Introducing Customer Project Management for Professional Services

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

You will 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 will include 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 will be introduced to crucial components of the project management framework, such as the project structure, service expense types, and contract types. You will 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 will provide 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 should be able to effectively navigate the SAP S/4HANA Cloud customer project management landscape and maximize its functionalities to ensure optimal project performance.

Learn how to effectively manage customer projects in SAP S/4HANA Cloud with the next video.

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 price of the Activity Type/Materials, in order 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 this 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 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 easily 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 Customer Project Management is tightly bound by other scope items, which provides a foundation for forming a complete solution for Project Management. The work package and billing structure is a two-level SAP Project System (PS) structure. The resulting sales order is part of the SAP Sales and Distribution (SD) module. The frame around both is based on the SAP Commercial Project Management (CPM) add-on, which builds a container to collect all information and data, according to the project.

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 shows 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 app Plan Customer Projects. 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 possible sequence of stages in Professional Services.

The project structure is derived from the project stage it is in. The project structure is a three-level structure where the project consists of work packages (Time or Unit based) and each work package has work items assigned within them. During the initial stage, In Planning, the basic three level project structure is established.

Work packages can be of two possible types:

Resource Based (Time): Costing and pricing for these work packages are based on the hours of the various roles needed to complete it, as well as expenses and other additional resources (materials for example).

Service Based (Unit): These work packages are assigned a "service unit" of measure and the quantity of that unit that will be delivered. Costing of these work packages is based on the resources (roles and hours, expenses and additional resources) needed to deliver the units of service, and pricing is determined by the unit price assigned to each service unit.

When the project stage is moved to the Contract Preparation stage, billing items are defined for the relevant billing types for the project (time and material, fixed price, periodic service, usage based) a single Sales Order is created directly on the project header and one Sales Order Item is created for each billing item. One or multiple work packages are then assigned to each billing item, defining how they will be billed.

The following figure shows a sample project structure.

The Project Manager can enter the expenses which will 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: