asug webcast-best practices for year-end closing with sap's project portfolio management (ppm)...

FIND YOUR EDGE

Americas' SAP Users' Group

Kent Bettisworth, ASUG PME SIG Chair, BETTISWORTH & ASSOCIATESTom Martin, PPM Solution Architect, ProPPM CorporationDecember 18, 201311AM Eastern/10AM Central/9AM Mountain/8AM Pacific

Best Practices forYear-end Closingwith SAP’sProject PortfolioManagement(PPM and/or IM)and ProjectSystems (PS)

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Webcast Notes

This webcast is being recorded

The recording and slides will be posted to the ASUGwebsite

Hosted in Discussions in the workspace for host community Link can also be found on the Event Page All participants will be emailed the link to the recording and slides

Use the for questions throughout the webcast

Panelists will answer questions in this forum We’ll take questions from here at the end of the presentation

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Managing projects and portfolios is much easierwhen you successfully ‘close’ the prior year in SAP

Walk with us through the best practices required fora proper and successful year-end close

Compare Investment Management (IM) to ProjectPortfolio Management (PPM) year-end budgetingprocesses

Learn to avoid the mistakes that break next year’sbudget reporting

This session will challenge what you know aboutyear-end closing in the Portfolio and Project modules

Introduction

Learn the best practices for a successful year-end‘close’ for portfolios and projects

Comprehend Portfolio and Project Management and(PPM) Investment Management (IM) differences

Avoid year-end mistakes that break next year’sbudget reporting

Audience: Technical and Business

Level : Intermediate

Learning Points

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Portfolio and Project Lifecycle Processes

PPM and IM differences

Portfolio Item versus Appropriation Request Financial Views versus Plan Versions / Budget Custom PPM & IM Integration

Year-end close best practices

Strategic portfolio planning Annual portfolio planning/budgeting Project planning/budgeting

Mistakes to avoid

Summary

Let’s Discuss …

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Project Portfolio Management (PPM) Overview

Strategic PortfolioManagement

Lack of portfoliovisibility

AFE Approval

Where are the PainPoints?

Tactical

Gated ProjectManagement

Cost Planning

ResourceManagement

Collaboration

Tool for gatedapproval

Time to Market

Resource optimization

FunctionalTimesheetand ActualCosts

AFEApproval

Detailed ActivityManagement

Project cost

Task Management

Compliance

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Portfolio and Project Lifecyle Processes

Planning: RolesSchedule, Budget

Resource Leveling

ResourceAllocation

CapitalAccountant

PlanningManager

ProgramManagers

Capex Portfolio Review

AFE Analysis& Prioritization

FinancialController

AFE Approval,Initiation

AFE Budgeting,Reconciliation

TeamMembers

Proposals: Projects,Initiatives

Charter: Definition,Evaluation

Time Allocation

Review WorkConfirmChargebacks

Assign Tasks

FacilitiesManagement

Strategic Planning

Financial Planning

Manage Costs

WorkSubmission

ResourceAnalysis

CorporateBudgeting

BudgetSupplements

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Intelligence Across the Lifecycle

PortfolioOptimization

Tools

Project ExecutionDecision-making

PortfolioAnalytics Suite

ActualValues Settlement MaintenancePlanning and Budgeting

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Mistakes to avoid

Summary

Let’s Discuss …

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When to Use SAP PPM (in relation to IM)

Where IM is deeply embedded, used by accounting:

Objective: Compliment IM, Integrate, Improve AOP Process Benefits: Long/medium term planning, web user interface,

portfolio optimization via scoring models, questionnaires

Where IM is used lightly:

Objective: Introduce core processes like closed-loop AOP,portfolio optimization, top-down integration to PS, CO

Benefits: Major effectiveness gains via portfolio optimization

Where IM is not in use:

Objective: Introduce life-cycle AOP in SAP Benefits: Effectiveness (20% improvement in ROCI), Efficiency

gains (eliminated manual steps, integration)

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PPM versus IM - Structures

Structures

IM Uses Appropriation Requests for planning futureprojects

High-level, annual based

Limited Decision-making capability (financial only)

Auto Convert to PS Project

PPM Uses Portfolio Items

Customizable according to client

Can roll-up values from Items or be entered asstandalone

Plan Value Transfer to PS at the Portfolio Item

Auto-create PS Project

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Budgeting

IM Uses Original, Current Budgets for Overall and Annual

Supplements and Returns to change values

Budget Distribution to PS module project budgets

Annualized

PPM Uses Financial Views


Can roll-up values from Items or be entered asstandalone

Budget Transfer to Project Systems at the Portfolio Item

Monthly, Quarterly, Annual Periods

PPM versus IM - Budgets

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Planning

IM Uses Cost Plan Versions for Overall and Annual Planning

Similar to other modules cost planning functionality (PS,CO)

Can copy Plan to Budget to Plan

Annualized

PPM Uses Financial Views (same as Budget)


Can roll-up values from Items or be entered as standalone

Plan Value Transfer to Project Systems at the Portfolio Item

Monthly, Quarterly, Annual Periods

PPM versus IM - Planning

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IM versus PPM versus Custom Integration

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Mistakes to avoid

Summary

Let’s Discuss …

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New year budget reflects management’s top-downdirection (for next year and future years)

Program funding structures and allocations are up-to-date

Top-down and bottom-up gap is measurable

Portfolio wish list is refreshed and plans and status current New projects approved and funded, if 1st quarter start Active project plans, budgets, and status are up-to-date Project commitment delivery dates are up-to-date

Advance Commitments funded for Future Years

Future years are budgeted and funded

Depreciation forecast is current

Projects are closed and placed in-service Forecast in-service date updated for on-going and new projects

A Successful Year-end Close is…

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AnnualBusinessPlanning

ProjectSelection

ClosingProjectCreation

ProjectExecution

Month-EndProcessing

StrategicPlanning

Long-term strategicplanning is entered intoPortfolio Items

Best Practice 1 - Strategic Planning

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Portfolio Structure versus IM Structure

PPM and IM both use hierarchical structures

IM = one structure PPM = unlimited structures (one primary and many

classifications)

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AnnualBusinessPlanning

ProjectSelection

ClosingProjectCreation

ProjectExecution

Month-EndProcessing

StrategicPlanning

‘Top-Down’ Planning can beentered annually, quarterly

‘Bottom-Up’ Planning isaggregated from portfolioitem level into buckets bymonthly period

Best Practice 2 - Annual Planning

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Step 1 - Plan Costs in PPM Portfolio Item

Plan Costsin Portfolio

Items

Roll-upProjectPlanned

Costs

TransferPlanned

Costs to IM

Set Budgetin IM

TransferBudget to

IM

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Step 2 - Roll-up Project Planned Costs


Items


Costs

TransferPlanned

Costs to IM

Set Budgetin IM

TransferBudget to

IM

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Best Practice 3 - PPM and IM Plan Integration

Real-time integration ofplanning and budgeting databetween PPM and IM

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Step 3 – Transfer Planned Costs to IM


Items


Costs

Set Budgetin IM

TransferBudget to

IM

TransferPlanned

Costs to IM

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Best Practice 4 – PPM/IM Financial Integration

PPM Financial Categories, Groups and Views offerpowerful visibility of global capital budget vs spend

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Step 4 and 5 – Set IM Budget, Transfer to PPM


Items


Costs

TransferPlanned

Costs to IM

Set Budgetin IM

TransferBudget to

PPM

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Best Practice 5 – Distribute Budget to Projects

Budget distribution to projects istriggered by Portfolio Itemstatus

IM52 distribution is performedautomatically in the background

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Mistakes to avoid

Summary

Let’s Discuss …

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Avoid These Mistakes

Portfolio Structures Aligned?

Projects Reassigned?

Projects Missing Assignment?

Portfolio Plan Rollup Incorrect?

Budget Returned and ProjectsClosed?

Advance Commitments Funded?

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PPM ~ IM Integration – Structure Aligned?

The challenge when deploying an SAP Portfolio Managementsolution is to maintain the PPM and IM structures synchronously

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Reorganization ofportfolio results inreassigned projects

Reassign in CURRENTyear & BEFORE newapproval year iscreated

Cannot transferbetween programs

See OSS 192815 toreassign carry-forwardprojects

Reassign Projects (IM05)? PPM option?

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IMR8 - Find Missing Assignments?

Planning andbudgeting isincomplete ifprojects, ordersor appropriationrequests areunassigned

Update or deleteunassignedobjects

PPM option?

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Step Timing Object Step DescriptionSAP

Transaction

1Before eachRollup-IM27

Projects and/orOrders

Copy actual to plan for closedmonths

CJ9C or KO15



Update project plansUpdate commitment dates

CJ40 or KO12ME22



Adjust project budgets CJ3x, KO2x


Projects Fund & Release 1st Qtr newyear advance commitments

IM52, CJ32



Update depreciationsimulation data

CJ20N orKO02



Settle projectsClose projects

CJ8x, KO8xCJ20N ,KO04


AppropriationRequests

Refresh and plan 'wish' list IMA11, IMA12

PPM Rollup incorrect – Missed Project Step?

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Unreturned or Not Carried-Forward Project Budget?

Mistake Problem Solution

Failure to timely cancel orclose projects and returnbudget funds (CJ3x or KO2x).

Budget funds are notavailable for allocation toother projects and/orprojected budgets aredistorted.

Return unused budgets andclose projects not later than thelast IM27_REPEAT in fourthquarter.

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Make certain thefinancial year isclosed

Repeat one lasttime

Previous carry-forward isdisplayed

Carry-forward the Budget (CJCO or KOCO)

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Projects Not Closed Timely?


Failure to timely closeprojects (CJ20N or KO04).

Depreciation, bothfinancial and tax, isinaccurate.

Improve close-out processes.Maintain frequent reviews ofprojects beyond projectedcompletion date.

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Carry Forward Carry Forward

Program X - 2013 Program X – 2013 / 2014 Program X - 2014

Measures Measures Measures

Complete or Abandoned Complete orAbandoned

New Projects& Wish list

New Projects &Wish list

Fiscal Year Change


Future year advancecommitments funded withcurrent year budget.

Current year availablefunds are reducedunnecessarily . POdelivery dates are wrong.Inefficient budget returns &supplements in 4th quarter.

Fund two years instead ofone. Fund advancecommitments in currentyear + 1 year.

Project Advance Commitments correctly funded?

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Item Problem Solution

Update past due delivery dates.(CJCF or KOCF)

Available funds are over-stated.

Run transaction CJCF and/or KOCFto move past due commitments tothe first period of new year.

Before

After

Carry-forward commitments CJCF or KOCF)

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Mistakes to avoid

Summary

Let’s Discuss …

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Key Learnings

Use PPM for robust, full-featured portfoliomanagement

Use IM for the financial system of record for projects

A critical item…Proposals (wish list) must besubmitted and updated timely

Follow the best practices for closing the year …toensure a successful new year

Avoid the most common portfolio year-end mistakes

Fund next year advance commitments in year + 1

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FIND YOUR EDGE

Americas' SAP Users' Group

Thank you for attending this ASUG Webcast

[email protected]@bettisworthassociates.com

QUESTIONS

and

ANSWERS

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asug webcast-best practices for year-end closing with sap's project portfolio management (ppm)...

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