Enterprise Portfolio and Project Management in SAP S/4HANA Cloud 2108
In this blog post I’d like to outline the innovations for SAP S/4HANA Cloud 2108 in the area of Enterprise Portfolio and Project Management. These are the topics that are covered:
- Detailed Descriptions for Enterprise Projects (Scope Item 1NT, 1YF)
- Plan and Trigger Procurement of Stock Materials into Project Stock (Scope Item 4RF)
- Settlement to Multiple Assets Under Construction (Scope Item 1NT)
- Budget Supplement and Return Capabilities (Scope Item 1NT)
- Enhancements to EPPM-SD Integration (Scope Item 4I9)
- Alignment of Terms Across Apps and Scope Items
In case you are short of time, get a glimpse of the new features by watching my product highlights video:
Detailed Descriptions for Enterprise Projects
During the last couple of quarters, we’ve invested heavily into our ‘Project Planning’ SAP Fiori application in order to rebuild functionality that we’ve been offering as part of our ‘Project Builder’ application, and to allow for an easy and intuitive use across all applications.
With this quarter, we are taking the final steps towards the replacement of the ‘Project Builder’ application and allow for detailed descriptions for enterprise projects within the ‘Project Planning’ application. This means that project managers and project financial controllers don’t need to switch apps anymore, but they can maintain the detailed description of the project header and WBS elements directly in the SAP Fiori apps. As we now start deprecating the ‘Project Builder’ application, project stakeholders will need to make use of the SAP Fiori apps going forward.
Read more about the deprecation of the ‘Project Builder’ application in Sven Nachtigall’s blog post.
Detailed descriptions are important to create transparency, especially when there are many parties involved in the same project. Not having to switch applications anymore but being able to maintain the information directly in the environment will reduce the efforts for all parties involved. On top, it allows for better communication within the project teams as team members and stakeholders can see the expected scope and deliverables directly in the SAP Fiori apps.
Figure 1: Detailed Descriptions for Enterprise Projects supports you in maintaining detailed descriptions of project headers and WBS elements in SAP Fiori apps.
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Plan and Trigger Procurement of Stock Materials into Project Stock
In August 2020, we have shipped the business object ‘Demand for Service and Consumables’ along with the business process Project Control – Procurement (scope item 4RF) which helps you to monitor your procurement from a project perspective.
Since then, we’ve been working on several enhancements in this area to further strengthen the procurement integration. With SAP S/4HANA Cloud 2108, we allow project procurement controllers to plan and trigger procurement of stock materials into project stock by using the new demand type ‘Project Stock, Direct Purchasing’. This new demand type is currently made available for investment projects only, because investment projects are the only enterprise projects which support project stock as of today.
While we have supported material as well as service demands already before, the material demands could only be used for non-stock materials in the past. This means that the consumption is followed right after the delivery. The new demand type ‘Project Stock, Direct Purchasing’, though, allows for the materials to be put to stock before consumption. When stock materials are kept and managed in stock and the consumption happens at a later point in time, there are no immediate costs. Only after consumption actual costs will follow immediately which is also documented with a goods receipt.
The advantage of project stock compared to plant stock is that the requested materials can only be consumed by the WBS elements and assigned orders to which the project stock belongs. In other words: The materials cannot be consumed by other projects or orders which are not assigned. This ultimately helps you in your planning and increases your project-procurement efficiency.
Figure 2: The new demand type ‘Project Stock, Direct Purchasing’ allows for materials to be put to stock before consumption.
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Settlement to Multiple Assets Under Construction
During the project lifecycle – especially considering investment projects – one important step is the settlement of projects. Flexibility during the settlement process is crucial and can lead to a clearer overview of costs.
With this release, we enable investment projects to settle to multiple assets under construction (AuCs). Project financial controllers can define a new investment profile and source structure. Based on this source structure, costs can be settled from WBS Elements to multiple AuCs. When a WBS element is released, multiple AuCs will be created. With this feature in place, we allow for period-end closing as well as final settlement from multiple AuCs to fixed asset, cost center, G/L account, and WBS elements.
One of the biggest advantages of this innovation is that we can automatically separate tangible and intangible costs, which means we can also flexibly capitalize only tangible costs.
This functionality is available for investment project profiles only and is enabled on project header level as well as on WBS element level.
Figure 3: Enabling investment projects to settle to multiple AuCs allows for a flexible capitalization of tangible costs.
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Budget Supplement and Return Capabilities
Already with SAP S/4HANA Cloud 2105, we have released the SAP Fiori application ‘Manage Project Budget Transfers’. Using this app, project financial controllers can easily adjust budget plans on WBS element level by reducing some amount from one WBS element or increasing some amount for a WBS element. Moreover, this application allows for the allocation of overall budget to a specific project with the benefit to further manage the budget within the project at a later point in time. The exact allocation doesn’t need to happen from the beginning, but this app can be used to do the more detailed allocation later on.
While this scenario always requires a sender and a receiver WBS element to transfer budget from one to another WBS element, we have worked on further innovations to bring more flexibility into the financial aspects of a project.
With SAP S/4HANA Cloud 2108, we support budget return and budget supplement. With these additional capabilities as part of the app ‘Manage Project Budget Transfers’, project financial controllers can return extra budget from one WBS element, or supplement additional budget without the need of defining both sender and receiver WBS elements. This allows for a flexible adjustment of budgets within projects.
Figure 4: The SAP Fiori app ‘Manage Project Budget Transfers’ has been enhanced to cover budget return and budget supplement capabilities.
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Enhancements to EPPM-SD Integration
With the integration of sales order and enterprise projects which we have introduced with SAP S/4HANA Cloud 2005, you can assign sales order items to billing elements. When account assigning them, you can derive profitability characteristics directly from the sales order. This saves manual effort for revenue recognition postings and on top you also get real-time insights into revenue recognition data and profitability.
During the last couple of quarters, we have not only added several scenarios, but we’re also supporting more complex hierarchical project accounting scenarios through the enablement of multiple billing elements within a project.
With the new release, we are introducing additional item categories which support ‘Sales Kit’ business scenario. Sales kits are typically being used when products are sold as a bundle, e.g. computers which are likely to be sold as a kit together with a monitor, keyboard, mouse etc. As we see many use cases in the area of consumer products, high tech or manufacturing, there is a big benefit in using the new ‘Sales Kit’ business scenario as sales kits can easily be included into the order processing.
The following third-party item categories are enabled:
Sales BoM supports pricing and logistics on header level along with milestone billing.
- Item categories TAQ and TAE supports without milestone billing
- Item categories CBTQ and CBTE supports with milestone billing
Sales BoM supports pricing and logistics on sub-item level along with milestone billing.
- Item categories TAP and TAN supports without milestone billing
- Item categories CBTP and CBAO supports with milestone billing
Fig. 5: New third-party item categories support ‘Sales Kit’ business scenarios.
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Alignment of Terms Across Apps and Scope Items
Moreover, we have made some updates across enterprise projects to bring more alignment and transparency into our business processes and applications. During the last two releases, we have worked on these two topics to bring consistency throughout the terminology and to allow for an easier consumption:
1. Renaming of Business Processes
As part of enterprise projects, we mainly focus on capabilities around project control. To reflect this fact, we have renamed the following scope items to start them out with ‘Project Control’:
- Project Control – Capital Projects (35F)
- Project Control – Finance (1NT)
- Project Control – Intercompany (4AU)
- Project Control – Research and Development (35E)
- Project Control – Sales (4I9)
This change is also reflected as part of the SAP Best Practices Explorer.
2. Renaming of Work Packages into WBS Elements
In addition, we also rename work packages into WBS elements. This change is reflected in the applications directly throughout enterprise projects. As an example: As part of the ‘Project Planning’ application, we now refer to WBS elements and the former ‘Work Package’ page is now renamed into ‘WBS Element’ page.
The project header as part of an enterprise project is also a cost collector on its own, especially used for internal-order-like scenarios. In this case, the header is considered as a special form of a WBS element.
At this point I’d like to point out that the renaming of work packages into WBS elements only holds true for enterprise projects. For professional services scenarios, we still continue to use the term ‘work package’, because it’s a more specific term which is suitable for the particular context of professional services projects.
Fig. 6: The SAP Best Practices Explorer shows the renamed scope items as part of enterprise projects.
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For more information on SAP S/4HANA Cloud, check out the following links:
- SAP S/4HANA Cloud release info here
- Sven Denecken’s SAP S/4HANA Cloud 2108 Release Blog
- The Link Collection for Enterprise Portfolio and Project Management here
- Enterprise Portfolio and Project Management Community
- Latest SAP S/4HANA Cloud Release Blogs here
- Product videos on our SAP S/4HANA Cloud and SAP S/4HANA YouTube playlist
- Inside SAP S/4HANA Podcast here
- Best practices for SAP S/4HANA Cloud here
- SAP S/4HANA Cloud Community: here
- Feature Scope Description here
- What’s New here
- Help Portal Product Page here
- Implementation Portal here
Follow us via @SAP and #S4HANA, or myself via @CorinaReise and LinkedIn