SAP Engineering and Construction Projects with Noveco ePM

Industries

  • Commercial Projects with customer billing (lump-sum, cost-plus or schedule of rate)
  • Home Building
  • Infrastructure Design and Build
  • Engineering Procurement and Construction Management (EPCM)

Key challenges in managing engineering and construction projects

Any construction project has many integration points and one of the biggest challenges facing project managers is the ability to access the most current project information in one integrated view. Successful project management is also dependent upon the ability to accurately estimate and control costs throughout the project lifecycle, to schedule effectively and to efficiently manage internal resources and sub-contractors.

Increasingly, leading companies are implementing complex SAP ERP solutions to manage these challenges, and to enhance their capabilities in the following project management areas:

  • Preparation of accurate cost estimation and integration with project structure, planning and budgeting
  • Clear visibility and timely control of project costs, revenues and cash position
  • Forecasting of project costs, resources and revenues
  • Measure and report project progress, earned value and productivity
  • Efficient project variations and customer escalations management and seamless integration with project cost forecasting and project revenue planning
  • Integration of subcontractors into project execution, monitoring of work performed and incorporation into project progress reporting
  • Accurate customer billing
  • Project KPI monitoring and reporting

The art of management in engineering and construction projects is the ability to coordinate:

1. Project Planning and Estimating
  • Ability to perform cost estimation across various stages of the project lifecycle (from tender estimate to final control estimate)
  • Break-up project into packages and sub-packages, estimate costs on package level and issue tender out to external sub-contractors
  • Allocate detailed budget on labour, materials, services to project packages, sub-packages and tasks
  • Create schedule of work and coordinate it with sub-contractors
  • Define long-lead time equipment for advanced procurement
  • … and much more
2. Sub-Contractors management and Project Forecasting
  • Ability to have a complete visibility on project purchasing commitments, actual costs collected through purchase orders, time sheets, direct invoices  etc.
  • Forecast cash flow to make sure projects stay cash positive at all times
  • Accurately manage project cost to complete and at any time be able to generate project forecast cost and forecast profit at completion
3. Project Variations and Issue Management
  • Keep track of project variations, budget transfers and adjustments between work-packages with complete audit trail history
  • Estimate costs and revenue of budget variations and seamlessly integrate them into project revenue plan, budget and forecasts
  • Ability to manage project contingencies and report them separately from variations affecting project budget
4. Reporting and analysis
  • Report on project financial KPIs: cash, budget, forecast at completion, open orders, forecast profit margin etc.
  • Project financial history snapshot and analysis: budget, forecasts at completion, revenue and profit changes over time

Here are two typical project structures often used in construction projects

Option 1: Full project structure: WBS and Network Activities

WBS Elements

  • Represent: project organizational structure (e.g. Project Types, Phases, Packages)
  • Used for overall: project budget control and progress reporting on a high level

Network Activities

  • Represent: project tasks that define work or activity to performed on the site (e.g. fitting, testing)
  • Used for detailed: dates scheduling, costs planning, forecasting, progress reporting, procurement of materials, services and time allocation

Option 2: Project structure that consists of the WBS elements only

WBS Elements

  • Represent: project organizational structure (e.g. Project Types, Phases, Package and Sub-package)
  • Used for detailed: project budget control, dates scheduling, costs planning and forecasting, progress reporting, procurement of materials, services and time allocation

SAP solution enhanced by Noveco ePM for engineering and construction projects

SAP ERP, Project System enhanced by Noveco provides the complete integrated set of solutions to manage every aspect of your Engineering and Construction project in SAP seamlessly and effectively.

What Noveco does that SAP standard does not

Noveco solution allows you to be completely flexible
  • You can plan costs and services on WBS or Network Activities
  • You can define packages and sub-packages where you like to plan and forecast costs and revenue, report progress
  • Detailed work planning, execution and confirmation is done though work orders assigned to project WBS or Network Activities
  • Forecasting remaining work and costs to complete are performed on WBS or Network Activities taking actual costs posted directly to WBS or Network Activities
Noveco ePM Project Manager Workbench and Project Manager Portal provide instant visibility into your Capital Projects enabling you to analyze and forecast directly in SAP ERP

The ePM Workbench is a one stop-shop for Project Managers to view and maintain critical elements of a project life cycle:

 

  • Report on Key Performance Indicators: Cash in and out, Budgets, Cost to Complete, Variations, Actual Costs and Revenues, Forecast Total Costs, Cost To Complete and Sales Remaining
  • Automatic recalculation and distribution of Cost To Complete
  • Cost and Profit Forecasts
  • Purchasing Commitments
  • Variations and Issues Register and report
  • Contingency Management in complete integration with variations, budgets and forecasts
  • Context Drill-down reports: point and click to get into underlying documents directly from ERP
  • Built-in reports and analysis
  • Automatic Project Forecast history tracking
Lets you perform Cost Forecasting

Our ePM Workbench enables automatic recalculation of your project forecast cost to complete and estimated costs at completion based on actual costs and purchasing commitments posted to your project by planning period

 

  • Automatic forecasting based on overspend saves Project Manager time as he/she does not need to do this manually
  • Perform manual forecasting of Cost to Complete on WBS, Network Activities or PM/SC orders by Cost Elements or network operation work quantity;
  • Perform cost forecasting by value or quantity multiplied by labour rates
  • Instant Integration of forecast results with Project Results Analysis
Integrated Variation and Issues Management
  • Plan Costs and Revenues within one variation document
  • Assign variation costs to multiple project elements (WBS, Network Activities and orders) within one variation document
  • Variation status control, e.g. Pending, Approved with automatic cost allocation to assigned Project elements (WBS, Network Activities): update project current budget and Cost To Complete depending on variation status
  • Sales Document update with revenue adjustment from variation document
  • Full Integration with Project cost forecasting and reporting
Reporting
  • Full history of project Estimated at Completion, Cost to Complete, Commitments, Actual costs, Budget, Variation of costs and revenue values. See how your project was evolving during its lifecycle
  • Report Project Variations and Budget changes
  • Report Original Project Estimation vs. Project Actual Costs at its completion

Interested in learning more?