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Hi Readers,

I would like to share some of the lessons learnt while implementing SAP Commercial Project Management module for Engineering & Construction industry customers. This blogpost includes some basic information about the product while the focus is more on the key lessons learnt.

Business Background

EC&O industry comprises of business segments like building & housing ,Infrastructure ,Power transmission and other construction projects

Service formats include EPC, General contracting ,Conventional contracting ,BOOT/PPP Concessions

Major process steps involved are :

  • Project Estimation (Costs / Resources /Quantities)

  • Project Creation

  • Project Scheduling

  • Project Cost planning

  • Project Budgeting

  • Project Progress monitoring & control

  • Project Reporting

Business Pain Areas

  • Lack of clarity on project resources , estimation & actual progress

  • Non availability of single source of truth for project progress ,costs ,actuals & KPIs

  • Integrating physical project progress with financial progress

  • KPI driven management reporting missing in current landscape

  • Integrating project issues & change requests with overall project progress

  • Financial planning in terms of resources ,costs ,revenues ,budgets & material quantities

High Level Process Flow - Solution Design

Solution Scope (SAP CPM)

Three pillars of CPM are as below :

  • Project Workspace

  • Integrated cost & revenue planning with commercial project life-cycle

  • Project Issue & Change Management with integrated financial planning

Additional installations for CPM

  • NWBC

  • SAP Analysis Office for planning workbooks

Lessons Learnt


  • Forecasting happens in CPM and CO version 0 is independently updated from the schedule

  • Forecasting is based on productivity (Manual /Automated)

  • New cost forecast is calculated (adjust ETC based on productivity)or based on current approved budget (adjust ETC and keep current approved budget the same)

  • Forecasting is done on need basis with monthly distribution of resources

  • Cost forecast is transferred to CO as part of month end closing & system calculates the new ETC based on actuals

  • Output based planning workbooks needs to be customized taking into account productivity norms & formulae for enabling streamline calculations

  • Service master can be integrated with workbooks through a minor development / customization (Writing a custom implementation class & linking to a new resource type say ZSERV i.e. service resource type)

Project Financial Planning (PFP)

  • Output based planning (monthly) workbooks can be used as a base & business specific workbooks can be developed using BWIP efforts

  • In this planning, Statistical Key Figures (SKF) are used to define output Quantity for a structure element and Input resource type and Resources are planned to achieve the planned output Qty.

  • SKF’s are used to calculate the percentage of completion based on plan and actual postings. For example, to Paint a Wall of 20 Square meter, one can define an SKF and the required materials and labor as required resources to achieve this output quantity. Actuals can then be posted on SKF and resources to track the progress of quantities based on consumption of resources.

  • For some resource types like Labor, Equipment ; productivity (Output Qty/ Input Qty) drives quantities. If a labor paints 10 sq.meters wall in 8 hrs, then productivity of the labor would 10 M2/8 Hr = 1.25M2/Hr. Similarly, one can also calculate other productivity related key figures like Productivity Factor, Earned Qty

  • Material & Service planning can be done by building custom workbooks. Rate card editor functionality of CPM can be utilized

  • PICM can be integrated with PFP so as to capture cost changes logged in the change request in the revised financial plan

  • Financial plan versions can be easily created within PFP

Project Workspace

  • Project progress can be monitored using Project overview workspace view

  • SD & MM integration with CPM can be appreciated by exploring Commercial & procurement views in workspace

  • Project risks & opportunities can be monitored in Risk Management view

  • Document collaboration can be found in document overview.

  • Project teams can be configured in Teams Overview

  • Use of extensive embedded analytics is one of the most promising feature of CPM

Project Issues & Change Management

  • Change is always initiated as Change request in CPM

  • User can make any changes in estimation tool for changes that require detailed estimate

  • Updated changes gets transferred to scheduling system with CR number to assess impact on dates & schedule

  • Entire budget is updated and transferred to CPM (Current budget) which get transferred to CO using CPM transfer strategies

  • CR outputs are captured in CPM (pdfs) and necessary approvals can be configured

With new innovations & additions in SAP Commercial project management as a product, customers across the globe are adopting it in their core business activities.