Chapter 1

Introduction
SAP is setting new standards for universal standard software with its R/3
System. Developed with client/server technology, the R/3 System fully inte-
grates business applications and data processing.

The individual components in the R/3 System are distinguished by the most
modern technology and their comprehensive functionality. The complete
integration of individual applications ensures uniform handling for all busi-
ness processes and all departments in your company.

Figure 1-1: The Integrated Applications in the R/3 System

To manage projects successfully, you must carefully plan your objectives,

efficiently execute your plan, and control your resources.

The integrated Project System (PS) supports your decision-making processes

and optimizes your business processes when you carry out a project. In this
system work and data flows are sped up and routine tasks are reduced.

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1 Introduction

Overview of the Project System

The scope of your objectives and the intensity with which you pursue them
is directly related to the type of project. While costs always play an impor-
tant role, in some projects, deadlines may be even more important.

You can use the Project System for many different kinds of projects, for
example:

‰research and development

‰engineer-to-order manufacturing

‰investment programs

‰maintenance projects

‰information technology

The R/3 Project System is an industry-neutral, complete solution for all tasks
in a project. As a fully integrated component of the R/3 System, it works in
harmony with the other components such as accounting, sales and distri-
bution, materials management and production planning and supports you
through all project phases.

Structure The primary structures in the Project System are the work breakdown
structure (WBS) and the network. You are free to set up these structures any
way you like for your projects. For particularly complex projects you can use
both work breakdown structures and networks conjointly. Manufacturing
projects will most likely focus on schedules and resources, therefore it makes
sense to use networks and activities.

However, you can still create a project strictly to track costs by using just the
work breakdown structure.

In the Project System you can manage revenues, costs and finances in three
currencies at the same time.

Project Life Cycle

General and You can expand or detail your project plan at any time. If you have done
Detailed Planning some general cost planning based on the work breakdown structure, you can
expand this planning or turn it into cost element planning or unit costing.
The Project System recalculates dates for you and also determines the critical
activities.

You can plan dates in the work breakdown structure and add detail to net-
work activities - all on a single screen. The R/3 project planning board has
both a table and a graphic area so that you can easily enter detailed data and
still keep an overview of the entire project.

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 Introduction 1

Take advantage of the integration within R/3 and coordinate your resources
with the purchasing department, the MRP group and inventory manage-
ment. In the network you can plan the people, capacities, materials, oper-
ating resources, and services you need to carry out the project. The Project
System uses this data to create purchase requisitions and material reser-
vations automatically.

Figure 1-2: The Project Planning Board

The Project System automatically monitors the materials, capacities, and Approval and Execution
funds necessary to carry out the project.

Budget management monitors approved and released project budgets.

When you enter funds commitments and assign them to projects, the system
checks whether the required funds are available. Overruns of the available
budget by a purchase order trigger a message in the system that is automati-
cally sent to the project manager.

Capacity planning monitors capacity requirements. You are informed of

schedule delays, bottlenecks, or overloads so that you can take action
immediately in a graphical capacity planning table.

Workflow improves communication in a large project. With workflow, you

can still inform your purchasing department immediately and automatically
of changes to quantities or dates of materials, for example.

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1 Introduction

Material availability check allows you to see whether required materials are
there when you need them. You can check material availability when your
customer places an order.

Figure 1-3: The Individual Phases of a Project in the Project System

Actual values from accounting, purchasing, inventory, and production are

written directly to the project. The values in postings, purchase orders,
material movements, production orders, or plant maintenance orders can be
assigned not only to the WBS element but also the network activities.

Project Closing Revenues from sales orders are automatically written from the sales and
distribution (SD) system to the project.

Results analysis makes it possible for you to compare realized revenues

with accrued costs up to a specified date. The system can automatically write
the results analysis results into profitability analysis. At the same time, the
system can also create the appropriate balance sheet postings (work in
process, bad debt provisions etc.) in accounting.

You can customize your R/3 System so that in settlement, actual costs
incurred are settled either in whole or in part to one or more receivers, such
as cost centers, fixed assets, or an object in the financial statement.

Project Analysis The information system provides you with all the information you need
during the life of a project, for example: reports, graphical analyses for
budgets, costs, revenues, commitments, earned value, schedules, and
resources.

Open interfaces enable you to maintain texts in Microsoft WinWord,

perform spreadsheet calculations in Microsoft Excel, or manage your
project in both the Project System and Microsoft Project, or even make
decentralized confirmations of actual data.

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 Introduction 1

The R/3 Project System

The R/3 Project System as it is delivered to you will meet all of the demands
of project management because of its extensive functionality. The experi-
ences and ideas of project management software users in different industries
played an important role in the development of the R/3 Project System. The
Project System is versatile and well suited for international use because of its
multiple language and currency capability.

Everyone can easily use the R/3 Project System without specialized know-
ledge - the user-friendly graphical user interface makes it possible. The logi-
cal design of the software quickly puts you at ease with the system.

Customizing
The standard Project System has comprehensive functionality to meet your
needs. Customizing is just one of the tools to help you. Without any pro-
gramming, you can configure the Project System to fit your specific corpo-
rate environment.

To facilitate the implementation process, SAP has created an online guide for Implementation Guide
all components containing the information you need to set up the Project
System. The implementation guide walks you through each step of the
process, so you become acquainted with standard settings and technical
recommendations.

Customizing not only facilitates the implementation and configuration of the

R/3 System, it supports upgrades and the installation of new releases.

R/3 Business Navigator

Another tool to aid you in the implementation process is the R/3 Information R/3 Information Model
model. This model describes the interrelationships and processes within
business areas. With this tool, the entire world of integrated software opens
up: you can analyze processes more easily and judge how the R/3 System
will fit in your organizational structure. The information model gives you an
excellent overview of the capabilities of the Project System.

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1 Introduction

R/3 Business Navigator In the Business Navigator, you can view reference models from two different
views, the component view and the process flow view. The component view
describes the static structure and functionality of the Project System. SAP has
created different process flow views to help you visualize how your business
processes can be represented with the Project System.

What are the advantages of the R/3 Project System?

‰ Integration
The Project System is an integrated component of the R/3 System with
all of the functionality of accounting, sales and distribution, materials
management, plant maintenance and production planning.

‰ Functionality
The Project System supports you with extensive functionality for all
phases of your project.

‰ User-friendliness
The modern graphical user interface enables you to master the
comprehensive functionality in the Project System quickly and easily.

‰ Multilingual
The Project System is designed to be used by multinational companies
and is available in many languages.

‰ Multi-currency
With the Project System, you can manage several currencies at the same
time.

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