Describing PPM

Successful companies distinguish themselves from others by aligning their entire portfolio with the strategic goals of the company. This applies practically to the introduction of a new product or to companies in which project-based business processes play a central role. For finance and resource-intensive projects, it is important to recognize profitable projects and to monitor and control these accordingly.

The preceding video shows a schedule chart with the forecasted, planned, and actual starts of your projects.

The preceding figure shows how SAP Portfolio and Project Management displays an ECV chart of your projects.

SAP Portfolio and Project Management offers many functions that support you in managing your portfolios.

Key Functions of SAP Portfolio and Project Management:Some of the key functions of SAP Portfolio and Project Management are as follows:

• Portfolio definition:

  You can define several portfolios and subdivide portfolios hierarchically according to your own requirements by using portfolio buckets. This means you can monitor your portfolio items such as projects or product initiatives in an overview. The use of collections, reviews, or initiatives allows you to manage portfolio items of different portfolio buckets of a portfolio at the same time if necessary.

• Questionnaires and Scoring Models:

  You can define your own questionnaires to determine critical success factors for your portfolio items and initiatives. Using your own scoring model, critical success factors can be automatically derived from the portfolio item data and then used for prioritizing. These functions allow you to align your portfolios with your corporate goals.

• Financial and Capacity Planning:

  For the purpose of forecasting or for strategic planning, you can enter financial and capacity data at the level of portfolio buckets, individual portfolio items, or initiatives. You can then compare these data with detailed planning values or actual data, which can be combined in SAP Portfolio and Project Management from SAP ERP and Project Systems.

• Control:

  Reviews allow you to make decisions about portfolio items in SAP Portfolio and Project Management. For example, you can decide which IT projects should be implemented or which projects can be canceled. If necessary, you can also use simulations and what-if analyses to discuss alternative scenarios for portfolio items. Using individual decision points and versions, you can control and trace the flow of your portfolio items. Using workflows, you can also ensure that changes are communicated and therefore, your company’s guidelines are followed.

• Integration:

  You can link various project management systems such as Project System, Project Management, or Microsoft Project with SAP Portfolio and Project Management to uniformly monitor structural, date-related, or resource information. The unification of resource data also allows resource planning across all project management systems in SAP Portfolio and Project Management. Resource information, such as the availability of employees or their skills, can also be integrated in SAP Portfolio and Project Management for resource planning from personnel administration. In addition, integrating SAP Portfolio and Project Management with financial systems enables a standardized evaluation of the costs, revenue, budgets, or commitments of your portfolio items.

• Resource Planning:

  Along with the strategic planning of capacity requirements, you can also implement detailed resource planning for your portfolio items in SAP Portfolio and Project Management. This means that resource information from integrated Project Management systems and human resources can be combined uniformly in SAP Portfolio and Project Management. Fast entry screens allow resource managers tabular access to the resources and projects assigned to them.

• Reporting and Analysis Functions:

  SAP Portfolio and Project Management uses dashboards to display basic data of portfolio items in an overview. Traffic light functions alert you to exceptions and allow you to examine these exceptions in detail. Reporting cockpits allow tabular and graphical evaluations of the critical success factors of your portfolio items. For more detailed analyses, SAP Portfolio and Project Management provides predefined business content for use in SAP NetWeaver Business Intelligence (SAP NetWeaver BI). You can use queries directly in SAP Portfolio and Project Management to perform cross-portfolio analyses for the strategic alignment of portfolio items, or for the financial or capacity situation of your portfolio.

The table shows the roles and tasks in SAP PPM:

SAP PPM can be used by various groups of people with the relevant roles. The table, Roles in SAP Portfolio and Project Management (SAP PPM), shows the various groups of people and their typical tasks in SAP PPM. The individual tasks and the related business processes are explained in detail later in this course.

The preceding graphic shows different structure objects in PPM. The uppermost structure object is the portfolio. Authorizations that you assign to users at the level of a portfolio are inherited to all lower-level structure objects but can also be changed there if necessary. You can define several portfolios in PPM to set up completely separate areas of responsibility. Many PPM functions, such as reviews or reporting based on collections of portfolio items, refer to objects of only one portfolio. Cross-portfolio functions in PPM are resource planning or reporting using queries.

You can structure a portfolio hierarchically by using portfolio buckets. The portfolio structure can include any number of levels. The portfolio structure can be configured from an organizational or functional perspective.

The lowermost portfolio buckets, the portfolio buckets to which no other portfolio buckets are assigned, can be assigned portfolio items (or items, for short) and initiatives. Within a portfolio, portfolio items represent individual projects, services, product initiatives, and so on. Initiatives can contain several items and aggregate their data.

Portfolio items contain information about critical success factors, outline dates, financial details, or statuses, for example. You can perform strategic planning of finances and capacities on portfolio items and initiatives, but also on portfolio buckets. Strategically planned data of portfolio items can also be rolled up in the portfolio bucket and initiative to which they are assigned. In this way, you can compare strategic planning for a portfolio bucket with the total planned values of the assigned portfolio items.

You can manage portfolio items hierarchically within a portfolio using portfolio buckets. However, for reporting, it is necessary to view portfolio items from different portfolio buckets at the same time. That is why you can use collections, reviews, or initiatives in PPM. In all three cases, you can combine and monitor several portfolio items (of any portfolio buckets of a specific portfolio) together. However, you cannot include portfolio items from other portfolios.

Along with strategic planning and the entry of critical success factors at the portfolio item level, PPM also provides resource planning and a detailed breakdown of portfolio items. The preceding video shows the relationship between portfolio items and project management functions.

If you want to plan resources for a portfolio item or if you require a subdivision, you can link the portfolio item with a Project Management project. The associated project can be created automatically while saving the item. Optionally, you can create the portfolio item and the Project Management project independently of each other and link them together at a later time.

The Project Management project can be structured using phases and tasks. Tasks can be subdivided into subtasks. In turn, you can assign subtasks to the subtasks. You can create entire task hierarchies in Project Management. Other structure objects in Project Management include the project definition that functions as a framework for the entire project, as well as checklists and checklist items.

For resource planning with Project Management, you require a project definition. With reference to the project definition, you can then define roles. Roles are formal descriptions of the resources required for a project. A role definition contains tasks for the required time period, resource requirements, and any qualification requirements, which the resources fulfill. A role can be filled with one or more resources at a later stage. In this case, a resource can be an internal employee or even an external partner. Technically, these resources are depicted as business partners in PPM or Project Management. They are represented as business partners for which the availability or qualifications can be managed centrally in PPM.

If you linked a portfolio item with Project Management, you can choose Tasks to navigate from the portfolio item to the associated project. Choose Roles to go to the resource view of the associated project. The distribution of resources and evaluation of the availability of these resources is usually performed in PPM across all projects. For this purpose, you can use the Resource Management tab in the top-level navigation of PPM.

Resource planning data for a Project Management project, for example, the resource requirements or distribution of resources, can be integrated with the strategic capacity planning of the assigned portfolio item. This means that you can compare your strategic capacity planning with the values of your detailed resource planning at the portfolio item level, or even at the level of the parent portfolio bucket.