project budgeting for engineering and construction sap best practices for engineering, construction,...

Project Budgeting for Engineering and Construction

SAP Best Practices for Engineering, Construction, and Operations (India)

SAP Best Practices

© SAP 2010 /

Scenario Overview – 1

Purpose The project estimate, calculated when preparing the quote to the client, is

essential to create the preliminary project budget and major timelines. It has now to be embedded into the project structure, having in mind the need of connecting the client needs with the construction view.

Estimates are typically performed in a third-party solution or spreadsheets. The preliminary budget provides the cost view and equally quantifies the scope

of work (physical output or production) and the necessary resources to be consumed in performing such production.

Benefits The preliminary budget structure can be built mirroring the originating external

estimate, which makes it easier for planning engineers to achieve the task of connecting the client world to the construction world in a first step.

Estimators and engineers work together, resulting in teamwork delivering a reconcilable, reliable preliminary budget.

Purpose and Benefits:

© SAP 2010 /

Scenario Overview – 2

Enhancement Package 4 for SAP ERP 6.0

Project manager Project Manager ECO

Create and assign a cost version to be used as the preliminary budget (version E01)

Import or re-key an external estimate master data into a project cost version Deploy the items from the estimate within the project structure (WBS and

network), for resources (material, labor, equipment, lump sum items) for each line item with their respective unit costs

Company Roles Involved in Process Flows:

SAP Applications Required:

Key Process Flows Covered:

© SAP 2010 /

Scenario Overview – 3i

Business context A contractor who executes construction services, typically employing its own labour and

equipment. It is qualified as a self performing construction firm; it can provide construction services to

project owners and/or general contractors. These contractors can usually be found rendering construction services to general

contractors. Bids are published or forwarded to contractors. Bids usually come with comprehensive

description of the target service, supported by complementary technical documents, such as specifications and drawings.

Contractors offer service packages, whereas each service item can embed labour, material and construction equipment.

Therefore, contractors can perform procurement of construction material and equipment for the project on behalf of their hiring companies. Certain services can also be procured based on specific needs.

Detailed Process Description:

© SAP 2010 /

Scenario Overview – 3ii

Project Budgeting for Engineering and Construction Contractors typically receive soliciting bids in the form of RFQs. Engineers interpret the owner

requirements and translate it into amounts of physical output or production in quantities (Cubic yard of concrete for example). Estimators deploy engineer’s assessment of necessary resources, mostly comprised of labour, material and equipment. Estimators assign costs according to the estimation model. These steps are typically performed in external systems or spreadsheets.

The resulting estimate of the previous steps is deployed into the project structure, which in turn makes up the preliminary budget.

This preliminary budget is saved in the cost version E01 using the Easy Cost Planning in Project System.

A planning engineer provides a first take in assessing the feasibility of the required delivery date, by assigning dates to the most relevant WBS elements.

An assessment on this preliminary budget is provided from a standard PS reporting.

Detailed Process Description:

Process Flow Diagram

Project Budgeting for Engineering and Construction

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Estimate is ready

Preliminary Budget using Easy Cost

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Preliminary Planned Dates

Project Setup for Engineering and

Construction (439)

© SAP 2010 /

Legend

Symbol Description Usage Comments

Band: Identifies a user role, such as Accounts Payable Clerk or Sales Representative. This band can also identify an organization unit or group, rather than a specific role.

The other process flow symbols in this table go into these rows. You have as many rows as required to cover all of the roles in the scenario.

Role band contains tasks common to that role.

External Events: Contains events that start or end the scenario, or influence the course of events in the scenario.

Flow line (solid): Line indicates the normal sequence of steps and direction of flow in the scenario.Flow line (dashed): Line indicates flow to infrequently-used or conditional tasks in a scenario. Line can also lead to documents involved in the process flow.

Connects two tasks in a scenario process or a non-step event

Business Activity / Event: Identifies an action that either leads into or out of the scenario, or an outside Process that happens during the scenario

Does not correspond to a task step in the document

Unit Process: Identifies a task that is covered in a step-by-step manner in the scenario

Corresponds to a task step in the document

Process Reference: If the scenario references another scenario in total, put the scenario number and name here.


Sub-Process Reference: If the scenario references another scenario in part, put the scenario number, name, and the step numbers from that scenario here


Process Decision: Identifies a decision / branching point, signifying a choice to be made by the end user. Lines represent different choices emerging from different parts of the diamond.

Does not usually correspond to a task step in the document; Reflects a choice to be made after step execution

Symbol Description Usage Comments

To next / From last Diagram: Leads to the next / previous page of the Diagram

Flow chart continues on the next / previous page

Hardcopy / Document: Identifies a printed document, report, or form

Does not correspond to a task step in a document; instead, it is used to reflect a document generated by a task step; this shape does not have any outgoing flow lines

Financial Actuals: Indicates a financial posting document


Budget Planning: Indicates a budget planning document


Manual Process: Covers a task that is manually done

Does not generally correspond to a task step in a document; instead, it is used to reflect a task that is manually performed, such as unloading a truck in the warehouse, which affects the process flow.

Existing Version / Data: This block covers data that feeds in from an external process

Does not generally correspond to a task step in a document; instead, this shape reflects data coming from an external source; this step does not have any incoming flow lines

System Pass / Fail Decision: This block covers an automatic decision made by the software

Does not generally correspond to a task step in the document; instead it is used to reflect an automatic decision by the system that is made after a step has been executed.

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Unit Process

Process Reference

Sub-Process

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Diagram Connection

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Financial Actuals

Budget Planning

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System Pass/F

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