Professional Services in S/4HANA Cloud
Professional Services is an SAP industry solution module that is exclusively available in S/4HANA Cloud Essentials. It targets companies that provide services like consulting and outsourcing. Essentially it offers them project management functionalities. But, S/4HANA Cloud Essentials also incorporates a basic version of the classic Enterprise Portfolio and Project Management (EPPM) module that includes SAP Project System.
Professional Services and EPPM share quite some functionalities. Both support customer and internal projects. Technically, they use the same typical database tables: PROJ for projects, and PRPS for WBS elements (Work Breakdown Structure). Both are integrated in similar ways with other SAP functionalities like financial reporting, time recording and purchasing. Professional Services, however, has its own CDS views and Fiori apps, which are totally different from those in the EPPM solution.
What are the main differences in business functionality between the two modules? Let’s take a look at some key capabilities of Professional Services to understand in what way it is different from EPPM.
1. Dedicated Fiori apps for project management
Professional Services has dedicated Fiori apps that are not available in EPPM, and vice versa. The most important ones are Plan Customer Projects and Plan Internal Projects. These offer a wide range of PM functionalities such as project and WBS structure creation, status management, resource assignment, cost planning (baseline + current), billing plan maintenance, project status & financial overview, … For customer projects you can also navigate directly to the billing app.
2. Basic and advanced resource management
In Professional Services you can easily assign resources to WBS elements by selecting the role (activity type), service organization and employee record. The system automatically calculates planned costs and revenue based on the number of planned hours and the rates.
Want to make the cost rates more granular? That’s entirely up to you. You can use dimensions such as company code, cost centre, intercompany (yes/no), receiving company, WBS element, employee number, etc.
As an assigned resource, you see the task automatically in the ‘My Timesheet’ app. The project manager decides per project if non-assigned resources can also book time or not, by using the ‘restrict unstaffed posting’ flag.
Advanced Resource Management is not included in the default solution scope. Advanced Resource Management will help you to further optimize project staffing. It gives you a better view on utilization rates and requested resources. Overbooked resources and resources with free capacity can be easily identified. You can take action based on the current assignments, open resource requests, and the skill set of each individual resource.
3. Project billing
In Professional Services the billing plan is maintained in the ‘Plan Customer Projects’ Fiori application. A sales order (specific order type SO03 ‘Sales Order Service’) is created and updated in the background. The module supports several types of billing: fixed price, time & expenses, periodic service and usage-based.
You start the billing process from dedicated apps to create firstly a debit memo request, optionally a preliminary billing document, and eventually the final billing document. If you invoice a project on a time & expense basis, then you can also postpone and write-off amounts.
Note that a move to a new billing process has been ongoing for a couple of releases. This process is already available for fixed price and time & expenses billing. It provides a flexible material determination for time and expenses based on the DIP profile configuration that is also used in S/4HANA On-Premise. In the original billing process, this customizing is not available, and the activity/expense types are limited to the ones that are standard delivered.
4. Limitations of Professional Services
The above features are an advantage when using Professional Services compared to EPPM. However, Professional Services also has limitations and lacks a number of features.
Professional Services is intended for non-logistics projects. There is no integration with demand management for stock materials. Outbound deliveries linked to projects are not covered. Technically it is possible to link free of charge sales orders to a project via WBS elements, create demand and do deliveries for the project. However, this process is not officially supported by SAP for Professional Services, whereas in EPPM it is supported as an SAP Best Practice.
In project management itself, there are also a few notable differences. An important one is that Professional Services contains only a 2-level structure of WBS elements. The first level is reserved for the billing WBS elements, which leaves only level 2 for subordinate cost WBS elements. In other words: the structure of cost WBS elements is flat, no hierarchy is possible. EPPM does have a multilevel structure, just like in S/4HANA On-Premise.
Professional Services definitely contains very valuable functionalities for companies in the industry that are not available in EPPM (Cloud or On-Premise). Those functionalities could also be interesting for companies that do not exclusively focus on services, but also have manufacturing or engineering activities linked to their projects. However, due to limitations in Professional Services in terms of logistics, EPPM may be a better fit.
For professional services companies pur sang, this industry solution may be a great fit as they will benefit most from the dedicated Fiori apps, specific billing processes and advanced resource management functionalities.
If the multi-level hierarchy is not available in Professional services Cloud how can we realize the requirement of managing large Professional services program which would encompass of multiple projects. Even the projects would have multiple workstreams (for e.g - In IT services scenario; Development, Testing and Support workstreams) where each workstream would be a combination of multiple work packages given the size of the team involved in the workstreams. Can these multi-level hierarchy requirements realized in Professional services public cloud ? Can you please let me know your thoughts on this.