cost to the project cost center and not to the PM WBS element. Any have its your business call and your decision.
Was wondering if we could allocate the cost to receiver WBS elements based on the rolled up costs (from assigned networks PM orders etc...) on the receiver WBS elements,
I noticed that we could use assessment to distribute costs based on costs posted directly on the receiver WBS elements, I haven't been able to get it to distribute on based on costs on the assigned objects..
Perhaps we might have to settle the assigned objects into the receiver WBS elements (networks/PM orders first) and then run the assessment cycles
Hi Jindow Joseph,
Thanks for sharing the helpful information .this document helped our team to activate WBS as per the client requirement.
Nice & Help full information.