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
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
• 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 Integration
Management
4.1
4.2
4.3
4.4
4.5
4.6
Develop
Project
Charter
Develop
Project
Manageme
nt Plan
Direct and
Manage
Project
Execution
Monitor
and
Control
Project
Work
Perform
Integrated
Change
Control
Close
Project or
Phase
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
Requirements
Define
Scope
Create WBS
Verify Scope
Control 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
Activities
Sequence
Activities
Estimate
Activity
Resources
Estimate
Activity
Durations
Develop
Schedule
Control
Schedule
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
Costs
Determine
Budget
Control Costs
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
Quality
Assurance
Perform
Quality
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
Human
Resource
Plan
Acquire
Project
Team
Develop
Project
Team
Manage
Project
Team
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
Stakeholder
s
Plan
Communicatio
ns
Distribute
Informatio
n
Manage
Stakeholder
Expectation
s
Report
Performanc
e
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
Manageme
nt
Identify
Risks
Perform
Qualitative
Risk
Analysis
Perform
Quantitativ
e Risk
Analysis
Plan Risk
Response
Monitor
and Control
Risks
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
Procuremen
ts
Conduct
Procurement
s
Administer
Procuremen
ts
Close
Procuremen
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
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