POP: Capital Project Management

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POP - Packaged Solution for SAP-EPC

Capital Project Management with SAP and Primavera

 

CEI's Process Optimization Package (POP) for Capital Project Management using SAP-EPC reflects over a decade of experience with major capital investment projects at large enterprises using SAP as their ERP application. This POP defines an integrated solution from the owner's perspective, meaning that high-level project management activities are performed in the SAP-PS (Project System) module of SAP, integrated with the back-end ERP, and more detailed scheduling and execution activities may mostly or solely be managed by Primavera. By assuming that budgeting, procurement and asset management activities are performed in SAP ERP, the PS module becomes key to the effective management of the project.

 

Characteristics

Using SAP-EPC for SAP-Primavera integration, capital projects can be managed with SAP PS and Primavera in two ways:
(A) Single-level in that all project structures and associated planning details are duplicated in SAP and Primavera on a 1:1 basis; and
(B) Multi-level in that high-level planning and the master schedule are performed in SAP PS, aligned with Primavera and there then broken out in more details.

  • High-level budgeting and planning are done in SAP.
    A cost breakdown structure (CBS) is created in SAP. The financial plan, approvals, and release of money to be spent ("budgeting" in SAP terminology) are performed in SAP, integrated with related financial accounting and controlling transactions.
  • A Master Schedule structure (WBS and Activities) is established in SAP.
    For construction activities, SAP-EPC will establish a high-level WBS, and associated high-level activities.
  • Additional activities and WBS elements may be created in Primavera.
    If more detailed and low-level activities are created in Primavera, they will not be replicated through EPC. Their dates, resource assignments, hours, and progress will be summarized to the Master Schedule level.
  • The Master Schedule may be broken out into multiple sub-projects in Primavera.
    Based on a trigger in SAP ERP, EPC may split the master schedule into sub-projects in Primavera. This means that detailed schedules may be separately managed by various contractors or departments.
  • Material procurement activities are performed in SAP.
    Materials will be procured through SAP's MM purchasing and MRP modules. The procurement of most materials will not be relevant for schedules, but long-lead items may well be. Materials relevant for scheduling will be transferred to Primavera, other activities will not
  • External services are procured in SAP, but involve Primavera.
    External services (contractors) will be procured through SAP's MM purchasing module. The reporting of actual hours in Primavera needs to be aligned with SAP.
  • Scope changes will be performed in SAP first, then broken down in Primavera.
    Changes to the original scope are considered extensions of the planning effort, therefore to be performed in SAP through the adding or changing of PS WBS elements and activities, and then transferred to Primavera.
  • Earned value-type reporting is important to evaluate project progress.
    Cost may be transferred to Primavera, or date and progress information may be transferred back to SAP so that EVA can be performed in the respective receiving application.
  • Primavera owns the schedule - dates and progress.
    Primavera plays a key role in managing the schedule and related calculation of start times of activities. The calculated dates are fed back to SAP.
  • Progress is to be updated weekly from Primavera.
    Progress information from Primavera will need to be updated into SAP, while service entry hours or time reported in SAP will be sent to Primavera for general reference.
  • High-level resource assignments are defined in SAP, low-level resource assignments (individuals) are done in Primavera.
    Trade resources are defined as work centers in SAP PS, and detailed resources as Human Resources records in the SAP HR module. The work centers are brought into the Primavera resource library from SAP, while the pulling of HR records is optional.

 

Benefits

This SAP-Primavera solution using SAP Enterprise Project Connection (SAP-EPC) delivers the following benefits:

  • Clear division of ownership of functional tasks, through the project life cycle.
  • Alignment of project structures and master data on a high level, and optionally on a detailed level also. This lays the foundation for consistent and valuable cross-application reporting - up to PPM.
  • Contractors can work with Primavera, while procurement, finance and maintenance people work mainly in SAP.
  • High-performance data alignment across applications.
  • Contractors and owners can work in the environment that suits them best (contractors in Primavera, and owners in SAP).

 

Challenges

This SAP-Primavera solution using SAP Enterprise Project Connection (SAP-EPC) will address the following challenges:

  • External contractors may play a crucial role, working widely independent, even with their own project management applications.
  • Processes relating to the assignment of individual resources, and their reporting of time, need to be aligned between SAP and Primavera.
  • Earned value-type reporting (cost-based or hour-based) plays an important role during the project. It needs to be determined whether earned value is calculated in SAP or in Primavera.
  • Since detailed schedules often are contractually and practically the responsibility of third parties or groups working only with Primavera, there will be a differentiation (between master schedule and detailed schedules. This also requires logic to summarize and report on cost, hours, and progress.
  • Materials play a larger role than in the outage world, and schedule changes affect working capital and the delivery date of materials. However, the focus needs to be on relevant materials instead of trying to mimic procurement-level details of the rest.

 

Optional Functionality

The following are some of the optional functionality that can be added to the standard SAP-EPC template, using CEI's EPC Plus Enhancements as part of this EPC POP for Capital Project Management:

  • Status changes triggered from either application
  • Triggering of new activities from Primavera
  • Breaking of the master project into separate detailed projects
  • Integration of maintenance components into the capital project
  • Performance optimization using Transfer Manager
  • Transfer of relationships from SAP