Introducing SAP S/4HANA Cloud, public edition - Professional Services

Objectives
After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Outline SAP S/4HANA Cloud Professional Services
  • Understand the scope of SAP S/4HANA Cloud Professional Services
  • Describe the SAP Project Companion mobile application

Introduction to SAP S/4HANA Cloud Professional Services

SAP S/4HANA Cloud Professional Services Features

The SAP S/4HANA Cloud Professional Services solution gains real-time visibility into your projects' performance and profitability, using the following features:

  • A single solution to create and manage all data related to projects.
  • End-to-end core finance and project accounting to deliver client value profitably.
  • Billing and invoicing to streamline the accounts receivable process.
  • One single customer invoice with all the details.

The SAP S/4HANA Cloud Professional Services solution deploys the right resources to the right projects at the right time in the following ways:

  • Seamless workforce management to optimize project staffing.
  • 360° insight into overall workforce, including contingent workers.
  • Powerful text-based search of relevant employee data to help find the right skills for the project.
  • Native integration of employee data between SAP SuccessFactors Employee Central and SAP S/4HANA Cloud.

The SAP S/4HANA Cloud Professional Services solution brings together business process and analytics in real time in the following ways:

  • Advanced capabilities to analyze data across the projects and clients and make forecasts.
  • Unified journal, real-time insight into finance processes and managerial accounting data.
  • Text-based enterprise search on any master data, document, and process related information.

Professional Services Business Background

SAP Cloud Solutions Support Professional Services Automation

SAP supports professional services automation across engagement, finance, and workforce management through different cloud solutions. SAP Customer Experience can be leveraged to create new opportunities and quotes. While doing so, prices can be sent from SAP S/4HANA Cloud to SAP Customer Experience. Once the opportunity is won and the sales deal is closed, the customer project can be created in SAP S/4HANA Cloud.

In SAP S/4HANA Cloud, customer project management processes enable project managers to create, manage, and monitor customer projects, including planning of work packages and efforts, staffing resources, and creating billing plans for services. When efforts have been recorded, project managers can release billing proposals, which are later used in the creation of invoices. Project managers can also monitor projects for financial performance, using criteria such as cost, revenue, margin, and variance.

The SAP SuccessFactors Employee Central integration with SAP S/4HANA Cloud offers you predefined content for data integration to enable end-to-end business processes across your core Cloud HR and SAP S/4HANA Cloud. Employee master data records, as well as organizational assignments of the newly hired employee in the SAP SuccessFactors system, can be replicated to SAP S/4HANA Cloud and used for staffing purposes. Similarly, outside experts can be assigned to projects as well. The integration of SAP Fieldglass with SAP S/4HANA Cloud supports, automates, and extends SAP S/4HANA Cloud contingent labor, including processing of job postings and statements of work, hiring and management processes.

The next section will take you through the SAP S/4HANA Cloud Professional Services end-to-end process flow in further detail.

SAP S/4HANA Cloud Professional Services End-to-End Process

SAP S/4HANA Cloud Professional Service provides integrated project management tools optimized to help your organization deliver projects on time and within budget. The software enables project managers to create and plan customer projects, as well as search for and assign resources, manage and monitor project execution, and address different billing scenarios. The integration of sales orders with project management enables the creation of invoices. The project profitability can be assessed based on the project costs and revenues.

Professional services companies may work both with own employees, but also with external workforce. Purchasers are able to create a purchase order (PO) for service items. Whether or not an approval process is initiated for the PO before it is issued to a supplier depends on the settings made during configuration. Both internal consultants and contingent workers are able to record time across customer projects, including text notes or implementation-specific data as required by each project. In case an approval process is in place, time entries are submitted to the project manager for approval.

The project manager can get an overview of all the open billing proposals within the projects assigned, prepare the list of billing proposals to be released and subsequently trigger billing processes. A billing proposal represents a collection of billing plan items that are planned to be billed on a target billing date. One or several billing proposals of the same project can be released simultaneously to create a debit memo request for further processing and billing. Finally, the billing clerk creates the invoices for customers.

SAP S/4HANA Cloud Professional Services Scope

Customer Project Management (J11)

Customer Project Management handles the complete end-to-end process of selling and performing project-based services to customers. It integrates sales orders with project management, allowing 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, a combination of both, or as periodic services. You can also derive contract values and show whether the contract margin is on plan. 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.

The following key process steps are covered:

  • Manage customer projects during planning and execution phase
  • Maintain work package staffing of customer project
  • Procure external services for customer project
  • Record times for customer project
  • Maintain customer project billing
  • Create customer invoices
  • Analyze customer projects
  • Perform accounting and financial close activities
  • Perform period-end closing activities

Basic Resource Management (2MV)

Basic Resource Management allows you to monitor the resource utilization and the staffing of resource requests for project roles, ensuring optimal resource utilization and efficient project staffing.

The following key process steps are covered:

Monitor resource utilization and project staffing

Advanced Resource Management (1KC)

Advanced Resource Management for project-based services allows you to monitor and manage resource utilization and the staffing of resource requests for project roles, ensuring optimal resource utilization and efficient project staffing.

The SAP Fiori apps provided for this scope item allow you to efficiently manage your resources while monitoring incoming resource requests. The apps assist in finding resources with free capacity and assign them to suitable resource requests. Open resource requests that require staffing are displayed, to identify and fill staffing with suitable resources.

The following key process steps are covered:

  • Create assignments quickly as requested by the project manager
  • Include skills from other assignments in skills matching
  • Calculate the availability match percentage based on the monthly distribution of required hours and free hours
  • Show the resource utilization on the top-level bars in the Gantt chart or change the time period directly in the assignment board app

Additional information:

This scope item requires an additional SAP S/4HANA Cloud license.

Time Recording (J12)

Time Recording for project-based services provides employees a quick entry method for recording time against customer or internal projects. In the time entry sheet, all work packages or work items assigned to the employee are visible. Nonbillable times can also be entered for full time accountability. Time recording on behalf of the employee and approval of time sheet entries is also possible.

The following key process steps are covered:

  • Record actual working times
  • Access time sheet on behalf of employees
  • Transfer time recordings to target components
  • Approve time sheet entries
  • Notify missing time
  • See an overview of team utilization for line managers

Sales Order Processing (J14)

Sales Order Processing describes the entire process sequence for the sales order maintenance and the billing process within the project-based services scenario. It includes the billing subprocesses and encompasses the creation of billing documents (invoices), credit memos, manual credit memo requests, and manual debit memo requests.

In the invoicing subprocess, the leading customer project management process triggers the creation of a debit memo request, which is transformed into a customer invoice.

In the credit memo subprocess, a credit memo is created with reference to an existing customer invoice.

In the manual debit memo subprocess, a debit memo request is created manually and then sent to billing where a corresponding customer invoice is created.

Finally, these processes transfer to the accounts receivable process.

The following key process steps are covered:

Create billing documents: Create customer invoices and journal entry

Create credit memo: Create credit memo with reference to customer invoice and journal entry

Create manual debit memo request:

  • Create manual debit memo request
  • Create customer invoice with reference to debit memo request and journal entry

Create manual credit memo request:

  • Create manual credit memo request
  • Create credit memo

Project Billing (4E9)

This scenario is used for billing customer projects as part of project-related services. It supports billing on a fixed-price, time-and-expense, periodic, and usage basis. It also includes payments on account and down payments for time and expense contracts, as well as down payments for fixed price contracts. One of the most important capabilities is the write-off and postponement of recorded amounts or quantities in the time and expense scenario. In addition, an approval workflow for project billing requests can be activated in various ways. 

The key process steps are:

  • Create, edit, and manage project billing requests
  • Create billing document requests

Event-Based Revenue Recognition (1IL)

Event-Based Revenue Recognition calculates and posts real-time revenue and cost adjustment for professional services for fixed price, time and material, and periodic service type projects.

Processes that do not write a prima nota do not result in any real-time revenue recognition postings (for example, changes of plan data do not directly result in revenue recognition postings). If necessary, period-end closing postings (periodic revenue recognition) correct the event-based postings. This scope item covers best guess reporting, as figures are only correct after period-end closing.

The following key process steps are covered:

  • Monitor event-based revenue recognition for projects
  • Manage real-time revenue recognition issues
  • Run revenue recognition for projects in period-end closing
  • Manage revenue recognition issues for projects
  • Report projects actuals
  • Report projects WIP details (relevant only for time and material projects)
  • Inspect revenue recognition postings

Internal Project Management (1A8)

Internal Project Management handles the complete end-to-end process of project-based services inside the company. This scope item realizes the main steps of the end-to-end scenario for project-based services focusing on internal project management and costs. It integrates project planning and staffing with core project management functionalities, procurement processes for materials and services, and time recording against the project work items. During period-end closing activities, accounting and financial close activities can be performed. This scope item also supports the analysis of project key figures.

The following key process steps are covered:

  • Manage internal projects during planning and execution phase
  • Maintain work package staffing of internal project
  • Procure external services for internal project
  • Record times for internal project
  • Analyze internal projects
  • Perform accounting and financial close activities
  • Perform period end closing activities

Service and Material Procurement (J13)

Service and Material Procurement for project-based services covers all relevant procurement processes of the professional services scenario.

Possible procurement sub-processes are as follows:

  • Service procurement - an external service is ordered. The external service company confirms the purchase order and performs the service. The supplier posts the expenses back. A supplier invoice is created and processed.
  • Material procurement for consumption - a consumption material is requested from a customer or internal project and a purchase order is created and sent to the supplier. The supplier sends the material to the company, and the goods receipt is checked. Finally, the supplier invoice is created, and the invoice is paid.
  • Procurement for third-party order processing - a material is ordered by the purchaser of the ordering company for an end customer from a supplier. The supplier ships the material directly to this end-customer.

The following key process steps are covered:

Procure services:

  • Create purchase requisition
  • Create and approve purchase order
  • Send purchase order to supplier
  • Confirm service from supplier
  • Post expenses of service
  • Create supplier invoice

Procure material for consumption:

  • Create purchase requisition
  • Create and check purchase order
  • Send purchase order to supplier
  • Post and check goods receipt
  • Create supplier invoice

Procure for third-party order processing:

  • Create purchase requisition
  • Create and check purchase order
  • Send purchase order to supplier
  • Post and check goods receipt
  • Create supplier invoice

Create contracts:

  • Create contract from scratch
  • Create contract based on purchase requisition

Service Procurement in Headquarter-Subsidiary Model (3TQ)

Service Procurement in Headquarter-Subsidiary Model manages the end-to-end process where the headquarters procures the project-based services from a subsidiary. The headquarters (using SAP S/4HANA Cloud, on-premise, or an SAP ECC system) requests the subsidiary using SAP S/4HANA Cloud to provide project-based services via a purchase order. On a purchase order basis, the project execution is handled by the subsidiary. The purchase order created at the headquarters is used as a reference in the project sales order and invoices can be created. The customer invoice creation triggers the generation of the supplier invoice at the headquarters. The supplier invoice is settled by the headquarters, leading to subsidiary payment.

The scope item combines the scope items Customer Project Management (J11), Sales Order Processing (J14), and Integration of Sales with External Buyers (2EL) at the subsidiary, and requires scope items Service and Material Procurement (J13) or Procurement of Direct Materials (J45) and Integration of Procurement with External Suppliers (2EJ) at the headquarters (provided that the headquarters uses SAP S/4HANA Cloud).

The following key process steps are covered:

  • Create a purchase order with details such as delivery schedule, supplier, and so on at the headquarters
  • Manage customer project (headquarters in this scenario) during the planning and execution phase at the subsidiary
  • Maintain work package staffing of customer project
  • Procure external services for customer project (optional)
  • Record times for customer project
  • Maintain customer project billing
  • Create customer invoices
  • Generate supplier invoice at the headquarters
  • Approve the supplier invoice
  • Perform accounting and financial close activities at the HQ and Subsidiary

Intercompany Processes (16T)

A company has an affiliate company. The affiliate company delivers a service to the ordering company in the course of a customer project. The affiliate company posts expenses and records time on the project. These expenses are transformed into debit memo requests. An intercompany invoice with reference to the debit memo request is created by the delivering company. The intercompany invoice is posted automatically also to the accounts payables of the ordering company.

The following key process steps are covered:

  • Create debit memo requests for intercompany billing based on intercompany travel postings and time confirmation from the delivering company
  • Create billing document (intercompany invoice)
  • Post intercompany invoice automatically from company to accounts payables of ordering company

Additional information: This scope item is excluded from the default activation.

Intercompany Billing for Cross-Company Cost Accounting Postings (4AN)

Applications (such as time recording for EPPM or services) can create cross-company cost accounting documents. Additionally, cross-company cost accounting documents can be created manually in controlling with the Manage Direct Activity Allocation app. For these FI documents, you must still create legal invoices, including tax. Based on resource-related intercompany billing functionality, you can create the necessary customer invoices with the affiliated company as customer. After the invoices are created, the system can automatically create mirroring accounts payable documents in the receiving affiliated company.

The following key process steps are covered:

  • Create an intercompany sales order in the affiliated cost sending company where the customer represents the affiliated cost receiving company
  • Create a debit memo request for cross-company cost accounting postings in the affiliated cost sending company
  • Create a customer invoice in the affiliated cost sending company
  • Create an accounts payable document in the affiliated cost receiving company

Additional information: This scope item is excluded from the default activation

Customer Project Analysis and Utilization Analysis (BGI and BGJ))

Customer Project and Utilization Analysis helps you with standard views and queries, and consumption of custom CDS view and CDS query for the purpose of analysis on your Project Margins, utilization and so on. It is based across several predefined analysis parameters such as company, service organization, cost centers, employee details, and so on as an example. This ultimately helps with analytical features with regards to overall commercial project management.

SAP Project Companion Mobile Application

The SAP Project Companion app is a useful tool for project management, and a collaboration between Apple and SAP. It is an application for you and your project team. Whether you are a manager or a consultant, there is a role-based version for both. The mobile app helps you and your team to work better together by providing an overview of the most relevant project information, quick insights, and a personalized timeline with important milestones for your project. To secure a fast collaboration, you may also opt to enable push notifications. Overall, the SAP Project Companion for Managers and SAP Project Companion for Consultants applications enable increased communication between project managers and project team members by providing the most important information and action items in one central location, with an easy-to-navigate user interface.

Professional Services face the following challenges:

  • Pressure to do more for less in a more transparent and quicker way.
  • Mature core services facing threats of new rivals with disruptive digital business models.
  • Risk of decreasing competitive advantage.

This application helps you with the following tasks:

  • Get faster and keep your competitive edge.
  • Digitize the processes that you, as a project manager, need to deal with.
  • Get an overview of the project's key data.
  • Have all notes and relevant information on tasks that need your attention at your fingertip.
  • Reach your team members easily, boosting project-related communication.
  • Increase productivity and decrease the time unplanned distractions can waste.

Data Integration Overview

The following components are required to integrate SAP S/4HANA Cloud with SAP Project Companion:

  • SAP S/4HANA Cloud for Professional Services: Data is regularly transferred from your SAP S/4HANA Cloud system to the SAP Project Companion application, including information regarding projects, work packages, staffed employees, and other characteristics.
  • SAP Business Technology Platform consumer account: An SAP Business Technology Platform account is required to use the application services.
  • SAP Business Technology Platform mobile service subscription: A subscription to SAP Business Technology Platform mobile services is required to send notifications from the mobile apps.
  • SAP Cloud Identity: SAP Cloud Identity is required to ensure users of the SAP S/4HANA Cloud system are successfully authenticated when using SAP S/4HANA Cloud applications and integrated services.
  • SAP SuccessFactors Employee Central: SAP SuccessFactors Employee Central is the recommended HR system for SAP S/4HANA Cloud. Employee Central is natively integrated to ensure successful user data replication. Employee information created and maintained in Employee Central that is relevant to customer or internal projects can be integrated into the SAP Project Companion application.

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