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Sheetal Deshmukh
May 9, 2008 | 7 minute read

SAP Project System – A ready

Reference ( Part 1 )

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Being a beginner in SAP PS is a challenge. As a techie, When I started my ABAP

 Like Program in PS Module, I found a lot of scattered information but there is no
article or blog with consolidated information even on basic terminologies of SAP
PS. This blog is my attempt to provide an insight of basic techno-functional
 RSS Feed aspects and terminologies of SAP PS to a novice. 

In my first blog you will find the important terms of the PS module. I have tried to
explain them with the help of an example. Following this is the next blog SAP
Project System – A ready Reference ( Part 2 ) where the technicalities of the
same are covered.

The Project System (PS) module of SAP is specifically designed to provide

comprehensive and fully integrated project management functionality for SAP
customers. A Project is a complex undertaking, bringing with it huge data of
different type.

At the beginning of each project, whether it involves developing a new product,

make-to-order engineering or internal organization, you need to define and set up
the structures necessary to manage your project and incorporate them into your
existing organizations and processes. Before you can run a project in its entirety,
you must first describe the project goals precisely and create a structure for the
project activities to be carried out. A clear project structure provides a basis for
successful project planning, monitoring and control.

Organizational Structures in Project System:

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”
 
You create and manage your project structure in SAP R/3 Project System, by
means of work breakdown structures and networks.The WBS describes individual
phases and functions of a project. Network contains the individual project tasks
and the dependencies between them in the form of activities and relationships 

Some important terms:

 

Project Definition
Project Definition is general description of the project that you want to manage. It
is a framework laid down for all the objects created within a project. It contains
organizational data that is binding for the entire project. 

Work Breakdown Structure (WBS)

WBS is a hierarchical model of the tasks to be performed in the project. It
provides overview of the project and forms basis for the project organization and
coordination.It shows work, time and money spent on the project. You can use it
to plan dates & costs and allocate budget. The Work Breakdown Structure can be
displayed according to:

Phase
Function
Object

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Individual tasks required to carry out the project is called WBS elements.

Network
The network describes project processing. Thus the Network contains
instructions on how to carry out activities in a specific way, in a specific order and
in a specific time period.Main elements of network are activities and
relationships. It forms the basis for planning, analyzing and monitoring time
schedules, costs, & resources.

Activities
Activities are used to plan project staffing, capacity, material, PRTs, and service
requirements. When activities are assigned to WBS elements, detailed view of
costs, dates, and capacities at WBS element could be obtained. It’s a task in a
network which has a defined start and finish. An activity can be broken down into
activity elements.Three categories of activities in the Project System:·        

Internal Activities        

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External Activities        
General Cost Activities 

Activity element
Activity element is an activity which is subordinate to another activity. Activity
elements contain the same information as activities.Three categories of activity
elements in the Project System:

Work elements
External Elements
General Cost Elements 

Activity Type
It’s a physical measure of activity output of a cost center .e.g. hours, number of
units produced, machine times, production times. 

Milestones
Milestones are the events in the project to which particular importance is
attached Or which trigger predefined functions. In general they indicate
transition between different departments or phases. Milestones are assigned to
activities and WBS elements:In PS milestones are used to:

Trigger predefined functions in network activities.

Carry out earned value analysis.
Determine dates in billing plan for sales orders. 

Relationships
You use relationships to depict chronological and technical dependencies
between activities. The relationship determines the nature of the link between the
individual activities. :

FS Relationship : An activity does not start until the preceding activity is

completed.
SS Relationship  : An activity can not start unless another activity has started.
FF Relationship  : An activity can not be completed until another activity has
been completed.
SF Relationship : An activity can not be completed until another succeeding
activity has stared. 

Confirmations
It is a part of network control. It documents the state of processing for the
network activities and activity elements. There are two types of confirmations
Partial & Final.Confirmations are used to record:

The work center where the activity was carried out.

The person who carried out this activity.
The yield and scrap produced in an activity.

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The actual values for the duration and dates. 

Settlement
As a rule, projects are used to collect and monitor costs, but are not usually the
final cost object. For this reason the costs in atypical project will be settled at the
end of the period.To this end, you store settlement rules in the activity / WBS
element requiring settlement. They contain information on settlement receivers,
cost apportionment and control data. Settlement receivers could be cost centers,
G/L accounts. Etc.

Budget
The budget is the approved cost structure for an action or project in a particular
period.Budgeting differs from cost plan in that it is binding. In the approval phase
you prescribe your project funds in the form of budget. It is possible to allocate
overall and annual budget in parallel.

Work Centers
Work center represents the resources responsible for executing an activity. In a
work center, you can enter the available capacity and an operating time. You can
arrange the work centers in a hierarchy for capacity evaluation purposes. 
Internal activities are assigned to work centers (resources) to be completed.A
work center is a physical unit within a company where an activity is performed.

Profit Center
It is subdivision of business organization which is set up for internal management
control purposes. Profit centers divide business up on a management basis. The
basic aim of profit center accounting is to present areas of the business as
entities operating independently in the market.   

Lots of jargons ….let me site an instance of the construction project  of a

building.. 

Let say there is a construction company that is going to construct a Multi-Storey

building. 

The first thing that needs to be created in the system is Project Definition. The
entire activity plan for this project will come under this project definition. Overall
budget needs to be estimated, assigned and get approved for the project. Project
timeline needs to be decided.  Project could be then subdivided into separate
parts which are actually WBS elements lets say in this e.g. we have 4 main WBS
elements:

1. Land Acquisition
2. Procurement                    
3. Construction
4. General

To every above WBS, budget and time line need to estimated. 

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Now to take an example we will drill down two WBS elements namely Land
Acquisition and Construction.

– Land Acquisition could be sub divided into activities as in 

Generation of request document for the land.

Soil testing
Approval for construction
Preparation of purchase order of the land

Above 4 activities should be done in sequence. As in second activity will start only
after request document for the land is completed and so on. Hence these
activities have FS Relationship between them. 

– Now take WBS element Construction.

It could be sub divided in to floor wise tasks. Let say, we have four story building
and each floor has 4 flats. So under WBS element ‘Construction’ we may create
separate sub WBS element for each floor. Each sub WBS element of floor may be
divided further into last level of WBS elements one for each flat on the floor. This
way we will have hierarchy of the WBS elements.Finally last level of WBS
elements i.e. WBS elements of the flats will have activities like

1. Plumbing
2. Electrical work
3. Flooring
4. Painting
5. Furniture

These activities form the Network.

Let say Plumbing and Electricity work are the external activities as they are given
to a outside contractor. While the other activities are done by company labor so
they are internal activities. Plumbing and Electrical work could be started
simultaneously.While flooring needs be done once the plumbing and Electrical
work is complete. Hence they have FS relationship and so on…. Now if we talk
about milestones:

1. First milestone could be purchasing the land

2. Second could construct the base of the building.
3. Third could be construct the floors
4. Fourth could be completion of plumbing and electrical work for all the flats.
And so on….

As I have said that Work center represents the resources responsible for
executing an activity For the above activities, work centers could be the company
labor required for the construction, labor provided by the external service center
for plumbing and Electricity work. while Profit Centers could be the finally
constructed flats. 

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Sr Project Elements Examples

NO
1 Project Def Constructing the Buiding
2 WBS
Generation of request document for the
land
Soil testing
Approval for construction         
Preparation of purchase order of the land 

3 Activities (Under 
Plumbing( external Activities)
3rd WBS)
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Electricity work( external Activities)

Flooring (internal activities)
Painting (internal activities)
Furniture

4 Relationship Flooring needs be done after the plumbing

and Electricity work. Hence they have FS
relationship
5 Milestones
First milestone could be purchasing the
land
Second could construct the base of the
building.T
hird could be construct the floors
Fourth could be completion of plumbing
and electricity work for all the flats

6 Network Plumbing and Electricity installation are to

be one contractor each. Therefore, there
exist a network within on the activities of it
under different WBSs.

( Referencee : The book : Functions in Detail : R/3 System – Project  

Management in Engineering & Construction )

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sheetal deshmukh

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29 Comments

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Aditya Varrier
May 11, 2008 at 7:33 pm

Hi Sheetal,
a good blog to understand the terminologies in PS.
Waiting for Part 2.

Great work.

Regards,
Aditya

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Former Member
May 11, 2008 at 8:08 pm

Sheetak the Blog is really nice n very useful.

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Former Member
May 11, 2008 at 8:11 pm

Sheetal very good Blog.

and indeed it is very useful.

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Arpil Gupta
May 11, 2008 at 9:08 pm

Nice and concise information on PS. Gr8.

Regards
Arpil

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Former Member
May 11, 2008 at 10:05 pm

Very well written for the consolidated information on SAP PS.

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Former Member
May 12, 2008 at 3:52 am

A good one . Will really help beginners to understand the concepts of SAP PS.

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Former Member
May 13, 2008 at 5:57 pm

https://blogs.sap.com/2008/05/09/sap-project-system-a-ready-reference-part-1/ 10/17
4/4/23, 4:00 PM SAP Project System – A ready Reference ( Part 1 ) | SAP Blogs

Hi

Good job.
Both the parts are very much descriptive and can be used as reference for techies.
Starting point for beginners.
Thanks.

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Former Member
May 19, 2008 at 11:58 pm

Hi Sheetal,
          This is a very useful blog for all the techis...Very simple language and a lot of useful content...
Keep it up.

Thanks
Nayan

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VS G
June 12, 2008 at 7:55 am

hi sheetal i am working on a report in PS and need to pull the last posting date with amount spend on the
project.... where can i those.... thank you.

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Amaresh Makal
January 5, 2009 at 9:15 pm

Sheetal,
Wonderful job. Any beginner can understand the concept, terminology, and whole picture of PS.

Amaresh

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Former Member
February 4, 2009 at 4:55 am

Hi Sheetal,

Very helpful blog!

I am very new to PS, and as per our requirement, i need to send a mail to completion of one step. So i need
to link a workflow to the PS.

Can you help me on this?

Thanks,
Runal

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Former Member
June 27, 2010 at 10:24 pm

Its Very easy to understand the basic flow of the PS module

Good attempt

Regards
Kiran

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Former Member
July 2, 2010 at 5:50 pm

Hello Sheetal

Very nicely presented the Project system

Muthu

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Former Member
August 23, 2010 at 3:17 am

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4/4/23, 4:00 PM SAP Project System – A ready Reference ( Part 1 ) | SAP Blogs

Hi shital,

its very gr8 documentation for PS freash consultant.Hope if you have more documentation ,you will
forwards to sdn forum.

Regards,

Mahesh Amale

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Former Member
August 10, 2011 at 9:11 pm

The documents created are excellent and very useful to any PS module user.

Can you throw some ligt on how to import network activites from excel sheet. Similarily can i
import Confirmation from a excel sheet.

Regards
SCSharma
GM_Manufactuing systems (using SAP)

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Former Member
June 15, 2012 at 8:53 am

Hi Sheetal,

You have a done a great job!!!

Regards,

Pranav

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Former Member
June 25, 2012 at 10:36 am

Nice Material.......Thanks sheetal

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Former Member
June 26, 2012 at 5:02 pm

Hi Sheetal'

         

             Thank you for giving such a valuable information for easy understanding of PS basics.

        Regards'

       srikanth.

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Sheetal Deshmukh | Blog Post Author

June 29, 2012 at 10:33 am

Thanks all for appreciating my work !

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Former Member
July 3, 2012 at 6:29 am

Its really a great thing.Such an effort to make the jargons and business flow comprehensible is really
commendable!!

Thanks and Regards

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Former Member
July 31, 2012 at 9:52 am

Nice Stuff for a beginner.

Great job!

Thanks & Regards

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Nandha

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Former Member
December 27, 2012 at 10:42 am

Hi Sheetal,

Nice blog , Its very good for a beginner irrespective of Techincal or fuctional.

Thanks a lot.

Continue the same great Work 🙂

Thanks and regards,

Shekhar

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Former Member
July 31, 2013 at 6:08 am

Hello...

Thanks for this usefull blog..really i don't have any idea about PS but after i read this got a basic idea,  the
explanation give with the relation of construction excellent and easy to understand..

Like 0 | Share

Muhammad Shoaib Tasleem

February 23, 2016 at 6:43 am

Hi,

Extremely good blog. Specially for beginners in PS. Looking forward for more like this.

Like 0 | Share

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Manuel Robalinho
May 20, 2016 at 1:20 pm

Excelent.

Very good work.

Like 0 | Share

Former Member
March 16, 2017 at 10:55 pm

This is good information, it made my life easier when trying to explain other people with no PS experience.

Thank you!

Like 0 | Share

Rohan Koul
March 26, 2018 at 11:22 am

Thanks for the explanation. It was really helpful for me.

The example used is clear and easy to understand.

Great work

Like 0 | Share

Anjikumar Pasumarthy
February 13, 2019 at 8:05 pm

Great work

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abhilash reddy
April 26, 2022 at 3:42 am

really great blog , please keep posting the other module which you have worked on .

thank you .

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