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
Five

Project Management Process Groups (not

necessarily phases)
Initiating
Planning
Executing
Monitoring
Closing

and Controlling

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
Cost Management

Quality 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
The

best 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
Customers and/or users
Performing organization
Project team members
Sponsor
Influencers
PMO

Organizational Cultures and

styles
Organizational systems
Organizational structure
Functional
Matrix
Projectized
Project manufacturing

PMBOK Guide project

Management Integration

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 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 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 projects 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 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 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 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 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 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 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

Present
State

Unfreezing

Resisting Forces

Transition
State

Changing

Desired
State
Refreezing

Summary of Project Closing Outputs

Knowledge area

Closing process

Outputs

Project integration
management

Close project or phase

Final product, service, or

result transition
Organizational process
assets updates

Project procurement
management

Close procurements

Closed procurements
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
Accounting

Sales &
Distribution
Materials
Mgmt.

Controlling

R/3

Production
Planning

Human
Resources
Quality
Maintenance

Fixed Assets
Mgmt.

Integrated Solution
Client / Server
Open Systems

Plant
Management

Project
System
Workflow

Industry
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