Primavera – SAP Integration: Why should we need it and what for me??
I have been getting lots of queries from the various Project Management champs, on my previous post “How to Integrate Primavera with SAP”
Many of Project experts eager to know the reason why companies require integration between Primavera-SAP and what will be the value added by implementing this solution.
In this post, we will discuss the “Business Needs” of it and “Business Values” outcomes from the Primavera-SAP integration
To make you better understand, let I share an experience of one of my the project, where I was Project Planner (Worked on Primavera application) & one of mine close friend Vijay worked on the SAP system as a Cost Controller.
We both were the part of one of the large projects; Delhi Metro Phase –II (with the budgets of hundreds of million dollars). For managing such a high value & complex project, our company was using both Primavera (For Scheduling) & SAP (For Cost Controlling), but both software as the standalone applications without any Integration.
Being Project Planner & Cost Controller, below were the challenges we faced during the execution in terms of Project controlling (Schedule & Budget)
Standalone Systems: Our company invested a heavy amount in project controlling tools like Primavera & SAP. But both were the standalone software and did not allow us to exchange pieces of information & transaction data. The Master Schedule (Detail Project Schedule) which I created in Primavera application was not cost & resource loaded. Vijay was responsible for preparing budget & later posting actual commitments/cost in the SAP system
At that time we did not have any system which has the capability to track how actual commitments compare against the approved budgets and provide the forecasts.
Managing Multiple excel sheets: To prepare weekly reports (Cash Planner & Cashflow), Vijay used to manually extract multiple sets of data (excel sheets) from the SAP system and then later, consolidate all the piece of information together and aligned it with Milestone Tracker (based on Primavera schedule). The entire above process of exporting data & creating reports consumed lots of time & efforts (so many late night sittings & cigarettes). Vijay had to work on various excel sheets to track budgets, actuals & forecasts etc. It was like a spider web for us.
In order to create accurate reports (Cash Planner), the extracted data from SAP & P6 required so many formulae’s & rigorous calculations. And we had to prepare the cash planner in a very short notice of time. Hence sometimes we made mistakes due to complex formulae. This often results in a lack of confidence by the Project Director/BU team.
Delay Impact Analysis on Cashflow: Calculating the impact of any delay (due to material deliveries or any other issue) on cash flow was so complex & time-consuming process. First, I had to update the Primavera Schedule and later based on the revised Primavera schedule, Vijay had to revise his cash planner. Milestone completion dates & cash forecast was not directly linked.
Critical Material delivery Tracking: As purchase order was released from the SAP and the material requirement forecast was managed in Primavera application. It was very difficult for us to synchronize the material requirement & delivery dates from the various vendors. We did not have a system to align material deliveries based on the revised Primavera schedule.
Apart from above, we had faced so many other challenges even after having the excellent project controlling tools like Primavera & SAP.
Hence based on my experience, below are the business needs for an organization having both Primavera & SAP applications for Project controlling
- Real Time & Ready available Project Reporting with minimum efforts.
- High-quality resource & cost loaded Primavera schedule with the capabilities of capturing actual cost.
- A system for reducing manual efforts to update information from one application to other application.
- Early Warning system to timely warns the procurement department with the revised material delivery dates.
- A system to maintain the same WBS structures in both SAP and Primavera.
- A system to monitor the Physical progress Vs Financial progress at WBS & project level.
- A system to maintain resources in the SAP and can move into Primavera for project scheduling.
- A mechanism that leverage individual strengths of Primavera & SAP.
Business Value Addition: Project Controllers will get the following values from an Integrated Primavera-SAP system.
- Higher efficiency: By reducing the duplication of data (Resouces, WBS, Budget etc) re-entry into both Primavera & SAP separately.
- Higher Reliability: Providing accurate project performance reporting, without human error.
- Improve Transparency: Better forecasting on long lead critical material items reduce project risk.
- Increase Productivity: By reducing the manual effort of cost controllers and planner.
- Improve Collaboration: In an integrated system, all the project members can participate in a better way.
- Standardization: By Creating Standard WBS structure templates across the different applications.
The advantages of the Primavera-SAP Integrated system.
Single system throughout the project lifecycle: A single system for Project Controlling (Schedule/Cost). It has capabilities of managing all project aspects like Capital Planning, Budgeting, Commitments, Actuals, forecasting, Change Management, Reporting and Earned Value etc.
Earned Value Dashboards: Baseline cost & progress data from Primavera and the Actuals from SAP can be used to generate earned value dashboards.
Improved Forecast Metrics: Progress data from Primavera and the Actuals from SAP will provide you with better forecast metrics.
Freedom form world of Excel: Instead of working on multiple excel sheets for the managing budget, actual & forecast, all can be done on a web-based online system.
Dynamic Planning and Scenario Analysis: System can quickly respond to changes due to any delay. The Integrated system allows for “what-if” scenario analysis and showing how changes can impact the overall project deadline, budget & profit margin.
Improved Reports: Accurate, timely and Powerful Reporting can be achieved by Integrated Primavera -SAP System. A bit faster, more efficient and accurate milestone tracker, budgeting, forecasting, and progress reporting.
Hope this post may address your queries regarding Primavera – SAP Integration requirement. Please let me know in case if you are interested to know more about Primavera-SAP Integration Solution.