Introducing Customer Project Management for Professional Services

In this lesson, you are introduced to the functionalities and applications of SAP S/4HANA Cloud in managing customer projects within the realm of professional services.

You gain an understanding of the benefits, roles, responsibilities, and workflows involved in orchestrating customer project management, including planning, creating, maintaining, and reviewing projects.

The lesson includes an exploration of key process steps such as managing customer projects, maintaining work package staffing, recording time and expenses, processing invoices, analyzing project performance, and conducting financial activities.

You will also delve into the benefits of this scope item and how it interacts with related scope items to form a comprehensive solution for project management.

Throughout the lesson, you are introduced to crucial components of the project management framework, such as the project structure, service expense types, and contract types. You also learn the step-by-step process for customer project management, from project creation to financial close procedures, and understand the tools available to ensure effective project staffing and financial analysis.

Finally, this lesson provides you with the opportunity to understand fundamental concepts such as project stages, work packages, SAP Fiori applications, project roles, and responsibilities, among many more. By the end of the lesson, you will be able to effectively navigate the SAP S/4HANA Cloud customer project management landscape and maximize its functionalities to ensure optimal project performance.

The Customer Project Management scope item realizes the key steps of the end-to-end process for Project Services. It covers core processes like Planning, Creating, Maintaining, and Reviewing the Customer Projects with required project structure-related entities like activity types, projects roles, resources, and so on. This scope item offers you the complete lifecycle of the customer project and facilitates the monitoring of financial Key Performance Indicators (KPIs).

The Project management framework is inherently coupled with the sales engine of the Sales module. It allows you to create customer invoices for time and expenses (including external services), recorded against a customer project. Invoices can be created on a time and materials basis, a fixed-price basis, or as periodic services, as usage-based, or a combination of all types. It’s imperative to maintain all the prerequisite data, like the cost and selling unit prices of the Activity Type/Materials to calculate the cost and revenue for the customer projects.

You can also derive contract values and obtain automation calculations on the contract margins. After the customer invoice is issued, customer payments can be monitored. During period-end closing activities, accounting and financial close activities can be performed. This scope item also supports the analysis of project profitability based on project costs and revenues.

With recent developments, you can now create customer projects automatically from project items in solution orders. Project items in solution orders (SOPR item category) indicate services to be delivered as customer projects and it requires the 4GT scope item (Solution Order).

Customer Project Management allows you to:

• Create and manage customer projects.
• Maintain customer projects during different phases.
• Maintain work package staffing of customer project.
• Procure external services for customer project.
• Record times and expenses for customer project.
• Maintain customer project billing.
• Create customer invoices.
• Analyze customer projects.
• Perform accounting and financial close activities.
• Perform period-end closing activities.

The Customer Project Management benefits are:

• Defining and managing projects easily.
• Staffing projects intuitively.
• Integrating to SAP SuccessFactors Employee Central natively.
• Entering employee times for all project members.
• Recording project-related expenses: single source of truth, no aggregates.
• Deciding quickly with cross-project and client reporting.
• Drilling down to all project-related analytics and KPIs flexibly.
• Managing billing request proposals.
• Creating a single customer invoice with all necessary details.
• Performing fast periodic closing, with no more reconciliation.
• Making predefined processes and business content available.
• Creating a baseline of an internal project and compare it with the current one.

The project partner, the project controller, and the project accountant can be maintained for a project. All have access to the project and see it in their respective workload. They perform key activities related to the customer projects, starting from maintaining projects to determining revenue and profitability analysis during the execution of the projects. Briefly, to segregate some duties, they are listed as follows:

Project manager (PM)

Responsible for the project.

Project partner

Monitors all related projects.

Project controller

Accesses the project from a controlling perspective.

Project accountant

Controls billing activities.

The figure depicts which roles in your organization are correlated to the relevant scope items in Project Services.

The figure and table show an example of the core responsible roles in Customer Project Management.

The main SAP Fiori applications used to structure the project and its stages are:

• Create Customer Projects: This helps you to create the customer projects in reference to your customers. It is mandatory to have the required master data and the configurations in place for the project creation. The Service Organization which acts as your delivery/selling unit is aptly set and associated with the required organizational entities. Once a project is created, it is created in the In-Planning stage by default.
• Plan Customer Projects: Once the base project has been created, you can further view it in the Plan Customer Projects app. Here, you maintain the next steps of your projects, like assigning the work-packages, items, resources, billing, and into further stages. You can also create new projects directly here, as well as copying it with reference to another project. Deletion is also possible for the projects but only for those which are at the In-Planning stage.

The main project stages and activities are described in the following table:

The figure depicts the sequence of stages in Professional Services.

The project structure is determined by the current stage of the project. It follows a three-tier hierarchy: the first level includes the project definition, general information, and the roles responsible. The second level is made up of work packages, which can be based on time or units. Within each work package, the third level consists of assigned work items.

Work packages can be of two possible types:

Resource-Based (or Time-based): Costing and pricing for these work packages are based on the resources needed to complete them. These resources are work hours of the roles required in the work package, expenses for travel and others, and other more resources such as materials for example.

Service-Based (or Unit-based): These work packages are dedicated to complete and deliver a certain number of a certain service unit. Service units can refer to any type of defined deliverable such as equipment or software installations, tickets resolved, or any other. These work packages are assigned a unit of measure and the quantity of that unit that are delivered. Costing of these work packages is based on the resources (roles, work hours, expenses, and extra resources) needed to deliver the units of service. Pricing is defined by the sales price of the service units.

When the project stage is moved to the Contract Preparation stage, billing items are automatically created for each of the billing types of the project (time and material, fixed price, periodic service, usage-based). A single Sales Order is automatically created when the status is set, associated to the project header and one Sales Order Item is created for each of the billing items. Work packages are assigned to the corresponding billing item, depending on how they will be billed.

The following figure shows a sample project structure.

The project manager can enter the expenses which occur in the projects under the work packages. The following standard expenses are available:

• Accommodation
• Airfare
• Ground transportation
• Meals

The following contract types are available to be assigned to work packages within the billing procedure: