SAP Project Systems for Engineering and Construction Projects

Key Challenges

Engineering and construction projects are very complex by their nature. There are many integrated processes that need to be efficiently coordinated all at once. One of the biggest challenges that project managers are facing is the ability to access the most current information in one integrated environment and to manage it efficiently. Delivering projects on time, on budget and profitable is the main challenge for project managers.

Successful Project Management Depends On The Ability To:

Accurately estimate costs based on the experience of delivering similar projects
Forecast costs, revenue and cash throughout the project lifecycle
Effectively schedule project tasks
Efficiently manage internal resources and sub-contractors
Manage project changes and estimate analyse projects risks (threats and opportunities)
Manage procurement of materials, equipment and services

Company management requires instant access to reliable and consistent project financial information. This information must provide the most up-to-date project KPIs across the entire project portfolio: including past performance, current status and future forecasts.

Managing engineering and construction projects requires the ability to coordinate:

Estimating and project planning includes:

Performing cost estimation across various stages of the project lifecycle (from tender estimate to final control estimate)
Breaking up projects into packages and sub-packages, estimate costs on package level and issue tender out to external sub-contractors
Allocating detailed budget on labour, materials, services to project packages, sub-packages and tasks
Creating schedule of work and coordinating it with sub-contractors
Defining long-lead time equipment for advanced procurement

Sub-contractor and procurement management includes:

Creating procurement plan in accordance with project estimates and its schedule
Completing visibility over project purchasing commitments
Handling contract change, delivery and invoicing schedule
Purchase Accruals management

Project forecasting includes:

Calculating project Cost To Complete and Estimated At Completion
Having accurate CTC and EAC, forecast revenue and profits
Calculating cash flow to make sure projects stay cash positive at all times
Assessing project progress, actual spend, schedule variances and earned values

Project variations management includes:

Keeping track of project variations, budget transfers and adjustments between work-packages with complete audit trail history
Estimating costs and revenue of budget variations and seamlessly integrating them into project revenue plan, budget and forecasts
Estimating and assessing project threats and opportunities and simulating them in project reporting
Ability to manage project contingencies and report them separately from variations affecting project budget

Reporting and analysis includes:

Reporting on project financial KPIs (e.g. cash, budget, forecast at completion, open orders, forecast profit margin etc.)
Project financial history snapshot and analysis including budget, forecasts at completion, revenue and profit changes over time
Reports available on instant request providing the most up-to-date real-time information

Project Scheduling

Schedule project tasks to determine start & finish dates.

Compare original schedule with the current delivery time of key project milestones. The accurate schedule will become a basis for progress calculation and earned value analysis.

Noveco provides solutions for engineering and construction projects

Many organisations even today manage and report on their projects using Excel spreadsheets or various isolated and non-integrated software applications.

SAP Project System enhanced with Noveco provides an integrated set of industry-specific solutions designed to manage every aspect of your engineering and construction project seamlessly and effectively.

SAP PS with Noveco addresses all above mentioned requirements directly in SAP: no need for third-party non-SAP solutions and most importantly no Excel spread sheets.

What Noveco does that SAP standard does not

Noveco simplifies SAP PS while enhancing functionality. Additional functionality includes:

Cost and Revenue Estimation

Quickly and easily create estimates directly in SAP by copying estimating templates or previously created estimates
Create as many estimate versions as needed to simulate different scenarios
Use flexible formulas to calculate price escalation, surcharges, risks, contingencies and profit margins
Maintain estimating structures different from project structures
Transfer estimated costs and revenues to project structure by drag & drop. This way you can automatically create project costs and revenue plans in SAP PS without typing it manually
Compare Estimated Costs vs Project Forecasts and Actuals at any time during project lifecycle

Project Forecasting

With Noveco Project Manager Workbench you can:

Review Project KPIs in a graphical dashboard
Automatically calculate project Cost To Complete (CTC) and Estimated At Completion (EAC) based on actual costs and purchasing commitments posted to your project
- Automatic recalculation can be run for multiple projects overnight as a background job saving project managers time of doing it manually in excel sheets
Manually adjust CTC and EAC directly in SAP using Project Manager Workbench
Distribute costs and revenues by period
Single point-and-click to drill down to source documents assigned to your project: e.g. purchase orders, goods and invoice receipts, time sheets etc.
Instantly integrate project EAC with project Results Analysis for accurate Profit Recognition
Forecast project Cash In and Out based on open PO Commitments, uncommitted Costs and Revenue plan
Automatic project forecast history tracking
Instant and immediate integration with SAP without any interfaces

Integrated Variation and Risk 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
Control status of variations (e.g. Pending, Approved) with automatic cost allocation to assigned project elements (WBS, Network Activities). Project current budget and cost to complete are updated depending on variation status
Sales document update with revenue adjustment from variation document
Contingency management in complete integration with variations, budgets and forecasts
Full Integration with project cost forecasting and reporting
Create Risks Threats and Opportunities with probabilities and their expected values to simulate various scenarios on impact on project KPIs

Noveco’s Project Manager Portal and Reporting

Provide instant visibility into your engineering and construction projects, enabling you to analyse, forecast and report directly in SAP without need for Excel spreadsheets.

Graphical KPIs with configurable layout
Report on all project financial information including Progress and Earned Values past, current and future
Various reporting layouts provided: Graphical View with dynamic navigation, List View, Period View
Download to Excel or use Excel in place view option
Full history of project KPIs: Budget, Forecast Cost At Completion , revenue values etc. See how your project(s) have evolved during their lifecycle
Drill down to the source documents
Always the most up-to-date real-time data directly from SAP

Project Scheduling with Gantt Chart

Project Schedule using relationships and duration set in network activities.

Noveco Gantt Chart provides the following key functionalities:

Graphical representation of project WBS, Networks, activities, relationships, milestones, maintenance and production orders
Reschedule maintenance and production orders by changing dates of related project WBS or network activities
Schedule project sections by drag & drop
Drag & drop or stretch network activities to reschedule all related project elements automatically
Schedule only part of the project by simply selecting project element and clicking “Schedule” button. The system uses concept top-down and left to write scheduling leaving top elements not affected.
See Plan and Actual POC on project chart instantly
Actual duration, Earliest and Latest dates
Set Date Constrains and fixed intervals between activities
Automatically re-distribute project costs and work demand
Complete and seamless integration with project dates in SAP PS