Introducing Customer Project Management for Professional Services

Objectives

After completing this lesson, you will be able to:

  • Outline Customer Project Management

Overview

Note

The content of this Unit corresponds to scope item J11.

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).

Key Process Steps

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.

Benefits

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.

Additional Information

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.

Project Roles and Responsibilities

Project Roles

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.

Core Roles

Project ManagerResource ManagerEmployeePurchaserBilling ClerkAccountant
  • Creates project planning
  • Creates financial planning
  • Monitors projects
  • Assigns suitable resource/consultant to the resource request (project roles)
  • Overview of projects and resource utilization
  • Executes the assignments/projects
  • Records times and expenses

Creates purchase orders for external and 3rd party resources.

Creates billing documents.

  • Reviews multiple reports
  • Performs revenue recognition corrections
Note

The Resource Manager role might not be required as resources may be assigned within the project by the Project Manager using the scope item J11. Centralized staffing by a Resource Manager can be done with the scope item 6JO Resource Management for Projects for the integration with the SAP Business Technology Platform (SAP BTP) application SAP S/4HANA Cloud for projects, resource management.

Project Structure and Stages

Main SAP Fiori Applications

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.

Project Services Stages

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

Project StageActivities
In planning
  • General planning of the project scope
  • Definition of work packages
  • First idea of necessary project roles and staffing of (contingent) workers
  • First idea of expenses
  • Collection of all relevant information
Contract preparation
  • Billing tab has been added
  • Assign work packages to billing items with contract types
  • Define billing plan
In execution
  • Confirmation of staffing
  • Perform time recordings
  • Approve and release billing items
CompletedThis stage indicates that work has been completed and delivered but financial settlements (customer/vendor invoices) are still pending. Users will no longer be able to record their times, but the following tasks will still be possible: 
  • Process invoices
  • Post expenses
  • Transfer costs to accounting 
ClosedWhen a project is closed, financial postings are no longer possible.

The figure depicts the possible sequence of stages in Professional Services.

Project Structure

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.

Note
The Service Based (Unit) work packages can only be billed as "usage based".

The following figure shows a sample project structure.

Project Service Expense Types

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
Note
Additional expense types can be maintained in the system in SSCUI 101306 – Define Expenses.

Project Services Contract Types

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

Contract TypeExample
Fixed PriceWork package: Blueprint
Time and ExpensesWork package: Realization; Testing
Periodic ServicesWork package: Maintenance
Usage Based BillingWork package: Licenses

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