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What is SAP CPM? Introduction to SAP Commercial Project Management

DevWorkbench    Monday March 3rd, 2014   

In February of 2013, SAP announced the development of a new solution in the area of customer project management. The integration of SD (Sales) and PS (Project System) is possible in the SAP ERP system today, however many consultants agree that the implementation of the project sales process is cumbersome and the end result does not provide the necessary overview to get a firm grip on what’s actually going on in your projects. Finally, SAP have recognized this deficiency and consequently SAP CPM was released as Version 1.0 in 2013. It’s officially called CA-CPD because CPM is already taken by the Corporate Performance Monitor; I will, however, use the term SAP CPM in this article. SAP are selling it as the new solution for project based businesses; it’s provided as an extension to the core SAP ERP system. Time to take a good, hard look at it and see what it can do!

Why should you use SAP CPM / CA-CPD?

We’re currently seeing a shift in business structures throughout all industries. Project related business services, according to SAP, make up approximately 20% of business worldwide! This puts a lot of emphasis on companies’ ability for smooth and flexible project execution, and that is where SAP CPM is supposed to help us. Three main challenges are recognized in the field of commercial project management today:

  • Low process transparency and poor employee productivity, due to missing and distributed information
  • Low efficiency and flexbility, resulting in long throughput times especially for project changes
  • High project failure rates and low profit margins

Of course, SAP claim to fix all that and provide us with more transparency through a unified UI, better user experience, and therefore improve project profitability and process efficiency as well as reduce risks. The target groups for the use of SAP CPM are project leaders and managers as well as executives in the project organization.

The project lifecycle

Before we take a look at the SAP Commercial Project Management application itself, let’s first discuss the model of a project lifecycle that constitutes the philosophy of SAP CPM. That will make life easier later on when we actually look at the application itself, because we’re clear about which parts of the project lifecycle can actually be performed in SAP CPM. The typical project in SAP CPM has three major phases – Sell, Plan and Execute -, during which certain activities occur. Some presentations list 4 or 5 phases, but the activities are basically the same. The following diagram gives you an overview about what happens in which phase. The activities displayed in bright blue are the ones where the functionality of SAP Commercial Project Management supports us; although for some of them additional tasks have to be done on the ERP side (e.g. for billing). Still, quite a big part of the whole project lifecycle is covered by SAP CPM functionality. The smaller yellow boxes tell you which component of SAP CPM is used for each individual step.

Project Lifecycle in SAP CPM

An example project lifecycle in SAP CPM

Keep in mind that this is an example process that is shown here for explanation purposes – some steps might be different or in another order for your company’s processes.

Core features and functions of SAP CPM

Time to step into the application and look at the things that are under the hood. The key benefit of SAP CPM / CA-CPD is that it provides one user interface to do things that are complicated and distributed across multiple functions in ERP. Don’t be mislead, though: quite a lot of the stuff you do still happens with the usual objects in SAP ERP,  it’s just a new interface on top. The three main pillars of SAP CPM functionality are:

  • Project workspace
  • Revenue and cost planning
  • Project issue and change management

The Project Workspace

Building a Master Project

The centerpiece of SAP CPM is the new major business object that is introduced with it, called a Master Project. It can be thought of as a big bucket that holds all documents that are related to your project, such as PS Projects and WBS Elements, Sales Orders, Quotations or Purchase Orders. You can even link objects from other systems such as SAP CRM Opportunities, SAP PPM Portfolio items or even Salesforce.com documents (a BAdI implementation is necessary for that). The Master Project is the reason why SAP CPM is such a big gain in usability, enabling you to use SAP CPM as one source of truth and jumping directly into target systems if necessary.

A Master Project has a structure, which is basically comprised of all the business objects that have been added to it. This structure can be shown in several different views with varying scopes and targets. For example, you can only show sales objects and purchasing objects or only the WBS and network structure. This allows employees with different roles to focus only on the objects that are important to them.

Depending on how you set up SAP CPM, most of the Master Project building happens automatically, based for example on the account assignment of a sales order or a purchase order. You can always add additional documents manually in order to have the full view of your project, and of course you have the usual customizing options such as different types of master projects that encompass different types of sub-objects, and so on. After the Master Project is set up, you can easily access all relevant documents from the Project Overview.

Cross-Project View

The project workspace is your main entry point in SAP CPM. It basically consists of the Cross-Project View, which gives you an overview about all projects you’re involved in, and several configurable project detail views that are used for project monitoring and control.

The really cool thing about the cross-project view are the configurable alerts that can be set up for each user. You will then be able, for example, to get a red light for all projects that have gone over budget/over time/et cetera, which is perfect for the higher management levels that have to monitor multiple projects. Some of these alerts are delivered out-of-the-box, and of course you can define your own.

Project Overview

Once you enter a project, you are taken to the Project Overview. In this set of screens, you can see all relevant information about your project. Depending on which view you select, you will see information about dates, costs, resources, issues or many other things.

Here, the resource view has been selected, which displays as a default the planned and actual costs of the necessary resources in the project. There are several different screens in the standard, and again, you can define your own screens however you like. Really neat about these views is the embedded analytics part, which can graphically display the information you’re viewing, enabling a much quicker overview about what’s going on.

Status Management

Another neat thing that shows that SAP seem to have put some thought into this is the status management functionality. Don’t confuse this with the classic SAP ERP user status functions. In SAP CPM, you can set the system to require periodic reviews of any desired parts of the project. For example, if your line management requires an update of the project plan every four weeks, you can set the system up accordingly. After an update has been put in, the system can create a status report out of it that displays the changes made, optional comments and even a trend indicator. This is a nice piece of functionality that covers the ever-present requirement to constantly report on the project progress.