Project Management using

SAP Project System (PS)

ESI 6455 Advanced Engineering Project Management

(Professional MSEM)
Spring, 2012
Introduction and learning
outcomes
This Project Management/SAP Project System (PS)
supports a project/product life cycle, typical in an
Engineer-to-Order, Project Centric business and/or
organizations facing frequent new products
introduction.
The application exercises are designed to demonstrate
and apply Project Management concepts and
processes using SAP PS as the enabling technology.

PS integrates SAP PS, SAP SD, SAP CO, SAP MM and

SAP HR in a large projects context.

PMBOK and PMI are registered marks of the Project Management Institute, Inc.
PS Introduction: What Is a Project ?

Project Defined
A complex, non-routine, one-time effort limited by time, budget,
resources, and performance specifications designed to meet
customer needs.

Major Characteristics of a Project

Has an established objective.
Has a defined life span with a beginning and an end.
Typically requires across-the-organizational participation.
Involves doing something never been done before.
Has specific time, cost, and performance requirements.
Project Management Body of Knowledge
PMBOK® Guide identifies generally recognized
Project Management “Good practices”
◦ Correct application of “Good practices” can enhance the
chances of success over a wide range of different projects

Project Life Cycle Definition

Project Management Life Cycle
 Five Project Management Process Groups

Nine Knowledge Areas

Project Management Body of Knowledge
Project Life Cycle Definition
Project can be divided into phases to provide better
management control with appropriate links to the ongoing
operations of the performing organizations
Completion and approval of one or more deliverables
(Scope definition) characterizes a project phase
Some deliverables can correspond to project management
process groups (Initiating, Planning, Executing,
Monitoring and Controlling, Closing), others are the end
products or components of end products for which the
project was conceived.
Project Management Life Cycle in the PMBOK® Guide

FiveProject Management Process Groups (not

necessarily phases)

◦ Initiating
◦ Planning
◦ Executing
◦ Monitoring
and Controlling
◦ Closing
Knowledge areas in PMBOK® Guide
There are 42 project management processes
organized into 9 knowledge areas
The Knowledge Areas are:

• Integration
Management
• Scope Management
• Time Management • Quality Management
• Cost Management • Human Resources Management
• Communications Management
• Risk Management
• Procurement Management
PMBOK® Guide Knowledge Areas
and SAP PS mapping
◦ Charter & Scope Management
◦ Project structures, WBS, Activities and
Networks
◦ Cost and Revenue Planning
◦ Budget

◦ Time Management
◦ Customizing Activities and Networks
◦ Date Planning
PMBOK® Guide Knowledge Areas
and SAP PS mapping
◦ Cost Management
◦ Cost and Revenue Planning
◦ Budget
◦ Progress Analysis Workbench

◦ Quality Management
◦ Resource Planning
◦ Material Planning
◦ Assigning Documents, Procurement
Processes, and Claim Management
PMBOK® Guide Knowledge Areas
and SAP PS mapping
–Procurement Management
–Material Planning
–Assigning Documents, Procurement
Processes

–Integration Management
–Estimation and development of complete
Project Plan
–Customizing Activities and Networks
–Progress Analysis Workbench
Project Success
There are different ways to define project
success:

◦ The project met scope (understood technical

functionality), time, and cost goals.
◦ The project satisfied the customer/sponsor.
◦ The project produced the desired results
(expected technical functionality).
Typical Project Constraints
Description of Process Groups
 Initiating processes include actions to begin
projects and project phases
 Planning processes include devising and
maintaining a workable scheme to ensure that
the project meets its scope, time, and cost goals
as well as organizational needs
 Executing processes include coordinating
people and other resources to carry out the
project plans and produce the deliverables of the
project or phase.
◦ A deliverable is a product or service produced or
provided as part of a project
Description of Process Groups
Monitoring and controlling processes
measure progress toward achieving
project goals, monitor deviation from
plans, and take corrective action to match
progress with plans and customer
expectations
Closing processes include formalizing
acceptance of the project or phase and
bringing it to an orderly end
Guidelines for Time Spent in Each
Process Group
 Thebest or “alpha” project managers spend
more time on every process group than their
counterparts except for execution, as follows:
◦ Initiating: 2% vs. 1%
◦ Planning: 21% vs. 11%
◦ Executing: 69% vs. 82%
◦ Controlling: 5% vs. 4%
◦ Closing: 3% vs. 2%*

*Andy Crowe, Alpha Project Managers: What the Top 2% Know

That Everyone Else Does Not, Velociteach Press(2006).
PMBOK® Guide Framework
Stakeholders and Influencers
• Project Stakeholders • Organizational Influences
– Project Manager – Organizational Cultures and
– Customers and/or users styles
– Performing organization – Organizational systems
– Project team members – Organizational structure
– Sponsor • Functional
– Influencers • Matrix
– PMO • “Projectized”
• Project manufacturing
PMBOK® Guide project
Management Integration

Project Integration
Management
4.1 4.2 4.3 4.4 4.5 4.6
Develop Develop Direct and Monitor Perform Close
Project Project Manage and Integrated Project or
Charter Manageme Project Control Change Phase
nt Plan Execution Project Control
Work

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 4-1, Page 73.
Initiating Process Summary

Senior management work together to: Project managers lead efforts to:
Determine scope, time, and cost constraints Identify and understand project stakeholders
Identify the project sponsor Create the project charter
Select the project manager Hold a kick-off meeting
Develop a business case for the project
Review processes/expectations
Determine if the project should be divided into two or more smaller
projects
Inputs to develop Project Charter
Charter should explicitly state “what” the
project is about: Features and functions
that characterize a product, service or
result.

◦ Product or Service description

◦ Strategic plan
◦ Statement of work
◦ Enterprise environmental factors
◦ Organizational process assets
Project Charter contents
• Project Overview
• Project Objectives
• Requirements
• Business Justification
– Strategic
– Other
• Preliminary Resources Allocation
• High-level time and cost estimates
• Roles and Responsibilities
• Sign-off
• Attachments
Project Charter within SAP PS
Use Project Builder to create the
following:
◦ Project Overview
◦ Project Objectives
◦ Preliminary Resources Allocation
◦ High-level time and cost estimates (Root
time and cost estimates)
◦ Roles and Responsibilities
◦ Attachments
Project Builder
PMBOK® Guide Project Scope
Management

Project Scope
Management
5.1 5.2 5.3 5.4 5.5
Collect Define Create WBS Verify Scope Control Scope
Requirements Scope

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 5-1, Page 104.
Creating the Work Breakdown
Structure
A work breakdown structure (WBS) is
a deliverable-oriented grouping of the
work involved in a project that defines the
total scope of the project
The WBS is a document that breaks all
the work required for the project into
discrete tasks, and groups those tasks
into a logical hierarchy
Hierarchical Breakdown of the WBS
Work Packages
A Work Package is the Lowest Level of the WBS

◦ It is output-oriented in that it:

 Defines work (what)
 Identifies time to complete a work package (how long)
 Identifies a time-phased budget to complete a work
package (cost)
 Identifies resources needed to complete a work
package (how much)
 Identifies a single person responsible for units of work
(who)
WBS Dictionary
 Description of WBS work packages that includes:
◦ Statement of Work
◦ Responsible organization
◦ Schedules milestones
◦ Quality requirements
◦ Contract information
◦ Technical references
◦ Resource requirements
◦ Estimated cost
PMBOK® Guide Project Time
Management

Project Time
Management Overview
6.1 6.2 6.3 6.4 6.5 6.6
Define Sequence Estimate Estimate Develop Control
Activities Activities Activity Activity Schedule Schedule
Resources Durations

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 6-1, Page 131.
Project Time Management Planning
Tasks
 Project Time Management occurs within SAP PS
in two levels, at the WBS Element, and at the
Network activities
 In some projects the work components are
handled by others, or outsourced. In those
situations, a project may be comprised of only
WBS elements. Those elements can have time
components attached to them.
 If components within the WBS element will be
carried out and monitored by the organization,
then Networks and Activates are created for
closer monitoring.
Project Time Management Planning
Tasks
 Project
time management involves the
processes required to ensure timely
completion of a project

 The main planning tasks performed include

defining activities, sequencing activities,
estimating activity resource, estimating
activity durations, and developing the
project schedule

 The main documents produced are an

activity list and attributes, a milestone list, a
network diagram, the activity resource
requirements, the activity duration
estimates, and a project schedule
The Project Network
A flow chart that graphically depicts the
sequence, interdependencies, and start and
finish times of the project tasks/activities
◦ Provides the basis for scheduling labor and equipment
◦ Provides an estimate of the project’s duration
◦ Provides a basis for budgeting cash flow
◦ Highlights activities that are “critical” and should not be delayed
◦ Help managers get and stay on plan
Creating a Milestone List
• A milestone is a significant event in a project
• It often takes several activities and a lot of work to
complete a milestone, but the milestone itself is like a
marker to help identify necessary activities
• Project sponsors and senior managers often focus on major
milestones when reviewing projects
• Sample milestones for many projects include:
– Sign-off of key documents
– Completion of specific deliverables
– Completion of important process-related work, such as
awarding a contract to a supplier
Milestones in PS
In SAP PS milestones do all of the
previous and they are also used for:
◦ Reporting purposes such trend and progress
analysis
◦ Milestone billing
◦ Activity milestones
Sequencing Activities
• Sequencing activities involves reviewing the activity list and
attributes, project scope statement, and milestone list to
determine the relationships or dependencies between activities
• A dependency or relationship relates to the sequencing of
project activities or tasks
– For example, does a certain activity have to be finished before
another one can start?
– Can the project team do several activities in parallel?
– Can some overlap?

• Sequencing activities has a significant impact on developing

and managing a project schedule
Reasons for Creating Dependencies
• Mandatory dependencies are inherent in the nature of the work being
performed on a project
– You cannot hold training classes until the training materials are ready

• Discretionary dependencies are defined by the project team

– A project team might follow good practice and not start detailed design work
until key stakeholders sign off on all of the analysis work

• External dependencies involve relationships between project and non-

project activities
– The installation of new software might depend on delivery of new hardware from
an external supplier. Even though the delivery of the new hardware might not
be in the scope of the project, it should have an external dependency added to it
because late delivery will affect the project schedule
Further defining Activities/Tasks
• Task Sequencing and Predecessors

• Establishing durations
– Expert judgment
– Parametric estimating

• Establishing dependencies
– Finish to Start
– Finish to Finish
– Start to Start
– Start to Finish
Dependency Types
Constructing a Project Network
Terminology

◦ Path: a sequence of connected, dependent

activities.
◦ Critical path: the longest path through the
activity network that allows for the completion
of all project-related activities; the shortest
expected time in which the entire project can
be completed. Delays on the critical path will
delay completion of the entire project.
PMBOK® Guide Project Cost
Overview

Project Cost
Management Overview

7.1 7.2 7.3

Estimate Determine Control Costs
Costs Budget

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 7-1, Page 167.
PMBOK® Guide Project Cost
Overview

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 7-1, Page 167.
PMBOK® Guide Project Cost
Overview

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 7-1, Page 167.
PMBOK® Guide Project Quality
Management Overview

Project Quality
Management Overview

8.1 8.2 8.3

Plan Quality Perform Perform
Quality Quality
Assurance Control

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 8-1, Page 191.
PMBOK® Guide Project Human
Resource Management Overview

Project Human Resource

Management Overview

9.1 9.2 9.3 9.4

Develop Acquire Develop Manage
Human Project Project Project
Resource Team Team Team
Plan

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 9-1, Page 217.
PMBOK® Guide Project Communications
Management Overview

Project Communications
Management Overview

10.1 10.2 10.3 10.4 10.5

Identity Plan Distribute Manage Report
Stakeholder Communicatio Informatio Stakeholder Performanc
s ns n Expectation e
s

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 10-1, Page 244.
PMBOK® Guide Project Risk
Management Overview

Project Risk
Management Overview
11.1 11.2 11.3 11.4 11.5 11.6
Plan Risk Identify Perform Perform Plan Risk Monitor
Manageme Risks Qualitative Quantitativ Response and Control
nt Risk e Risk Risks
Analysis Analysis

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 11-1, Page 274.
PMBOK® Guide Project Procurement
Management Overview

Project Procurement
Management Overview
12.1 12.2 12.3 12.4
Plan Conduct Administer Close
Procuremen Procurement Procuremen Procuremen
ts s ts ts

Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) – Fourth Edition, Project Management
Institute, Inc., 2008, Figure 12-1, Page 314.
Change is a Process

Driving Forces Resisting Forces

Present Transition
State State Desired
State

Unfreezing Changing Refreezing

Summary of Project Closing Outputs
Knowledge area Closing process Outputs

Project integration Close project or phase Final product, service, or

management result transition
Organizational process
assets updates

Project procurement Close procurements Closed procurements

management Organizational process
assets updates
The Quadruple Constraint
Project Management Tools and
Techniques
 Project management tools and techniques assist
project managers and their teams in various
aspects of project management.
 Note that a tool or technique is more than just a
software package.
 Specific tools and techniques include:
◦ Project charters, scope statements, and WBS
(scope deliverables)
◦ Gantt charts, network diagrams, critical path
analyses (time)
◦ Net present value, cost estimates, and earned value
management (cost)
Common Project Management Tools
and Techniques by Knowledge Areas

Schwalbe, Information Technology Project Management, Sixth Edition, 2010

Common Project Management Tools
and Techniques by Knowledge Areas

Schwalbe, Information Technology Project Management, Sixth Edition, 2010

SAP Project System (PS) Overview

SAP Navigation
SAP ERP Module Structures
 SAP Module
View
Financial
Sales &
Accounting
Distribution
Materials Controlling
Mgmt.

R/3
Production Fixed Assets
Planning Mgmt.

Human Integrated Solution

Project
Resources Client / Server System
Quality Open Systems
Maintenance Workflow
Plant Industry
Management Solutions
SAP Access Navigation
SAP PS Client, Userid, Password
SAP R/3 Exercises
Client: 100
Application server: madrid.cob.csuchico.edu
System number: 82
System ID: MDR

Userid: ps-001 to ps-040

Initial password: SUBWAY10
Exercises:
Project management I
• Work breakdown structure
• Activities and network
• PS texts & Release of project
• Reporting using cost element report
• Structure information system
• Project planning board
• Project execution/ Actual data

Project management II
• Customer inquiry
• Sales project
• Reporting using cost element report
• Bid calculation/quotation
• Incoming order
• Reporting using the structure information system
• Revenue planning using