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PROJECT SYSTEM Business Blueprint

Submitted to

Druk Green Power Corporation and Druk Holding & Investments

By

Wipro Ltd. 27/10/2010 Version 0.9

eGreen PS Business Blueprint

DOCUMENT APPROVALS
Prepared By:

(Mr.Benarji Prasad)

.
Wipro Lead Consultant
Reviewed By:

Date

(Ms. Tashi Lhamo)

Core Team Member


Reviewed By:

Date

(Mr. Chador Tenzin)

Core Team Member


Reviewed By:

Date

(Mr. Karma Gyamtsho)

Core Team Lead

Date

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eGreen PS Business Blueprint

Reviewed By:

(Mr. Rajneesh Sharma)

Wipro Project Lead


Reviewed By:

Date

(Mr. Balaji Srinivasamurthy)

Wipro Project Manager


Reviewed By:

Date

(Mr. Jambay Tshering)

Druk Green Power Corporation Project Manager


Approved By:

Date

(Dorji P. Phuntshok)

Druk Green Power Corporation Business Process Owner

Date

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eGreen PS Business Blueprint

DOCUMENT INFORMATION
Project Name e-green Document Name PS Business Blueprint Document Location Document Server

DOCUMENT HISTORY
Version 0.8 0.9 Document Name Business Blueprint Business Blueprint Date 15.08.2010 27.08.2010 Authors Benarji Prasad Benarji Prasad Reviewed BY Change Control COE/ Core COE team review recommendations Core team/ PMs Acronyms

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TABLE OF CONTENTS EXECUTIVE SUMMARY............................................................................11 1.1 BACKGROUND ....................................................................................11 1.2 BUSINESS BLUEPRINT OVERVIEW.........................................................12 1.3 PROJECT SYSTEM.................................................................................13 1.4 INTEGRATION......................................................................................13

1.1. Financial Accounting:......................................................................................13 1.2. Controlling: .................................................................................................14 ........................................................................................................................14 1.3. Investment Management (IM): .......................................................................14 1.4. Asset Accounting: .........................................................................................14 1.5. Material Management: ...................................................................................15

ORGANISATION STRUCTURE...................................................................16 1.5 Client: ...............................................................................................16 1.6 Controlling Area: .................................................................................16 1.7 Company code: ...................................................................................17 1.8 Profit Centre: .....................................................................................17 1.9 Cost Centre: .......................................................................................17 1.10 Plant: ..............................................................................................17 1.11 Storage Location: ..............................................................................18 1.12 Personnel Area: ...............................................................................19 MASTER DATA.......................................................................................20 1.13 Project Definition: .............................................................................20 1.14 Work Breakdown Structure (WBS): ......................................................20 1.15 Network and Activities: .....................................................................22 1.16 Milestones: .......................................................................................23 1.17 Work Centre: ....................................................................................23 1.18 Document Info Record (DIR): .............................................................23 1.19 PS Texts: .......................................................................................23 1.20 Material Master:.................................................................................24 1.21 Service Master: .................................................................................24 1.22 Activity Type: ..................................................................................24 .............................................................................................................24 1.23 Cost element: ..................................................................................24 1.24 G/L Account: ...................................................................................24 BUSINESS PROCESS...............................................................................25 1.25 Project Initiation & Structure................................................................25
1.25.1 1.25.2 1.25.3 1.25.4 1.25.5 1.25.6

Purpose of Creating Project Structure:...........................................................26 Master Data: .............................................................................................27 Solution in SAP:..........................................................................................27 Standard Project: .......................................................................................35 Simulation Version:.....................................................................................36 Project Versions:.........................................................................................37
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1.25.7 Project Status:...........................................................................................37 1.25.8 Key Integration Touch Points:.......................................................................37 .......................................................................................................................40 1.25.9 Description of Improvements: .....................................................................40 .....................................................................................................................40 1.25.10 Process controls:.......................................................................................40 1.25.11 Description of Functional Deficits /Gaps: .....................................................40 1.25.12 Approaches to Covering of Functional Deficits /Gaps: ....................................40

1.26

Date Planning....................................................................................41

1.27

1.26.1 1.26.2 1.26.3 1.26.4 1.26.5 1.26.6 1.26.7 1.27.1 1.27.2 1.27.3 1.27.4 1.27.5 1.27.6 1.27.7

Planning of Resources and Material.......................................................44

Master Data:..............................................................................................41 Solution in SAP:..........................................................................................41 Key Integration Touch Points: ......................................................................42 Description of Improvements: .....................................................................43 Process controls:........................................................................................43 Description of Functional Deficits /Gaps ........................................................43 Approaches to Covering of Functional Deficits /Gaps: .....................................43 Master Data:..............................................................................................44 Solution in SAP:..........................................................................................44 Key Integration Touch Points: ......................................................................46 Description of Improvements: .....................................................................47 Process controls:........................................................................................47 Description of Functional Deficits /Gaps: .......................................................47 Approaches to Covering of Functional Deficits /Gaps: .....................................48

1.28

Planning of Cost ................................................................................49

1.29

1.28.1 Purpose:....................................................................................................49 1.28.2 Master Data:..............................................................................................49 1.28.3 Solution in SAP:..........................................................................................49 1.28.4 Key Integration Touch Points: ......................................................................50 1.28.5 Description of Improvements:......................................................................51 ........................................................................................................................51 1.28.6 Process controls:........................................................................................51 1.28.7 Description of Functional Deficits /Gaps: .......................................................51 1.28.8 Approaches to Covering of Functional Deficits /Gaps: .....................................51

Budgeting ........................................................................................52

1.30

1.29.1 Purpose:....................................................................................................52 1.29.2 Master Data...............................................................................................52 1.29.3 Solution in SAP:..........................................................................................52 1.29.4 Key Integration Touch Points:.......................................................................55 1.29.5 Improvements ...........................................................................................56 1.29.6 Process controls:........................................................................................56 1.29.7 Description of Functional Deficits /Gaps:........................................................56 ........................................................................................................................56 1.29.8 Approaches to Covering of Functional Deficits /Gaps: .....................................56

Procurement .....................................................................................57

1.30.1 1.30.2 1.30.3

Purpose:....................................................................................................57 Master Data:..............................................................................................57 Solution in SAP:..........................................................................................57

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1.30.4 1.30.5 1.30.6 1.30.7 1.30.8 Key Integration Touch Points: ......................................................................59 Description of Improvements: .....................................................................60 Process Controls:........................................................................................60 Description of Functional Deficits /Gaps: .......................................................61 Approaches to Covering of Functional Deficits /Gaps: .....................................61

1.31

1.31.1 Purpose:....................................................................................................62 1.31.2 Master Data:..............................................................................................62 1.31.3 Solution in SAP:..........................................................................................62 1.31.4 Key Integration Touch Points: ......................................................................66 1.31.5 Description of Improvements: .....................................................................67 1.31.6 Process Controls:........................................................................................67 1.31.7 Functional Deficits /Gaps: ...........................................................................68 1.31.8 Approaches to Fill the Functional Deficits /Gaps:.............................................68 ........................................................................................................................68 1.32.1 1.32.2 1.32.3 1.32.4 1.32.5 1.32.6 1.32.7

Project Execution ..............................................................................62

1.32

Period end Closing..............................................................................69

Master Data:..............................................................................................69 Solution in SAP:..........................................................................................69 Key Integration Touch Points: ......................................................................71 Description of Improvements: .....................................................................71 Process Controls:........................................................................................72 Description of Functional Deficits /Gaps: .......................................................72 Approaches to Covering of Functional Deficits /Gaps .......................................72

INTERFACES..........................................................................................73 1.33 Open PS:..........................................................................................73 1.34


1.33.1 1.33.2 1.34.1 1.34.2

Primavera:........................................................................................75

Purpose:....................................................................................................73 Process: ..................................................................................................73 Purpose: ...................................................................................................75 Solution:....................................................................................................75

STANDARD INFORMATION SYSTEM.........................................................76 ANNEXURES..........................................................................................79 1.35 Annexure 1 Key Data Structure ........................................................79 1.36 Annexure 2 Business Process Master List............................................80 1.37 Annexure 3 Consolidate FRICE Objects...............................................80 1.38 Annexure 4 Business Processes.........................................................80

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eGreen PS Business Blueprint Acronyms


Acronyms AM AR AUC BBP BCWP BCWS CATS CDM CO CLSD CPI CSBP CTM CV DoE DoP DGPC DHI DHPC DMS DPR Description Asset Management Appropriation Request Asset Under construction Business Blueprint Budgeted Costs of Work Performed Budgeted Costs of Work Scheduled Cross Application Time Sheets Clean Development Mechanism Controlling Closed Cost performance index Current State Business Process Core Team Members Cost Variance Department of Energy Delegation of Power Druk Green Power Corporation Ltd., Druk Holding & Investments Dagachhu Hydropower Corporation Document Management System Detailed Project Report

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Acronyms EAC ECC ERP FI FIAA FICO FRICE FS FSBP FXA GL HCM IM MM MRP MTA NEC O&M PA PO POC PR Description Expected Cost Calculation ERP Central Component Enterprise Resource planning Finance Finance Asset Accounting Finance & Controlling Forms, Reports, Interfaces, conversions and Enhancements Feasibility Study Future State Business Process Fixed Assets General Ledger Human Capital Management Investment Management Material Management Material Requirement Planning Milestone Trend Analysis National Environment Commission Operations & Maintenance Personnel Area Purchase Order Percentage of completion Purchase Requisition

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Acronyms PS PP PSMP RS R&M SAP SD SV TECO WBS Description Project System Production Planning Power System Master Plan Reconnaissance Study Renovation & Modernization Systems, Applications and Products in data processing Sales & Distribution Schedule variance Technically Completed Work Breakdown Structure

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EXECUTIVE SUMMARY
1.1 BACKGROUND

Druk Green Power Corporation Limited (DGPC) was incorporated under the Companies Act of the Kingdom of Bhutan on 1st January 2008 through a merger of the erstwhile Basochhu, Chhukha, and Kurichhu Hydro Power Corporations. Further, DGPC took over the Tala Hydropower Plant from the Tala Hydroelectric Project Authority on 1st April 2009. Meanwhile, DGPC also started the construction of the 114 MW Dagachhu Hydroelectric Project. Today DGPC is one of the largest corporate bodies in Bhutan contributing to 20% of the GDP and 45% of the direct revenues to the Royal Government of Bhutan. Amongst its many mandates, the two major missions of DGPC are to effectively and efficiently manage hydropower plants, which was the traditional role of the erstwhile Hydro Power Corporations, and now more importantly to take a lead role in accelerating hydropower development in the Kingdom by developing new hydropower projects independently, through joint ventures, or through any other arrangement with domestic and international partners. Considering these mandates and especially with the plans of the Royal Government of Bhutan to develop an additional generation capacity of 10,000 MW by 2020, DGPC is set to grow in leaps and bounds within this decade itself. Given its present size and the expected huge growth and expansion in the size and scale of its operations over the next decade, the already diverse and complex business processes and operations will become even more demanding and arduous. Implementation of SAP ERP Solutions is one of the initiatives that DGPC has taken up to address these and run the power plants more efficiently. The SAP implementation project has been initiated with effect from 15th May 2010 with the following vision and mission and objectives. Vision: To transform and leverage business processes of DGPC and Druk Holdings and Investments through the use of SAPs best practice. Mission: To implement SAP ECC 6.0 project in time with minimum customization through co-operation of all; by giving prominence to larger objectives and to avail benefits of integration and industry best practice.

Objectives: The primary objectives of the Project are as follows: Integrate all business process across the organization, under single SAP platform with minimum interfaces. Elimination of duplication of activities across business processes by capturing data at source point. Develop central and secured MIS for better analysis of operations and decision-making process. Develop history of various types of data for statistical analysis and decision-making systems Adopt best business practices, taking advantage of SAP best practices. Common understanding and methodology of work, for majority of the processes, within various departments, plants, units. Form basic infrastructure of communication and networking for adoption of advanced business software - SAP.

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1.2

BUSINESS BLUEPRINT OVERVIEW

The following activities have been covered in the business blueprint phase: FSBP process definitions and identification with reference to CSBP processes files are attached in Table 1. FSBP discussion with core team members along with changes in existing Organization structure, standard reports available in SAP. Incorporation of any comments by the reviewers wherever justified and applicable.

Table 1: Attachments of CSBP Business Processes Mapping with FSBP S. No. 1 Attachments Description Hydropower projects
2_BP_FSBP_PS_Hydr o_0.8.xls 2_BP_FSBP_PS_Hydr o_0.9.vsd

Infrastructure projects 2
2_BP_FSBP_PS_Infra _0.8.xlsx 2_BP_FSBP_PS_Infra _0.9.vsd

Renovation & Modernization 3


2_BP_FSBP_PS_R&M _0.9.xls 2_BP_FSBP_PS_R&M _0.9.vsd

Druk Holdings & Investment 4


2_BP_FSBP_PS_DHI_ 0.8.xls 2_BP_FSBP_PS_DHI_ 0.8.vsd

The objectives of this document are: 1. 2. 3. To identify and document the proposed SAP Business processes based on FSBP discussions. Brief about the modules standard functionalities, its integration with other modules, master data requirements and relevant organization structure. Have one comprehensive document with reference to capturing of Gaps and FRICE requirements.

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1.3 PROJECT SYSTEM

In DGPC/ DHI, Project System module shall be used for mapping the business processes for Project Initiation & Structuring, Project Planning, Project Budgeting, Project oriented Procurement, Project Execution, Transfer of Actual cost to CWIP and Project Closure. It is sub divided into: Organization Structure Master Data Project Structure Date Planning Planning of Resource & Material Planning of Cost Project Oriented Procurement Project Execution Project Closure 1.4 INTEGRATION

The Project System module is fully integrated with other modules of SAP R/3. Considering the specific requirements of the organization, the integration takes place among modules. The continuous exchange of information with other application areas in the R/3 System ensures a real time database. Fully integrated processing helps to optimize the project execution within the company. The broad level integration areas with SAP Project System are: 1.1. Financial Accounting: Vendor down payment Invoice verification Vendor payment G/L Asset Accounting Direct postings

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For example, the cost of a material and an external service must be posted to the respective WBS/ Network Activity to track the project cost. 1.2. Controlling: The SAP CO (Controlling) Module provides supporting information to the Management for the purpose of planning, reporting, as well as monitoring the operations of the businesses. Management can take decision with the levels of information provided by this module. Some of the components of the CO (Controlling) Module are as follows: Cost Element Accounting Cost Center Accounting Internal Orders Activity-Based Costing

For example, the cost of internal task/activity is done automatically with the data maintained in activity type; whereas for external activity, the costing will be done automatically through the price maintained in material/ service master. 1.3. Investment Management (IM): SAP IM is a tool designed to enable program management in SAP. Program Management is the process of defining a hierarchy above all the projects with the purpose of planning & controlling costs, including project appropriation management and budget authorizations. Besides PS, the modules which are strongly integrated with IM are Controlling (CO) and Asset Management (AM) modules. Investment Program: It is a component of IM and it represents the planned or budgeted costs for the capital investments (or other projects) of an enterprise or corporate group in the form of a hierarchical structure. We can define the hierarchical structure in accordance to organizational needs. It is not dependent on organizational units in the SAP R/3 System (such as, profit centers, plants, and so on). Following concepts are part of Investment Program: Investment Measure: An individual investment which needs cost and financial accounting are handled through internal orders, projects and maintenance orders with the help of investment measure. Appropriation Request: It is used for planning and approval phase of investments.

1.4. Asset Accounting: The Asset Accounting (FI-AA) component is used for managing and supervising fixed assets with the SAP R/3 System. In SAP R/3 Financial Accounting, it serves as a subsidiary ledger to the FI General Ledger, providing detailed information on transactions involving fixed assets. Asset under construction: Fixed Asset Settlement

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For example, a periodic settlement is done for WBS to move the cost from WBS to AUC (Asset under Construction). The project and WBS are closed technically and the final settlement is done during the capitalization of fixed asset. 1.5. Material Management: In addition to Material and service master, vendor master is also used for projects procurement transactions. The broad levels of integration with material management are: Purchase requisition Purchase order Good receipt Invoice receipt Material issue

Human Capital Management: Employee master data will be used for workforce planning for project activities.

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ORGANISATION STRUCTURE
The Project System module has no organizational structure of its own but it uses the organizational structure defined in financial accounting and Logistics modules. While defining the project process (during project creation), we can default the Company Code, and Plant which can be changed and assigned as and when required in the work breakdown structure. However, the company code cannot be changed once the cost planning, budgeting or actual values are posted to that particular project. Creation of Project and WBS Elements will be done by the authorized person. Any changes in Project and WBS Elements which can be adding, deleting and releasing of all or individual WBS element can be done by authorized person only. Following are the organizational structures of other modules on which SAP PS is dependent on: 1.5 Client:

The client is the highest hierarchical level in the SAP system. The specifications that are configured or data that are entered at client level are valid for all company codes and for all other organizational structures, such as sales organization and purchase organization. Consequently, these specifications are to be entered only once. Central maintenance ensures standardized data storage. For example, Customer addresses are stored at client level so that all company codes can access the data. Different functional areas also use these data, like customers address for sending out an order confirmation as well as for printing a dunning notice (reminder letter). Each client is a self-contained unit with separate master records and a complete set of tables. A client key is used in all master records, which ensures that they are stored against the client. A user master record must be created with access authorizations. While logging on the system each user must specify a client key. The code of the client for DGPC and DHI defined in the system is shown in table 2.

Table 2: The Code of the Client


Client Druk Green Power Corporation Druk Holding & Investments 1.6 Controlling Area: Code DHI1 DHI1

An Organizational Unit within which management accounting is performed. Many company codes can be assigned to the same Controlling Area as long as they share common Chart of Accounts and Fiscal year variant. The codes of the Controlling Area which are defined in FI/CO module are shown in table 3 and the project system uses the same structure for the project processes.

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eGreen PS Business Blueprint Table 3: The Code of the Controlling Area


Company Druk Green Power Corporation Druk Holding & Investments 1.7 Company code: Code DP01 DI01

A Company Code is the central organizational unit in Financial Accounting in SAP system. It is the smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created. A complete set of financial statements includes the balance sheet, income statements and statement of cash flows. All transactions that would form the complete set of accounts should be posted and evaluated at the company code level. All transactions in SAP which has a financial impact are posted to a company code. This will ensure that data used to generate financial statements is complete. All Management Information System (MIS) reporting in finance for a legal entity also is derived from company code dimension. The codes of the company which are defined in FI/CO module are shown in table 4 and the project system uses the same structure for the project processes.

Table 4: The Code of the Company


Company Druk Green Power Corporation Dagachhu Hydropower Corporation Druk Holding & Investments Code DG01 DH01 DI01

1.8

Profit Centre:

A Profit Centre is a management-oriented organizational unit used for internal controlling and reporting purposes. It allows analyzing areas of responsibility by revenues generated and costs incurred, treating them as companies within the company.

1.9

Cost Centre: A Cost Centre is a management-oriented organisational unit used for internal controlling and reporting purposes. In business, a cost centre is a division that adds to the cost of an organization thereby giving overview of its profit.

1.10

Plant:

It is an organizational unit, which subdivides an enterprise according to production, procurement, maintenance, and materials planning aspects. In case of DGPC, the power generating Plant and Corporate Office would be treated as Plants in SAP. Similarly for DHI, corporate office will be treated as Plant. The codes of the plant which are defined in
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Materials Management module are shown in table 5 and the project system uses the same structure for the project processes.

Table 5: The Code of the Plant


Plant Druk Green Power Corporation Basochhu Chhukha Kurichhu Tala Dagachhu Druk Holding & Investments 1.11 Storage Location: Code DG01 BS01 CH01 KU01 TA01 DA01 DH01

Storage location is a place where stock is physically kept within a Plant and is the lowest organizational unit within the Material Management module. Each inventory holder in DGPC is defined as a storage location in addition to physical locations. Extracted Organizational structure for projects of DGPC is as shown in Figure 2.1. Controlling Area DP01
Druk Green Power Corporation

Company Code DG01


Druk Green Power Corporation

Company Code DH01 Dagachhu Hydropower Corporation

Plant DG01 DGPC CO

Plant BS01 Basochhu

Plant CH01 Chhukha

Plant KU01 Kurichhu

Plant TA01 Tala

Plant DA01 Dagachhu


Storage Location

Storage Location

Storage Location

Storage Location

Storage Location

Storage Location

Figure 2.1: Organizational structure of DGPC

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Extracted Organizational structure for projects of Druk Holding and Investments is as shown in Figure 2.2. Controlling Area DI01
Druk Holding and Investments

Company Code DI01


Druk Holding and Investments

Plant DH01 DHI

Storage Location

Figure 2.2: Organisational structure of DHI 1.12 Personnel Area:

It is an organizational unit according to personnel, administrative, time management and pay roll and is assigned to the company code. It also helps in segregating the employee strength with respect to different locations. The employee number range is defined based on the personal area and is shown in Table 6. Table 6: Personnel Area with Code Company & code Druk Holding & Investments (DI01) Druk Green Power Corporation (DG01) Druk Green Power Corporation (DG01) Druk Green Power Corporation (DG01) Druk Green Power Corporation (DG01) Druk Green Power Corporation (DG01) Dagachhu Hydropower Corporation (DH01) Personnel Area & code Druk Holding and Investments (DI01) DGPC corporate office (DG01) Basochhu (BS01) Chhukha (CH01) Kurichhu (KU01) Tala (TA01) Dagachhu Hydropower Corporation (DH01)

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MASTER DATA
Project System has the following objects/ master data for defining Project Management process. Project Definition Work Breakdown Structure (WBS) Network and Activities Milestones Work centres Document Info record (DIR) PS Text Material and service components Creation and Maintenance of the data for Project Management processes as required by DGPC will be covered in SAP project system and the creation of materials and services for the same will be maintained in SAP materials management module. 1.13 Project Definition:

It is the binding framework for all organizational elements within a project. It has overall project start and finish dates, and the project objectives (responsible person, PS text, etc) are defined in the project definition. For example, a project definition includes the project profile and organizational details (controlling area, company code, etc.). 1.14 Work Breakdown Structure (WBS):

It is a hierarchical model of the project that organizes project work packages at various levels. It is the functional basis for further project planning, for example, WBS element structure will be created for cost planning, scheduling, as well as project control. It gives overview of the project and facilitates the coordination and implementation of the project. The main objective of the WBS is to split the project into manageable units, to define basic dates, and determine its costs. The WBS divides the project, step-by-step into structured elements. These elements are called Work Breakdown Structure elements (WBS elements) in project system. Each WBS element is a result due to this splitting. The WBS can be structured from various viewpoints, as given below:

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eGreen PS Business Blueprint


By phase (logic or process oriented) By function (function-oriented) By object (object-oriented) A Typical Project Systems hierarchy structure is shown in Figure 3.1:
Project Project Definition Definition Company code Controlling area WBS WBS Element Element

Plant Controlling area

Networks Networks Plant Activities Activities

Company code Plant

Internally Internally Processed Processed Activity Activity Plant Work Centre

Externally Externally Processed Processed Activity Activity Plant Purchasing org Purchasing Group General General Costs Costs Activities Activities Plant

Material Material Component Component Purchasing org Purchasing Group Plant Storage location

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Figure 3.1: Hierarchical structure of Project System 1.15 Network and Activities:

A network represents the flow of a project or of a task within a project. It is a group of activities arranged in a relationship. Various structural elements of a project and their interdependencies can be displayed graphically using Critical Path Method (CPM) in the Project System. An Activity must have: Duration A defined start and a defined finish Processed without interruption Resources required to execute them Incurring costs During the life of a project, networks are used as a basis for planning, analyzing, controlling and monitoring schedules, dates and resources (such as people, machines, materials, documents and drawings). You can assign networks to a project. A network comprises the following: Activities Activity elements Relationships Relationships determine the chronological sequence of activities in a network. There is usually a reason for a specific sequence of activities in a network. For example, there may be technical dependencies between individual activities and are represented by relationships in which one activity is the predecessor or the successor of another activity. The following Internal Number Range will be maintained for the network for DGPC/DHI Business.

Table 3.1: Internal Number Range for Network


Group DG01 TA01 KU01 CH01
Wipro Ltd.

From Number 100000000 200000000 300000000 400000000

To Number 199999999 299999999 399999999 499999999


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BS01 DA01 DH01 500000000 600000000 700000000 599999999 699999999 799999999

1.16

Milestones:

They are used to mark the transition between various phases in a project and are also used for monitoring and trend analysis. For example, Project events which are important for the progress can be created as milestones. 1.17 Work Centre:

Work centers are the combination of equipment and persons involved in internally processed activities that have capacities. They are subdivided into categories to specify their suitability to use for certain purposes. For example: Personnel involved in an activity which are also recorded as employees in personnel administration Company-owned resources (Machines) involved in an activity The work center may be a group of fitters, electricians, plumbers or a representation of maintenance crew in any location. The work center contains the details of capacity by the way of man-hours. 1.18 Document Info Record (DIR):

It is a master data in Document Management System (DMS) representing a document or a set of documents. This information is either for the person responsible or for exchanging between different systems. A document contains information that can be stored in the form of technical drawings, graphics, programs, or text. For example: All Tendering, project proposals, designs will be stored in DMS and attached to the respective WBS elements. 1.19 PS Texts:

During project processing, any information can be entered into project systems, in the form of PS texts and can be emailed to the member of the project team. PS texts are managed by means of description which can be edited using PS texts catalogue or in the project (Project builder or the project planning board). Other Masters: There are other Master records which would be used by the Projects Department during planning or while processing the activities. This includes: Material Master Service Master

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eGreen PS Business Blueprint


Activity type Cost element G/L Account 1.20 Material Master:

A company manages its materials in the material master. Material master consists of spares and consumables, which are categorized by the type, group etc. These materials are stored in storage locations with reference to respective WBS. 1.21 Service Master:

It is a repository for the descriptions of all services a firm frequently hires. There is a service master record for each service description. The service master database is a source of default data set by the system when service specifications are created. For example: While creating service activity, service masters can be copied and purchase requisition will be created. 1.22 Activity Type:

Activity type classifies the specific activity provided by the cost centers and determines the quantity output of the cost centre. A cost centre may have multiple numbers of activities. For example: Project manager hours, Machine hours and labour hours. 1.23 Cost element:

A cost element is an item in a chart of accounts. Cost elements are of two types i.e., primary and secondary cost elements. The primary cost or revenue elements must have a corresponding GL account in financial accounts. Secondary cost element exits only in controlling and is used to allocate costs within company. 1.24 G/L Account:

G/L account master records contain the data to determine the account's function and control the posting of accounting transactions to G/L accounts and the processing of the posting data. For example, it is used to record expenses and income.

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BUSINESS PROCESS
1.25 Project Initiation & Structure Existing Processes Hydropower Projects: Based on the Power System Master Plan, the projects are identified by Projects Department or DGPC Management. Project team prepares proposal and submits to DGPC Management and then approval is sent to Board. After getting approval from Board, project team estimates cost (rough cut cost planning) for the project and submits to Competent Authority as per Delegation of Power (DoP) for approval. Planning and design of hydropower projects involve uncertainties which requires different sciences and technical, environmental, social and economic expertise that investigations have to be organized in a rational and structured manner. However, the result of project investigations may prove to be negative and investigations are therefore arranged in steps or phases. Therefore hydropower project developments involve several phases like Desktop Study, Reconnaissance Study, Pre-Feasibility Study, Feasibility Study, DPR Study, and Execution. To initiate each phase, project team has to prepare cost estimation and it should get approved from the Competent Authority. Based on phase report submitted, Competent Authority will decide whether to proceed to next phase or not. Infrastructure Projects: The project team or the management will identify project based on the requirement. Project team prepares proposal and submits to Competent Authority as per DoP for approval. If any clearance(s) are required from the concerned agency for construction, application will be submitted. Competent Authority takes decision whether project would be executed internally or outsourced to the contractor. Renovation and Modernization: Project proposal will be submitted by Operation & Maintenance Division or Department based on technological progress or if the plant has passed successful life of 25 to 40 years. Competent Authority takes decision whether to take up study internally or to be outsourced. Meanwhile, project plan will be prepared to conduct study for renovation and modernisation. After completion of the study, the O & M Division will submit the study report to the Competent Authority for review and approval. The Competent Authority decides whether to implement (internally/outsourced) or to close the project. Accordingly the project structure will be created for execution in the system.
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DHI Projects: Projects are initiated at DHI via three different channels. Projects may be directly handed over by the government to DHI to spearhead and implement, projects may be proposed by private individuals/companies from both outside and inside Bhutan and finally projects may be initiated by the DHI project team based on DHIs investment plans and other related research. Once DHI receives a proposal to develop a project through any of the above channels, DHI management conducts a short pre-feasibility study of the project and then takes decision on whether to submit the proposal to the Board for approval or not. If project is approved, DHI management will assess how to go about with the project. Further studies as required may be conducted internally or outsourced depending on the capacity available. If project is internal, project team prepares project plan.

1.25.1

Purpose of Creating Project Structure:

The structuring of a project is important since it has impact on budgeting and also on project settlement and reporting. Depending on the type of project and the emphasis on the project monitoring, the structure will be created in the Project System using the operative structures i.e., Work Breakdown Structure & Network. The purposes of creating project structure are as follows: To plan Capital Investments by individual Departments. To have a functional basis where process planning, cost planning, scheduling as well as project control can be done. To have a system where planning, analyzing, controlling and monitoring schedules and resources can be done. To document the various activities that has been performed during the project along with the duration. To plan and procure the components and services required during project implementation. To capture the cost incurred during project execution.

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Table 4.1.1: Link of FSBP

S. No.

Major Process

Sub Process

Minor Process

CSBP No. FSBP No.


DGPS01 DGPS02 DGPS03 DHI01

Project Structure

Creation structure

of

1. Creation of WBS project 2. Creation of Network 3. Creation of Activity

1.25.2

Master Data:

It is an object for defining project management process. The master data can be in the form of WBS elements, network activities, work centers, milestones etc. which has been described in chapter 3. 1.25.3 Solution in SAP:

Investment Program Structure: Investment Management program represents the planned or budgeted costs for the capital investments (or other projects) of an enterprise or corporate group in the form of a hierarchical structure. The hierarchical structure can be defined in any form according to the requirement of the company and is independent of organizational units in the SAP R/3 System (such as, plants, and so on). Investment Management programs are also used for planning and budgeting for individual measures such as: Planning of budget Administration of budget Monitoring of a global budget Appropriation request: The functions of appropriation request are as follows: Appropriation requests serve a similar function as purchase requisitions and maintenance notifications.

Appropriation requests allow storing investment plans, ideas in the stages before they are actually implemented concretely.

In the context of capital investment planning, appropriation requests make it possible to include planned investments in cyclical (annual) investment planning using an investment program.

Once the appropriation request has been approved, the information can be transferred to the projects that will be used for actually carrying it out.

Project Definition: Project definition will be created after the following pre-requisites are met: Project has been approved by Management/Board Project has been identified with clear goals Project Name, Structure, Start date and Finish date, and Hierarchy of the WBS Elements are identified by project manager after the necessary approval by the management.

Project Definition Creation: A clearly and unambiguously structured project is the basis for its planning, monitoring, control and success. It forms the basis for organization and coordination in the project. It shows the amount of work, the time required, and the costs involved in the project. Project definition is the binding framework for all organizational elements within a project. In order to carry out a project in its entirety, the project goals (WBS Elements start and finish date etc) must be precisely described and the project activities to be carried out must be structured. Following are the requirements: Overall project start and finish dates are to be defined.

Determine the Project Objectives (Responsible person, text, etc.). After creating project definition the project is to be structured (i.e. finalizing the WBS and WBS Elements) depending on project requirements. Work breakdown structure for the project can be created by using the Work breakdown structure elements. When a project definition is created, a relevant project profile for the project must be assigned.

The project profile contains default values and parameters for processing the project, for example, which factory calendar is used for time scheduling, organizational values such as controlling area, company code, profit centre and plant or which settings are used for graphics that can be passed on to the WBS elements.

Values for the project profile are maintained in Project System Customizing. If a work breakdown structure is created, the project profile is saved in the project definition.

Default settings can be changed from the project profile while working with the work breakdown structure. For example, while creating a project structure for Dagachhu Hydropower Corporation, relevant project profile should be assigned. System will assign organizational units such as controlling area DP01, Company Code DH01, and Plant DA01, from project profile to project definition, WBS elements and Network activities.

Work Break down Structure: The individual levels of the hierarchy in a work breakdown structure enable us to organize a project into steps. A WBS structure could be defined phase wise, function wise, object wise or as a hybrid structure.

For example: Desktop study, RS Study, DPR study, feasibility study and execution is phase wise whereas Civil, Mechanical, electrical and Instrumentation etc., are considered as function wise.

A WBS can further be broken down into steps of individual elements, till the level of detailed breakdown required to carry it out. These elements are referred to as work breakdown structure elements (WBS elements) in the Project System. Work breakdown structure in the project can be divided into useful steps i.e., WBS elements by specifying basic dates, the work involved, and estimated project costs. This is the responsibility oriented structure, mainly depending on how one would like to control (e.g.:-costs) and manage (e.g.:- Information) in the project. The WBS is an important tool, which helps to plan, monitor and control dates, costs, resources and payments. Therefore, the objects where control is required functionally, the same needs to be structured as a WBS, the lowest level representing work packages. It is recommended that a maximum of 3 to 4 level structure is defined for projects with a maximum of 30 to 40 WBS elements, with a standardized structure to represent all DGPC, and DHI projects. It is to be noted that each project should only have one top level WBS element (root WBS element). The three Operative indicators in PS Module are as follows: Planning element Account Assignment Element Billing Element Planning element is to be activated if one wants to plan the costs for respective WBS element. Account assignment element facilitates to post the actual costs to respective WBS element. Billing element allows posting Revenues to respective WBS element. It is always recommended: a) b) c) To activate Planning element indicator to All WBS elements in the structure. To activate Account assignment element to the lower most WBS element since it will be easier to track and settle costs. Since it will be easy to operate with planned costs. In case of hydro power projects, the revenue generated during trail run of turbine, electricity will be generated it results revenue has to be adjusted with project cost. The billing indicator of relevant WBS element has to be activated.

Planning and Account Assignment indicator will be defaulted for the projects through customization. Project Type: Project type in SAP will differentiate one project from another. The following project types have been identified for DGPC 1. Joint venture 2. Own undertaking 3. Grant The following project types have been identified for DHI 4. Domestic JV 5. FDI Project 6. DHI Owned Project

7. PPP (Public Private Partnership) 8. DPP (DHI Private Partnership) 9. Others

Network Structure: Network represents the flow of a project or of a task within a project. Various structural elements of a project and their interdependencies can be graphically displayed through network structure. During the life of a project, networks are used as a basis for planning, analyzing, controlling and monitoring schedules, dates and resources (such as manpower, machineries, materials, documents and drawings etc.,). A network consists of Activities, Activity elements and Relationships and graphically displays the relationships dependent on time to illustrate the logical process chain. The cycle analysis is a function that can be used only in the network structure graphic. A cycle is a closed sequence of relationships and activities ("closed" means that the flow starts from one activity and ends back at the same activity with relationships). If the activity-relationship-activity path is cyclic, the network cannot be scheduled using normal method. In such cases, cycle analysis, a tool that enables to detect cyclic relationships is used to correct them and schedule. Optional: Activities are given in detail by activity elements. Types of activity elements include internal processing elements, external processing elements, and general costs elements. All activity elements have a date reference to the activity to which they are assigned. With respect to DGPC/DHI: Program structure will be created in the form of hierarchy to agree with the organizational plan of DGPC/DHI and can be used to manage projects which belong to one controlling area (DGPC or DHI controlling area).

Appropriation request will be created with reference to the existing node (i.e. Plants or Departments) or to the new node (if the project is not undertaken under existing Plants or Departments) as per requirement. Project proposal document will be attached to Appropriation Request. Competent Authority will review the project proposal. Upon approval by DGPC/DHI Management, it will be further submitted to the Board for review and approval. The person delegated by the Competent Authority may approve or reject in the system by updating or confirming the approval or rejection accordingly. Upon approval from the Competent Authority, project team will create project structure with all the tasks and check list as activities in the system. In case of Hydropower projects, project definition, top level WBS element, will be created. Before initiating each phase project team will seek approval from the Competent Authority and then the structure of the phase will be created in the system.

If standard projects are available, it will be copied as operational projects (optional). When a project definition is created, a relevant project profile for the project must be assigned.

Each project needs to be mapped in the system using a project coding mask. Based on the first two characters in the project coding mask, the system would automatically format the number assigned to the project by following the project coding mask. It is proposed to use the following project coding masks for each of the projects handled by DGPC.

Table 4.1.2: Project Coding Mask for DGPC ID RE IF RM IT Coding Mask RE-000000-00-00-00-00-00 A A B A B B C D E F G Infrastructure Projects Renovation & Modernization Projects Information Technology related Projects C D E F G C D E F G IF-000000-00-00-00-00-00 RM-000000-00-00-00-00-00 IT- 000000-00-00-00-00-00 A B C D E F G Description Renewable Energy Projects

Table 4.1.3: Project Coding Mask for DGPC A B Project identifier First 2 digits represent the kind of project Infrastructure 01: Building 02: Bridge 03: Road Renewable 01: Hydropower 02:Wind Power 03: Solar energy 04: Biomass Renovation and Modernization 01: Building 02: Bridge 03: Road 04: Power Plant Information Technology related 01: IT related project Second 2 digits represent the year in which project has started Third 2 digits represent serial number of the project in that year Level 2 WBS element Level 3 WBS element Level 4 WBS element Level 5 WBS element Level 6 WBS element

C D E F G

Following project coding mask is proposed to use for DHI projects. DP-000000-00-00-00-00-00 A B C D E F G Table 4.1.4: Project Coding Mask for DHI A B DHI projects First 2 digits represent Industry sector Industry Sector Key: 01 = Energy and Resources 02 = ICT 03 = Transportation 04 = Financial Services 05 = Trading 06 = Manufacturing 07 = Services 08 = Infrastructure and Real Estate 09 = Internal 99 = Others Second 2 digits represent the year in which project has started Third 2 digits represent serial number of the project in that year Level 2 WBS element Level 3 WBS element Level 4 WBS element Level 5 WBS element Level 6 WBS element

C D E F G

Once a project is created, next important step in the project process is to structure the project. Using PS, a project can be structured in two ways i) work break down structure and ii) Networks and activities. Both of these are described briefly below.

If project structure is copied from standard project or simulation version, structure can be modified as per requirement. If any task or item in the checklist is not existed in the structure, those can be created as activities. If any task involves work and cost, quantity of work, relevant work center will be maintained in the activity. If task is related to service provider, service activity will be maintained and relevant services from the model services can be copied. As per the sequence of the activities proper relationship will be maintained between the activities (FS,SS,FF,SF).

Sample Structure diagram with numbering is shown in Figure 4.1.1:

Sample Project Sample Project RE-010902 RE-010902

Desktop Study Desktop Study RE-010902-01 RE-010902-01

Reconnaissance Reconnaissance Study Study RE-010902-02 RE-010902-02

Pre-Feasibility Pre-Feasibility Study Study RE-010902-03 RE-010902-03

Feasibility Study Feasibility Study RE-010902-04 RE-010902-04

DPR DPR RE-010902-04 RE-010902-04

EIA Study EIA Study RE-010902-04-01 RE-010902-04-01

SIA Study SIA Study RE-010902-04-02 RE-010902-04-02

Figure 4.1.1: Sample structure Project

1.25.4

Standard Project:

Project management requires numerous activities involved to be planned, controlled and monitored precisely, systematically, and efficiently. Successful project management requires structural identification of all processes that are necessary to and depict them in a structural and process-oriented way. A clearly structured project and precisely described project goals build the basis for successful planning, monitoring, and control of projects. Although each project is unique, most efforts undertaken by a single organization follow a similar structure or a finite set of similar structures. SAP Project System module provides the standard structures or template, which simplify the process of creating and planning various projects. Standard projects and networks are defined to facilitate the creation of simulation project versions and operative projects. These templates speed up the creation process and default as much data as is practical. The templates are set up to mirror, as closely as possible, the most commonly used project structures. When the time comes to create new projects in the system, these templates are copied to create simulated project versions or operative projects.

With respect to DGPC/DHI For each project type, project team will identify different work units and tasks. Work units will be created as work breakdown structure of the project using standard Work Breakdown Structure. Minor tasks of each work units will be created as activities by assigning relevant WBS element using Standard Network structure. For each activity estimated duration can be entered. Each task will be linked with each other using relationships.

1.25.5

Simulation Version:

It is recommended that simulation versions are used for what-if analysis. The simulation version is useful to simulate and save changes to a project, without affecting the operative project. Simulation versions can be changed, cost estimated and scheduled. With the default projects as a starting point, the details of the actual project plan are added to arrive at estimated costs, scheduling and resource requirements and generate sales documents. The operative project is then used as the controlling object during the execution phase to capture actual costs and manage the project resources and schedule. However, the following functions are not available in project simulation versions: Manual planning of costs, revenues and payments in WBS elements: If an operative project is transferred to a simulation version, the planned values are transferred to the WBS elements. However the planned values cannot be changed directly in the simulation version. Integration with PP / MM Material requirements planning Status Management The processes to create simulation version in DGPC and DHI would be as follows: Before initiating project, project team will create different simulation versions to see capacity availability and economical feasibility with different alternatives. Simulation versions may be created with different combinations of internal resources and external resources. Activities can be shifted from one period to another period to see impact of project cost and resource availability. Each task of project duration can be reduced or increased to see whether project can be finished within the specified timelines. Project team can compare project cost using simulation versions.

Project team submits best version as proposed project plan to Competent Authority for approval. After getting approval from the Competent Authority, project team shall copy relevant simulation version as operative project.

1.25.6 Project Versions: A project version shows the state of the project at a certain point time or at a certain status. Project versions are the basis for statistical evaluations, to document (as a history) the state of the project in the past and also can be used for comparison purposes. Many numbers of project versions can be created depending upon the requirement. There are two types of project Versions i.e., Time-dependent and Status-dependent. In case of time-dependent project version, project version can be created manually at a particular point of time and can be done in the WBS, network, or information system. In case of status-dependent project version, whenever there is change in system or user status, the system automatically creates a project. The user or system status has to be defined in order to trigger creation of project versions while configuration. It is proposed to use Time dependent project versions in DGPC/DHI to create manually the project versions at the end of every month as part of month end closing activities. 1.25.7 Project Status: Since the project is not a static object and has its own life cycle that begins when it is created and continues till completion. During this period of life cycle, various business transactions which take place change the project; for instance planning tasks, posting costs and changing dates. The current status of a project determines the type of business transactions executed within the system. The status management in Project System differentiates system status and user status. System Statuses: Following are the System statuses and briefly described as follows: Created (CRTD): It is the initial system status for new WBS elements created. In this status the project can be structured and dates, costs etc., can be planned. Actual costs cannot be posted . Released (REL): The released status can be set based on project approval. Actual costs can be posted in this status after assigning costs/budget to WBS elements. Technically Completed (TECO): This status is set for WBS elements which are completed from a technical point of view; but still expects costs to accrue from the commitments (purchase order) already made. Closed (CLSD): Closed status is set for a work breakdown structure or WBS element which has been completed from both logistic and an accounting point of view. Locked (LKD): Locked status is set to lock for individual business transactions or all the data in a work breakdown structure or WBS element. User status: The user status is linked to the authorization whereby certain people are authorized to create or change the status. The process involved in Hydropower projects and Infrastructure is attached as an annexure 4. 1.25.8 S.no. 1 Key Integration Touch Points: Module FI Description Values as defined in the Financial accounting module on the Remarks

CO

MM

organisation units such as Company Code and GL account, which are populated while creating the project, based on the project profile selected. Since, WBS element is also used as a cost collector object; all the actual costs booked against a project are cumulated in the project in addition to the appropriate GL account in FI. An organization unit value such as controlling area is defaulted by the system at the time of project creation. In addition, cost elements are used for planning of costs against the WBS elements. Purchase organization and plant are the two organizational units from MM which get defaulted in project during project creation.

Process Diagram:

Figure 4.2: Flow chart for Project initiation.

Figure 4.3: Flow chart for Project structure building.

Figure 4.4: Flow chart for project template processing. 1.25.9 Description of Improvements: S.NO. 1 3 4 5 6 7 8 9 10 DESCRIPTION OF IMPROVEMENT Project structure can be used for both large scale and small scale projects based on project management needs. Structuring the project hierarchically will give clear representation of the jobs to be performed. At any time project details can be captured by using project versions. Project versions can be compared with operative project. Any documents related to the project can be attached to the project using DMS. Status of the project controls business transactions Status of the project life cycle is updated to project using system status Standard templates for the WBS structure and networks can be created and used across the projects. This reduces the time taken to create the project from the scratch. Simulation versions can be analyzed and compared with each other for what if scenario using information system. Project can be differentiated as per the project type; Management can have Management Information System reporting based on project type.

1.25.10 Process controls: S.NO. 1 2 2 3 4 Control process Create Appropriation request by assigning project proposal and change status for approval. Based on the delegation of power the approval workflow will be triggered. Appropriation Request will be approved or rejected by authorized person(s). Project structure will be created and assigned to IM program Structure. Creating, maintaining and updating of a specific project would be exclusively done by the person(s) authorised for the project only. Access Control List (ACL) will be activated for this purpose for all the projects.

1.25.11 Description of Functional Deficits /Gaps: Not Applicable 1.25.12 Approaches to Covering of Functional Deficits /Gaps: Not Applicable

1.26

Date Planning

DGPC/DHI executes various types of projects which include work packages and tasks. The concerned person responsible for the work package needs to plan dates. Considering the various interlinked activities among the different work packages, overall scheduling of activities need to be carried out. The dates are recorded on the schedule which is prepared in spread sheet.

Table 4.2.1: Link of FSBP S. No. Major Process Sub Process Minor Process CSBP No. FSBP No. DGPS01 1 Project Planning Manual Scheduling Automatic DGPS02 DGPS03 DHI01 1.26.1 1.26.2 Master Data: WBS element Network activities Solution in SAP:

Once the project is structured, the planning has to be done. Planning essentially covers cost planning, time planning, material planning and manpower planning for the project. Date Planning and Scheduling: In Project System, there are several options for planning and managing dates and schedules (system updates automatically the earliest start date and end date of all activities depending on backward / forward scheduling). Forward scheduling is used when we know the start date of the first activity and the duration of the project, to arrive at the end date of the project; whereas backward scheduling is used when we know the end date of the final activity and the duration of the project and desire to arrive at the start date of the first activity. During scheduling, system uses normal duration of internally processed and general cost activities, whereas for externally processed and services activities the system uses the number of planned delivery days. The type of date used for planning and scheduling can be decided based on the project requirements. System also calculates required dates of planned material with reference to activity start date. Various types of dates are used in projects and the same are described here below: Basic and Forecast Dates: Basic dates are the dates that have a binding character for time scheduling. Forecast dates are the dates that are expected based on more detailed planning or on changes that will occur during the course of the project. Scheduled Dates: Scheduled dates for networks (for both the internal and external activity) are the start and finish dates of activities calculated by the system on scheduling based on the duration (days / Hours) and relationship that have been entered. Actual dates: Actual dates provide the information on the state of the project. Actual dates are entered in the system manually through confirmations of various activities.

SAP PS supports four types of relationships between activities, viz: 1. Finish to Start (FS) 2. Finish to Finish (FF) 3. Start to Finish (SF) 4. Start to Start (SS) With leads and lags, the system also supports the constraint. SAP PS supports Critical Path Method (CPM) for project scheduling and calculates free float and total float. There are various ways of carrying out project structuring, planning and scheduling in SAP PS system using project builder, project planning board and structure planning. For example, project Gantt chart could be viewed through project planning board. Project Planning Board: The project planning board enables to process the entire project structure such as WBS elements, activities, and the different objects assigned to them; in an integrated environment. The project planning board is based on an interactive SAP Gantt chart. The Gantt chart comprises a table and diagram area, and shows not only the hierarchical structure of the project but also the corresponding situation with regard to dates. In projects without networks, dates can be planned manually for the WBS elements (basic dates). The project planning board can be used to plan basic dates for the WBS elements simply by dragging the mouse. Structure planning function can be used to plan these dates in the form of a table. Basic dates can be extrapolated from lower to higher-level WBS elements or, conversely, can be inherited from higher to lower-level WBS elements. The consistency of scheduling data can be checked within the WBS structure. In the execution phase, the actual dates can be entered by dragging mouse. In the project planning board or the information system, the actual dates can be compared with the planned basic dates. Critical Path: The differences between the earliest and latest dates of an activity are referred as floats. If these are less than or equal to zero, then the activity is defined as a critical activity. Critical activities define the critical path of the project. With respect to DGPC/DHI: It is recommended to use bottom-up planning method for the scheduled dates at the WBS element level from the network activities, to arrive at the project end date. Hydropower Project: Before initiating each phase, forward scheduling will be carried out. 1.26.3 Key Integration Touch Points: S.no. 1 2 Module MM PS Description System calculates requirement dates components System determines capacity requirements Remarks for

Process Diagram:

Figure 4.2.1 Flow Chart for Date Planning and Scheduling 1.26.4 S.No. 1 2 3 4 5 6 Description of Improvements: Improvements Provision to enter dates manually for WBS/ activity Fully integrated management system ensuring project is being executed efficiently on time Constrains can be maintained for specific activities Critical path determination by system Entire project schedule can be monitored using Gantt chart, critical paths and floats. No third party software is required System checks hierarchical consistency of time scheduling within the project structure automatically Process controls: Control process Once project structure is created, execute scheduling. Creating, maintaining and updating of project planned data for a specific project would be exclusively done by the person(s) authorised for the project only.

1.26.5 S.NO. 1 2

1.26.6 Description of Functional Deficits /Gaps

None
1.26.7 Approaches to Covering of Functional Deficits /Gaps:

None

1.27

Planning of Resources and Material

DGPC & DHI executes various types of Projects like new installation and capacity enhancement etc. Across all DGPC /DHI Units, most of the project activities are performed using external resources. The internal resource utilization is limited to maintenance or general functions. Based on basic engineering and detail engineering, the required material specifications and quantities are identified. Purchase requisitions for materials and services are sent to purchasing dept. manually. DGPC & DHI needs to have external resource planning for the project activities and generation of procurement requirements. DGPC &DHI makes use of materials which are directly procured for specific project and also consumes from general stock from stores as well. Table 4.31: Link of FSBP

S. No. 1 2

Major Process Project Planning Project Planning

Sub Process

Minor Process

CSBP No. FSBP No.


DGPS01 DGPS02 DGPS03 DHI01

Resource Planning Material Planning

Resource Planning Material Planning

1.27.1 1.27.2

Master Data: WBS element Network Activity Material Master Service Master Work Centre Solution in SAP:

Resources: The purpose of resource planning is to determine the resources usage to perform the activities planned in the project structure. When DGPC/DHI wants to track internal resources, internal processed activity will be used. Service activities are used if services are procured from the external agency. The resources in Project System are as follows: Internal Processing: Internal processed activity contains a work center at which the work is to be carried out. It contains the working time and the duration of the activity. The assignment of the work center to a cost center provides an activity type and a rate so that planned costs can be calculated for the activity. DGPC/DHI project team will have to create internal processed activities to plan the resources required for the work that is carried out internally in a project. Relevant work center has to be assigned to the internal processed activity.

The activity type is determined from the work centre. This is essential for the calculation of the cost for an activity. During scheduling, the system determines the capacity requirements for the project. The objective of capacity planning is to provide a final schedule by considering the capacity requirements of the facilities and work centers as well as the time structure of the processes. Often, capacity supply does not match capacity demand. Project team will compare the capacity requirements for the projects using project planning board for the work centers assigned to internal activities. These work centers appear as bars on time axis. Red sections of these bars indicate overload within a specified period. Project team will level the capacities by changing the work centre or rescheduling the activity to a period when capacity is available.

Work Centre: Work Centers represents a group of people with the same skill set which belong to the same cost center. Individuals assigned to a cost center are linked to a corresponding Work Center so that accurate rates can be determined for labour cost planning purposes. A work center is the place where an activity is carried out or work output is produced. System can determine capacity requirements when work center is assigned to activity. Work centers contain data for costing activities. Work centers also contain the scheduling and capacity data required for scheduling and capacity planning. System calculates capacity for work centre using number of Individual capacity, work hours per day and utilization of percentage. Employee records from HCM module are linked to the respective work centers which in turn are assigned to the activities in the projects.

Workforce Planning: In the project, the most important resource considered is the project staff. Using workforce Planning DGPC/DHI project team will distribute the work from network activities to project staff using project view. Resource planning at activity level of the project is possible in SAP when employee records are maintained through HCM module. In the system, employee data will be maintained as info types using HCM module. Using info types 0001, 002 and 007 organizational assignments, personal data and planned working time will be maintained respectively. This info types are important for workforce planning. When the activities are confirmed during the project execution phase, capacity requirements are consumed and actual dates are entered and actual costs are updated.

External Processing: Externally-processed activities are used for procuring activities or services that are not procured or available within the company. Purchase requisitions are generated for externally procured activities. Service activities: Service activities are also used to procure services externally. Unlike externallyprocessed activities, this activity type enables to define service specifications and value limits for

unplanned services rendered by the service provider. Service processing which includes entry and acceptance of services performed) is also carried out by the Purchasing Department. Service procurement is mapped in networks by means of external processing and service activities. When an external processing activity is created, a purchase requisition is also created that is processed further in Purchasing. Data from Purchasing Department can be used for external processing (a purchasing info record, for example, that contains prices and delivery times for external processing). A service activity triggers a similar purchasing process, but it contains a hierarchy of planned services to be purchased, and value limits for unplanned services. The goods receipt for services involves two steps: entering the service and accepting the service.

Material: The purpose of material planning is to determine the materials required in a project by means of networks. This component is also used to monitor the material requirements and costs in projects, to control the flow of materials and for scheduling. During project planning DGPC/DHI project team, will assign components to activities that are required to execute the work. Material number, Item category, Quantity, Purchasing organization and Purchase group are entered. Item Category: If planned material is stock item, item category as L is assigned and item category as N is assigned for non stock item. When the activity is released, a PR and a reservation will be generated for the material. Requirement for Non stock item: If the allocated material is identified as a non-stock item, the system generates a purchase requisition for the material. This document authorizes the Purchasing Department to procure the required quantity of in a specified date. Material stock management: Material components in networks can be managed in different stocks. The following different types of stock can be used, for current scenarios: Plant stock: This material is managed in general stock. It is not assigned to any particular project object. Project Stock: The projects can have their own stock. The individual stock segments are assigned to WBS elements. 1.27.3 S.no. 1 2 3 Key Integration Touch Points: Module MM MM HCM Description Material Master and Service Master are used to assign for activities as per project requirement and purchase requisitions generated from project. Purchase Requisitions are generated for External processing activities, Services activities and components. Employee records are linked to the respective work centers which in turn are assigned to the activities in the projects. Employees planned time and actual time spent could be entered for monitoring and tracking purpose. Also, availability of the resources could be tracked and analyzed. Activity Types are assigned to work centre. When work centre assigned to activities resource cost will be updated to project with respect to activity type price

CO

Process Diagram:

Figure 4.3.1: Flow chart for Planning of Resources and Material

1.27.4 S.NO. 1 2 3

Description of Improvements: Description of improvements Purchase requisitions for planned material and services can be automatically generated. Purchase Department will decide procurement of material based on availability of stock at Plant. Material procured for project will be stored as project stock and consumption will be tracked. PS offers all the capabilities of MS Project but is fully integrated with the Finance, Purchasing Department, and Human Resource Department.

1.27.5 Process controls: S.NO. 1 2 3 Control process If work is planned to execute by internal employees, internal processed activity will be created. If work is planned to be outsourced, service activities will be created. If material is required for the execution of activity, material will be planned for that activity.

1.27.6 Description of Functional Deficits /Gaps:

None

1.27.7 Approaches to Covering of Functional Deficits /Gaps:

None

1.28 Planning of Cost DGPC/ DHI execute various types of projects like new installation and capacity enhancement etc. The project team identifies new project and estimates cost and duration. Based on the project specific work packages, equipment and activities, the cost is estimated. Previous project experiences, new/ revised prices, estimated prices etc., are used in the preparation of cost estimate. Based on various options with respect to design and technology, the estimates may vary. The estimated cost will be submitted to Competent Authority as budget proposal. Table 4.4.1: Link of FSBP CSBP No. S. No. Major Process Sub Process Minor Process FSBP No. DGPS01 Cost planning Manual cost planning DGPS02 DGPS03 2 Project Planning Cost planning Automatic cost planning DHI01

Project Planning

1.28.1

Purpose:

To have a functional basis where process planning, cost planning, scheduling or costing, as well as project control can be done. 1.28.2 1.28.3 Master Data: Work Breakdown Structure Network Material Master Service master Solution in SAP:

Cost planning has different aims at different stages of the project and is elaborated as follows: During the conceptual and rough planning stage, cost planning acts as the base for an initial cost estimate. At the approval stage, it forms the basis for the budget allocation. During project execution, planned cost is used to monitor and control cost variances.

Cost planning deals with the costs that are expected to incur during the execution of the project. Network cost planning: DGPC/ DHI will carry out detailed cost planning at activity level for capturing the details of materials and services required to execute a project. Network cost planning includes automatic calculation of the planned cost from activities, activity elements and components. The quantity structure is

the basis for costing. It contains all network data needed for the calculation. It also includes costing sheet for the overheads. Cost of Internal Resources: Internal processed activity has to be maintained in order to plan the cost of internal resources. Work (hours), work center, activity type and duration of activity has to be maintained. The price of internal resources will be maintained using activity type. The system calculates the costs automatically on the basis of the existing price/quantity structure. External Resources Cost: Service activities have to be maintained in order to plan the cost of services to be procured from service provider. Using service activities, service specifications are maintained for various services provided by service provider. System calculates the planned cost using values maintained for service specifications. Material Cost: The material components are assigned to network activities in order to plan the cost of material component. System calculates planned cost of material with moving average price maintained for that material master. Travel expenses are planned using cost activity. Overheads: System calculates overheads automatically on the planned cost based on percentages maintained in the costing sheet. If details are not sufficient to carry out detailed cost planning, structure oriented planning (overall planning) can be carried out using WBS structure. Manual Cost planning Methods: Manual cost planning in the WBS involves four methods: Overall planning (structure-oriented planning) is the basic planning, where costs are entered for each WBS element. Figures are broken down by the fiscal year, if required. o o o o In this option, the individual WBS elements are planned in appropriate CO version. The costs are planned for the fiscal year. The costs are aggregated at higher WBS element level. In addition to planned values, the distributed, distributable, planned total, cumulative etc can be seen.

Project cost versions will be used to support multiple cost versions. Version 0 (zero) will be used as active version for the purpose of capturing the current planned and actual costs. Versions 1 to 5 will be used for capturing various other estimates of the costs throughout the project duration. System also supports copying of planned values from one version to another version.

1.28.4 S.No. 1 2 3 4

Key Integration Touch Points: Module CO CO CO MM Description Even though cost planning is carried out in PS module, it uses the CO functionality of cost element planning. CO versions are maintained for structure cost planning and easy cost planning. Cost element maintaining with respect to Activities and Components. Any material or service to be procured for a project need to be created as a master data in Material Master module.

Process Diagram:

Figure 4.4.1: Flow chart for Planning of Cost 1.28.5 Description of Improvements:

When detail cost planning is done using network activities, part of project is rescheduled, cost planning is shifted automatically. 1.28.6 S.NO. 1 2 3 Process controls: Control process Projects will be assigned to the relevant node of the hierarchy structure of DGPC/DHI. Estimated cost of assigned projects can be accumulated and viewed at individual and entire organization level. Creating, maintaining and updating of project planned data for a specific project would be exclusively done by the person(s) authorized for the project only. Description of Functional Deficits /Gaps:

1.28.7

None
1.28.8 Approaches to Covering of Functional Deficits /Gaps:

None

1.29 Budgeting Hydropower projects: After identifying the project, project team submits project proposal along with rough cost estimation for the project to DGPC Management/Board for approval. After getting approval from DGPC Management/Board, project team gets budget approval by submitting detailed cost estimate for desktop study. Desktop study will be initiated and expenditures are booked against Desktop study budget. Upon completion of Desktop study phase project team submits desktop study report to DGPC Management/Board/DoE. Upon approval of Desktop study report, Reconnaissance study will be initiated. Project team submits estimated cost for Reconnaissance study to DGPC Management/Board. Upon approval, project team will assign approved budget to Reconnaissance study. Similar process is followed for other phases of the project. Other projects of DGPC: DGPCs Board approves the budget for the proposed project. Cost estimate is the basis for budget. After budget allocation, monitoring is carried out manually by evaluating payments and other expenses . DHI projects: DHI management /Board approve the budget for the project proposals which have been justified. Cost estimate is the basis for Budget. Budget monitoring is carried out manually by evaluating payments and other expenses. Table 4.5.1: Link of FSBP

S. No. 1

Major Process Budgeting

Sub Process

Minor Process

CSBP No. FSBP No.


DGPS01 DGPS02 DGPS03 DHI01

Original Budget

Original Budget Supplement Transfer Returns

Budgeting

Budget updates

1.29.1 1.29.2 1.29.3

Purpose: To have control over actual cost incurred for the execution of Project. To have a system, where budget planning, analyzing, controlling and monitoring can be done. Master Data Work Breakdown structure Period / year Solution in SAP:

DGPC projects: Projects which are assigned to program structure of Investment Management, the planned cost of projects (Budget proposal) will be updated to program structure. This will be an estimation

of required funds. Details of cost planning will be submitted to Competent Authority for review and approval (offline activity). DGPC Management and Board will review and approve budget for projects. Person(s) delegated by DGPC Management will allocate budget to the program structure. This is approved budget of investment measure. Authorized person(s) will distribute budget further from program structure to projects as approved by the Competent Authority. Authorized project team member will distribute budget further to subordinate WBS elements of project, which is the original budget of project. Hydropower Projects: Before initiating each phase, detailed cost planning will be carried out by allocating resources like human resources, materials and equipment as per projects requirement and carry out scheduling. If tasks are to execute internally, internal processed activities are created for which materials and activity types will be assigned and system will calculate the planned cost. Otherwise the tasks or works to be outsourced to external agency will be created as service activity with technical specifications. System will calculate planned cost of service activities as per the cost mentioned against the BoQ/specifications of the services. Superior WBS element of the phase will be assigned to relevant node in the DGPC hierarchy structure of Investment Module. Planned cost of that phase will roll up to hierarchy structure, where DGPC Management can review planned cost of that phase. The planned cost will be submitted, in paper, to Competent Authority for approval. Competent Authority will review the estimated cost. Upon approval from DGPC Management it will be further submitted to Board to take decision on budget. Person(s) delegated by DGPC Management will allocate budget to the program structure. This is approved budget of investment measure. Authorized person(s) will distribute budget further from program structure to phase (WBS element) of project as approved by the Competent Authority. Authorized project team member will distribute budget further to subordinate WBS elements of project, which is the original budget of project. If additional budget is required, project team will submit additional budget request to DGPC Management and subsequently to Board. Upon approval, the person delegated by DGPC Management will allocate additional budget to relevant program node in IM which will be further assigned to relevant phase of project which will allow continuation of work.

DHI projects: Projects which are assigned to program structure of Investment Management, the planned cost of projects (Budget proposal) will be updated to program structure. It is an estimation of required funds. Details of cost planning will be submitted to the Competent Authority for review and approval (offline activity). DHI management will review and take decision on budget for projects. Person delegated by DHI management will allocate budget to program structure and then program structure. This is called approved budget of investment measure. Authorized person will distribute budget further from program structure to projects as approved by the Competent Authority. Authorized project team member will distribute budget further to subordinate WBS elements of project. This is called original budget of project.

Figure 4.5.1: Sample Hierarchy Program Structure of DGPC with Projects

Availability Control Tolerances: System enables to monitor and control project costs using availability control. It enables project team to control costs actively by issuing warnings and error messages when costs are incurred. Availability control checks the current distributable budget (or release) against the assigned value. 1. If the actual value reaches 80% of the Budget System should give warning message 2. If the actual value reaches 90% of the Budget System should give warning message along with email to person responsible 3. If the actual value reaches 100% of the Budget System should give error message The current distributable budget forms the basis for availability control. The system checks automatically the availability of budget while creating PR / PO and if there are any actual cost booking as per the tolerances, i.e., if budget reaches 80%, the system will give warning message and after reaching 100%, the system gives error message and automatically stops generating business transactions. Unforeseen events, additions to the planned, increase in vendor price, etc., may make budget updates necessary. Normally this budget update requirement comes up as a result of availability check. Budget Updates: When there is requirement of extra budget, project team submits proposal to the Competent Authority. Upon approval of extra budget from the Competent Authority, supplement budget

will be assigned at program position and then it will be supplemented to the project by the authorized person(s). If project has more funds than it is required, the excess funds can be returned. Return of excess fund in the project is made from the bottom-up (from a lower-level WBS element to the next one up). Project team can only return budget that is distributable or available. Year End closing activities: Commitments: Project team will use commitment carry forward function to transfer commitment values that are still open into the first period of the next fiscal year. Budget: Project team will use budget carry forward function to transfer any funds not used in the previous fiscal year to the budget of the new fiscal year after Managements decision. Key Integration Touch Points: Module MM FI/CO Description Budget availability control for commitments of PR, PO and actual cost of GR, GI Budget availability control while posting any miscellaneous cost postings Remarks

1.29.4 S.no. 1 2

Process Diagram:

Figure 4.5.2: Flow chart for Project Budget

1.29.5

Improvements The availability control at each WBS element level will help the user to prevent excessive commitment. Effective monitoring of planned cost versus Budget is possible. Once certain amount of budget values is utilized, an alert will be triggered to the responsible person indicating the utilization of budget. Hence the necessary action can be taken. Process controls: Control process Person delegated by Competent Authority will allocate budget to program structure and then to assigned WBS elements of projects as decided by Management/Board. Authorized project team member will distribute budget further to reaming WBS elements.

1.29.6 S.NO. 1

1.29.7 Description of Functional Deficits /Gaps: None 1.29.8 Approaches to Covering of Functional Deficits /Gaps:

None

1.30

Procurement Purpose:

1.30.1

Project specific procurement is one of the major activities of DGPC/ DHI Project management. Detailed procurement processes including single tender, limited tender and open tender etc, are explained in the Material Management (MM) module. Table 4.6.1: Link of FSBP S. No. Major Process Sub Process Minor Process Purchase Requisition Purchase Order Goods Receipt Goods Issue Invoice Posting Purchase Requisition Purchase Order Service Entry Invoice Posting CSBP No. FSBP No. DGPS01 DGPS02 DGPS03 DHI01

Procurement

Material

Procurement

Services

1.30.2 1.30.3

Master Data: Material Master Vendor Master Service Master Purchasing Info Record Solution in SAP:

Project Procurement covers procurement of goods and services (including works) for a project. Material and services can be initiated, procured and tracked throughout the project cycle. . A reservation is generated for the material if it is identified as stock item. A reservation is an internal document that defines the requirements of a material and reserves a specified quantity for the network activity. A purchase requisition is an internal document that defines the requirements of a material or a service. As soon as the activity is released, the system generates a purchase requisition for the material. Purchase requisition will be created and the value of PR will be created as internal commitments for the project. System will check the availability of the budget with committed value. Technical Evaluation: Technical and commercial evaluation is done by the evaluation team. The technical evaluation contains comparison of technical features and recommendation. Purchase Order: Purchase order will be created by the Purchasing Department. Based on technical and financial evaluation, purchase order will be issued to qualified vendor. When the purchase requisition is converted as purchase order, external commitments will be created and internal commitments are reduced by the value of purchase requisitions. System will check the availability of the budget with committed value.

Goods Receipt: The project specific stock is traceable specific to the project object. Goods are received with reference to purchase order and stored as project stock. Goods receipt reduces the external commitment by the amount of purchase order. Goods Issue: When the material is issued for execution of project activity, the project stock reduces and the actual costs are debited to the corresponding activity. Services: Generation of Purchase Requisitions: Service activity contain service specification containing planned activities and value with limits for unplanned activities. The purchase requisitions for the services are generated by creation of appropriate activities. Service activities give rise to the planned cost of the project.

Techno-commercial evaluations: Service provider is finalized for the specific work/ services package based on technical and financial evaluations and its approval by the Competent Authority. Issue letter of Intent to successful service provider. Service PO is issued. Based on this work execution is initiated.

Service acceptance: Service entry and service acceptance will be done by project team and will enter the record of measurement in measurement book. Service entry sheet acceptance will post the actual cost into the service activity. Managing Stocks of Material Components: Material components in networks can be managed in different stocks. Depending on the network and the settings entered in the material master, you can use the following different types of stock: Plant stock: This material is managed in general stock. It is not assigned to any particular sales order or project. Project Stock: Project can have its own stock and is viewed from material requirement planning. The individual stock segments are assigned to WBS elements. Materials that are needed to carry out the project are managed as project stock. Each WBS element in a project definition has a separate individual stock segment. Each stock segment is permanently assigned to a WBS element and, from a MRP view, is only available for this WBS element. Unlike general stock, the relevant WBS element must be entered, as well as the plant and storage location, when entering goods movement. Project stock can be valuated or non-valuated. Valuated Project stock: Every material in project stock is managed both in a quantity basis and a value basis. The monetary value of each quantity of material is calculated separately. All goods movements for the project stock trigger corresponding postings in the stock accounts in Financial Accounting.

Non-valuated project stock: Project stock, where each material is managed in terms of cost on a quantity basis only. Goods movements to individual stock are not valuated and do not give rise to postings in Financial Accounting. In general, the value of the project stock is calculated in total at the period end by results analysis and the values are then transferred to Financial Accounting.

Project-oriented procurement deals with monitoring the project relevant requirements with specific tools and reporting functionalities. ProMan: ProMan is an integrated tool that enables to process all information from the procurement process about project objects, and execute individual procurement functions. The access is given to data from the Project System, Purchasing, Material Requirements Planning, Production, and Inventory Management. All objects and documents in the Project System are taken into account both planned, and unplanned objects, and documents that have been created manually. Individual steps in the procurement process, such as creating reservations, purchase requisitions, and purchase orders or entering deliveries from projects, goods issues, or balance sheet transfers can be carried out directly in ProMan. 1.30.4 Key Integration Touch Points: S.no. 1 Module MM Description Project procurement is entirely integrated with Materials Management (MM). Material master is created in MM. Transactions such as purchase requisitions, purchase orders, goods receipt and so on, are carried out in MM module while referring to a WBS element in each of these transactions to establish the relationship between the material and the project.

Process Diagram:

Figure 4.6.1: Flow chart for Project Procurement 1.30.5 Description of Improvements:

All the procurements of the materials and services for the project can be monitored and tracked 1.30.6 S.NO. 1 2 3 4 5 6 Process Controls: Control process Reservation will be generated automatically when material is planned for activities and Purchase Requisition will be created automatically upon releasing the project. System creates purchase requisition automatically for consultancy services/works upon releasing the project. System will check budget availability with purchase requisition commitments. Purchase Order will be created with reference to Purchase Requisition. Project Stock will be updated upon Goods Receipt. Goods are issued against the reservation number.

Consultancy services/works are recorded using service entry sheet in the system with the values of measurement book.

1.30.7 None 1.30.8

Description of Functional Deficits /Gaps:

Approaches to Covering of Functional Deficits /Gaps:

None

1.31 Project Execution 1.31.1 Purpose:

The project team or an external agency will carry out the design and detail engineering activities. The work execution will again be carried out either by project team or by external agency for which site supervision will be done by the project team. The activities where material procurement is required are carried out by the purchasing dept. in consultation with project team. The actual measurements are taken and recorded in the measurement book during the supervision. The deviations are also recorded. Progress of sites activities are reviewed periodically and issues are resolved if any. DGPC/ DHI needs comprehensive tool to record and consolidate the project activities relevant information. Table 4.7.1: Link of FSBP S. No. 1 2 3 Major Process Project execution Project execution Project execution Sub Process Material procurement Service procurement Activity confirmation Minor Process Material procurement Services Internal activity CSBP No. FSBP No. DGPS01 DGPS02 DGPS03 DHI01

1.31.2 1.31.3

Master Data: WBS element Network activities Solution in SAP:

During the phase of project execution, DGPC/ DHI project team has to update the project status on a regular basis, by confirming the activities. In order to execute the project, the project has to be released. It means before giving confirmations to an operative project, the status of the project should be changed to REL (Release). Release process in SAP indicates the change of project status. When an operative project is created, all WBS elements will have CRTD status. When the status of the project is changed from CRTD (Created) to REL (Release), the assigned WBS will also get released subsequently. The confirmation or cost booking is possible only if project status is in released (REL) status. Internal Activity Confirmation: Confirmations can be done only once the project and associated WBS elements have been released. Precise confirmations are required for realistic and accurate project planning. The Human Resource module contains a Cross Application Time Sheet (CATS) and is preferred method for time recording for internal employees and approval. The project team will enter their confirmations using CATS (Cross Application Time Sheet). Project Manager or responsible person will have the authorization to approve or reject time entries.

The actual time worked on the project will be posted against the network activity. The time confirmation would be transferred from CATS to CO and PS. Confirmations of an activity leads to an activity allocation which leads to actual cost credit, the cost centre assigned to the work centre, and debit network activities. If any activity is done which is not a part of project plan and which involves cost, the same will be created as an activity. The activities which are related to checklist can be confirmed by responsible person when it is completed. Once the activities are confirmed, the scheduling has to be carried out for the project. This will reschedule the project and therefore, delays can be determined.

Acceptance of Services: The service entry is created and accepted for the works/services, based on measurements recorded in Measurement Book. The bills are processed in FI with reference to service entry document. Once the contractor submits the bill, the details will be entered in the system, which is known as Invoice Verification. The Invoice Verification will verify the amount and quantity as per Service Entry Sheet (Certification provided by project team). The vendor outstanding will be created after the creation of the invoice. The payment will be done against the vendor's invoice on monthly basis or milestone basis. DGPC/DHI project team initiates some registrations (Ex., FDI registration, CDM registration) as part of project execution which are created as separate WBS or activities and confirmed once process is completed.

Goods receipt and consumption: For non stock items, the goods receipt entry will post consumption of material to the project activity. For stock material, the goods receipt updates the project stock. Subsequently material is withdrawn for the project object for which it has been procured. Once the goods arrive, the goods are inspected and good receipt will be issued with reference to PO. The goods will be stored as project stock. As and when goods are required for the execution of the project activity, the goods will be issued for the relevant activity by the Purchasing Department upon request from project team.

Actual cost: Purchase requisition results in purchase requisition commitments for the project object. When the purchase requisition is converted to purchase order, it results in purchase order commitments. Actual costs will be posted upon issue of goods receipt and reduces the external commitment by the value of purchase order. Goods issue reduces project stock and actual costs are debited to the corresponding activity. Actual overheads are calculated based on the costing sheet entered in the WBS element, network activity. Overhead calculation process results overhead expenses which are charged to Network activities and WBS elements and it credits to cost centre. Revenues: The power will be generated during the trail run of hydropower projects. DGPC/DHPC sells this power to BPC or PTC of India. This revenue will be adjusted with project cost. For this, Invoice will be

raised through sales order for which account assignment is WBS element of the project. Once revenue is received, it will be booked to corresponding WBS element with reference to invoice. For the purpose of tracking progress and performance of the project, DGPC/DHI project team has proposed to use progress analysis method and Milestone trend analysis. Progress Analysis: Progress analysis is the tool to determine and compare planned and actual project progress values. This enables to identify cost and schedule variances and take appropriate action. The percentage of completion (POC) and earned value are important project key figures. These values are evaluated either at the level of individual project components or for the whole project/subproject as an aggregate figure.

Figure 4.7.1: Sample Graph for Progress Analysis Process for Progress Analysis of DGPC/DHI: Progress Analysis will be used by DGPC/DHI project team to know the current status of the project. Cost based progress analysis method would be used for calculating, analyzing costs and schedule variances. Percentage of completion (POC) will be calculated by the system based on planned and actual costs. Planned and Actual costs up to the end of the period or up to a key date are considered and divided by the overall planned cost of the project for calculating the Planned POC and Actual POC S-curve graphic report and progress report data can be obtained. Value Index (CPI), Schedule variance (SV), Costs Variance (CV), and Estimated Costs at Completion (EAC) values are calculated. Earned values (BCWP, BCWS) will be calculated. It is a prerequisite to have planned costs and actual costs in project for calculation of POC.

Milestone Trend Analysis (MTA) method:


MTA is a simple method for analyzing the dates in a project and compare them with planned data. MTA tracks the performance of the project progress based on how milestones are met as compared to planned schedule. DGPC/DHI will use it to recognize trends and deviations from the planned schedule promptly. The scheduled dates of the milestones, which are relevant for the course of the project, are compared at various points of time. Deviations from the planned schedule are made apparent. In the graphical form an MTA chart is used, which is triangular where the sides are the times axes. The milestone dates are

plotted against the report dates. This analysis provides important clue to the Management in identifying trends developing in the project and to take timely corrective actions. All milestones created for the project will be made relevant for MTA for this purpose. With respect to DGPC/DHI: If the internal employees are deployed for the project, the employee can enter work hours by specifying activities using CATS (Cross Application Time Sheet). Authorized person(s) from the project will approve work hours of the employee. Upon approval, cost and timelines of internal employee will be updated to the project.

During project execution, when PR and PO are created, the value of the PR and PO will be shown as commitments. Actual cost will be booked through different business transactions such as confirming activities, receipt of goods and service entry. Purchasing Department will process the procurement of services/works (through tendering process) with reference to the purchase requisition of services/works from project. Purchase order will be created upon selection of successful bidder. During execution of work, project team will monitor and record the quantity of work executed using measurement book. Work measured will be further entered in the service entry sheet in the system. When the Contractor/Consultant submits monthly bill, Purchasing Department will verify the bill using invoice verification and service entry sheet in the system. Every time the amount of work is entered in the service entry sheet, the actual cost will be posted automatically. Finance Department will make the payment. Work in the service entry sheet will be entered only after checking the quality.

When cost reaches 80% of the budget, the system will pop up a warning message. When cost reaches 90% of the budget, the system will trigger a mail to the responsible person of WBS element. If cost reaches 100% of budget, the system will throw an error and the remaining work cannot be carried out before allocating additional budget. Scanned copy of site inspection will be attached to relevant project object. The project information system is a tool with which project can be monitored and controlled. During project execution, following reports are useful to monitor and control the project. o o o o Plan/Actual dates, duration with variation report Plan/ actual cost and Budget reports Cost element reports Capacity analysis

o o o

Lists of reservations, purchase requisitions, purchase orders pertaining to the projects, ProMan Stock/requirements overview Progress analysis

After completion of each phase, project team will prepare report based on work carried out and will submit to Competent Authority/Board for approval. Subsequently, upon approval, report will be submitted to Department of Energy.

Relevant documents such as approvals, reports, drawings etc., will be attached to the relevant WBS element/activity for reference.

1.31.4 S.no. 1 2 3

Key Integration Touch Points: Module MM MM MM Description Commitment cost is updated when purchase requisitions are created When purchase requisitions are converted to purchase orders the system still shows the cost under commitment cost When goods are received against purchase order, the system reduces the commitment and increases the actual costs to the proportion of goods received out of the total number of orders Goods issue from stock also update cost on the project cost element to be used for material costs Inventory differences and other miscellaneous differences are also posted to the project under different cost elements Materials directly ordered for the project would update cost on the WBS element and the quantity received in the inventory report will not be seen Postings are made through miscellaneous cost postings where invoices is received for the services but there are no purchase orders involved Any other journal entries for adjustment are also posted to the project objects

4 5 6 7 8

MM MM MM FI FI

Process Diagram:

Figure 4.7.2: Flow chart for Project Execution

1.31.5

Description of Improvements:

1. Reduces the project lead time. 2. R/3 Standard reports are more suited for managerial reporting. 3. Controlling documents are generated automatically from financial expenditure postings. 4. Appropriate invoices are created and unplanned variances are documented. 5. The actual data generated is compared with the planned dates and costs. 1.31.6 S.NO. 1 2 Process Controls: Control process Activity confirmation, goods receipt, goods issue and actual cost booking will be possible project release. Budget should be released before executing project transactions.

3 4 5 6

System will check budget availability when transactions are related to commitments and actual cost. Internal employees work hours will be captured through Cross Application Time Sheet. Confirmations with respect to specific projects are to be done by a specified and authorized person(s) only. Even viewing the project structure and other data (dates, costs, etc) with respect to a project is to be restricted to a group of persons.

1.31.7

Functional Deficits /Gaps:

1. DGPC requires triggering mail one day ahead of earlier start date and finish date of specified activity to project team. 2. DGPC collects daily progress report pertaining to work execution and resource usage in terms of man power, material and equipment in a specified time for both internal processed activities and external processed activities. The daily progress report contains detailed information which is useful for claim settlement.

3. In order to ensure that work has been carried out as per specification, design and drawing, compliance certificate for work and post quality inspection is carried out. The site inspection parameters and records are planned to be captured with respect to project activity. 1.31.8 Approaches to Fill the Functional Deficits /Gaps:

1. The mail trigger ahead of one day for specified activity of earliest start date and finish date can be done through ABAP development. 2. Scanned copy of daily progress report will be attached to relevant project object. 3. Since SAP PS has no standard functionality to capture the quality parameters. Scanned copy of inspection report will be attached to relevant project object.

1.32 Period end Closing As per the standard rule of project, the cost needs to be settled before it is closed. This is derived from the basic concept that projects are dynamic and have a definite start and end. Therefore costs should finally be settled to some other business object. DGPC & DHI carries out various internal Projects: Capital Investment projects: Settlement to Capital WIP / Fixed Asset Expansions (Renovation and modernization): Settlement to Fixed Asset

Table 4.8.1: Link of FSBP

S. No. 1

Major Process Project Settlement Project Closure

Sub Process

Minor Process

CSBP No. FSBP No.


to DGPS01 DGPS02 DGPS03 DHI01

Settlement

Settlement CWIP/Asset Project Close

Project Closure

1.32.1 1.32.2

Master Data: Work Breakdown structure Network Activities AuC/Asset Cost centre Solution in SAP:

Project Settlement: Costs are collected in the project temporarily. They are settled to one or more receivers as part of period-end process. A settlement rule is required to perform settlement and contains distribution rules and settlement parameters for a sender object. Carry out Project Settlement: If the project is capital work, the top WBS element will have an Investment Profile, which causes creation of AuC (Asset under Construction) upon releasing the project. The initial settlement rule need not be maintained to the AuC. However if the whole cost of the project is not settled to the AuC and if a part of the costs need to settled to a cost center (as an expense), the project team is authorized to maintain the settlement rule accordingly. The settlement rule provides the valid period and the receiver information. Settlement profile provides the following receivers: Fixed Assets (FXA), Cost Center (CTR), General Ledger (G/L), Work Breakdown Structures (WBS). Costs posted at WBS Elements will be settled to the stipulated receivers as per the Settlement Rule on the corresponding WBS Elements.

The actual costs incurred in a commercial object are allocated wholly or in part to one or more receivers during the settlement. The debit posting assigned to the sender object (project) can be viewed even after settlement. The settled costs are updated to the respective receiver objects and displayed in the report. CAT: Following three categories of cost objects can be selected. CTR: If user wants to settle actual cost to the cost centre, select CTR FXA: If user wants to settle actual cost to the assets, select FXA WBS: If user wants to settle actual cost of the project object to the WBS element (ex: activity to WBS element), select WBS

Settlement Receiver: User has to enter settlement receiver for which actual cost has to be settled. If user selects CAT type as FXA, then specific asset has to be entered under settlement receiver field. If category is CTR, then the specific cost centre has to be mentioned for which the cost has to be settled. If project object is activity and user wants to settle cost to superior WBS element of activity, the settlement receiver has to be BS. To select cost receiver object, place the cursor in the cell of settlement receiver field and press F4 from the key board. The system will popup cost objects selection screen based on selection of the category you have selected in the CAT field. For example: if you select CAT as FXA, the system will popup asset selection screen. If you know details like company code/asset class and other details mentioned in the specified field of selection screen, then the system will filter and propose settlement receivers list. Then user can choose required settlement receiver from the list. By default the system will propose 100% but user can mention how much percentage of cost can be settled to the specified cost object. For example: Sometimes user may require to settle cost of project object to more than one cost object by specifying amount or percentage to each cost object. Settlement Type: User has to choose either PER (Periodic settlement) or FUL (Full settlement) based on process. Following Table is an example which shows settlement rules CAT FXA Settlement Receiver 400015-0 % 100 Settlement type AUC

The costs posted at WBS elements initially will be transferred to Asset under Construction (AuC) as a month end activity. The costs settled under AuC by the project team will be the input to the FI-Module for capitalizing these costs under assets. The same will be settled at the respective asset during the period end processing. It can be either settled at one or more assets depending on the number of assets that are declared out for a Project. Project completion report would be prepared by the project team and once the competent authority approves it, project closure can be done in the system by attaching all relevant documents to corresponding project. Project closure: The project closing will occur when the following conditions are met: Outstanding Purchase Orders are delivered and no more material and service deliveries are expected or kept in pending. All the unused materials of the project have to be identified. The unused project inventory has to be transferred to a specified storage location based on Managements decision. The unused budget has to be returned to top level WBS element and further return to IM program node. The final settlement has to be performed and all costs collected during the project life-cycle are capitalized or

expensed off. Any unused WBS elements during the project execution are deleted. Upon meeting all the project deliverables, the project status TECO (technically closed) will be assigned by the project team. This process stops any open purchase requisitions (not released for purchase order) and material reservations. It also cancels the remaining work for the time confirmations so the project is 100% complete from time perspective, while it can collect the outstanding invoices/journal vouchers from the open Purchased Orders. If all of the above conditions are met, then the Project team closes the project and will be done by setting the system status to CLSD (closed) at the project level. System status designation CLSD (Closed) provides integrated closing controls and can be undone or reversed. Note: No credit to be posted to WBS elements after settlement to fixed asset. Hence, the status of the whole project to be set as CLSD once the capitalization is carried out. 1.32.3 S.no. 1 Key Integration Touch Points: Module FI Description Actual cost will be transferred from project to AuC Remarks

Process Diagram:

Figure 4.8.1: Flowchart for Period end closing and Project Closure

1.32.4

Description of Improvements:

Better Periodic monitoring, evaluation of the project cost can be carried out. On settlement only the costs collected at network level can be sent to a cost center or higher level WBS element Process Controls: Control process AUC will be created upon releasing the project. Settlement transaction has to executed under period end closing activity. Before closing project unused materials are transferred from project stock to unrestricted Plant stock and remaining budget has to be returned to IM program structure. Before closing project, the final settlement has to performed and all costs collected during the project life-cycle to be capitalized. Once project is completed project status has to be changed to closed Settlement of project and project closure can be done by authorized users.

1.32.5 S.NO. 1 2 3 4 5 6

1.32.6

Description of Functional Deficits /Gaps:

None
1.32.7 Approaches to Covering of Functional Deficits /Gaps

None

INTERFACES
For PS Module implementations, following interfaces are envisaged: 1.33 Open PS: Purpose:

1.33.1

1) DGPC/DHI currently uses MS Projects to manage the project. To import or export project plan, it is required to integrate SAP PS with MS Projects. 2) Data exchange between two software should be two way and both reading and writing should be possible. 1.33.2 Process: 1) Open PS for Microsoft Project (OpenPS4MSP) which is an add-on program that allows exchange of data between SAP Project (PS) and Microsoft Project. 2) Data can be transferred from Microsoft Project to the Project System and from the Project System to Microsoft Project. If it is difficult to access the system to create structure while travelling, MS project can be used to create the structure and can be transferred to the Project System. It gives the freedom and flexibility to access individual parts of the Project System from external system and carry out important business transactions. 3) Following are the Pre-requisites for integrating MS Projects with SAP PS: Microsoft Windows ME, Windows 2000, or Windows XP Microsoft Project 2000 and above (Standard or Professional) Local installation of a SAP GUI standard installation, SAP ECC6 and above SAP ECC6 and above, or mySAP ERP

4) The Open Project System is an addition to the Project System. The software is not directly part of the SAP R/3 System and has to be installed separately. 5) If Open PS was installed successfully Microsoft Project appears with a new Open PS tool bar. Choose Connect to specify logon data and connect to SAP R/3 PS. If connected, choose Download or Upload to interface with SAP R/3 PS. The screen captured of the same is shown below in figures 1-3.

Figure 5.1: Microsoft Project 6) The SAP Open PS Settings dialog box allows making various settings (Figure X) for OpenPS4MSP, such as specifying the language of the Open PS4MSP interface and defining link types. To access the SAP Open PS Settings dialog box, choose Settings. One can carry out the following settings: 1) 2) 3) 4) 5) 6) Defining Time Units Defining Link Types Defining Control Keys Setting up Object Types Factory Calendar Map user fields

Figure 5.2: SAP Open PS Settings

7) The direction in which one transfers a project that exists in both Microsoft Project and the Project System determines whether a new project is created or whether an existing project is updated. 8) The Role SAP_PS_EPS needs to be added to the user to enable upload of projects. 9) One can restrict the upload of tasks from Microsoft Project to PS. Use the Retain in PS field to do this. Before carrying out the upload, set the Retain in PS field to yes for those tasks that are to be uploaded to PS. If this field is set to No for a particular task, then the task is not uploaded to PS. This enables to do detailed (lower-level) planning in Microsoft Project and also make higher-level data available in PS.

Figure 5.3: Open PS Dialog Box 10) Microsoft Project and the Project System do not contain the same objects. The project system can have two structures for planning projects, work breakdown structures and networks whereas Micro soft project can have only one structure and does not recognize work break down structure as independent objects. Summary Tasks are used in Microsoft Project to give projects a hierarchical structure but there are no networks. Owing to this difference, it is necessary to map project objects from one program to the other. 1.34 Primavera:

SAP PS can communicate effectively with other External Project Software (EPS). 1.34.1 Purpose:

DGPC monitors the High End Projects through Primavera. 1.34.2 Solution:

Following external third party software is available in the market to exchange data between Primavera and SAP PS. Pipeline Software Impress

LaborLogix Primavera Inspire

STANDARD INFORMATION SYSTEM


The Project Information System is flexible and comprehensive that can be used to monitor and control the project data of individual projects, partial projects, or multiple projects. The system includes overview reports and reports offering various degrees of detail. The Project Information System is designed to meet the needs of both project management and ordinary project personnel. Report evaluation includes a wide range of functions. For example, one can branch off to other reports for more detailed information, send reports via Mail, or print them. The standard also includes reports offering different degrees of detail, summarizations, and views of current data, version data, and archive data for: Structures Controlling Resources Material Depending on the objects, functions, procedures and scenarios used, a wide range of data is generated while the project is being executed. The central function of the Project Information System is to evaluate and represent this data to various levels of detail. The Project System includes the following information systems in order to fulfill these requirements: Dates/deadlines: Structure Information System Capacities: Resource Information System Budget, costs, revenues, payments: Controlling Information System Cost Reports: S_ALR_87013542 - Actual/Commt/Total/Plan in CO Area Currency S_ALR_87013543 - Actual/Plan/Variance Absolute/Variance % S_ALR_87013544 - Actual/Plan Comparison: Periods S_ALR_87013537 - Commitment Detail S_ALR_87013533 - Plan/Actual/Commitment/Rem. Plan/Assigned CJI3 - Display Actual Cost Line Item CJI5- Display Commitment items Line item

Budget Reports: S_ALR_87013557 - Budget/Actual/Variance S_ALR_87013558 - Budget/Actual/Commitment/Rem Plan/Assigned S_ALR_87013559 - Budget/Distributed/Plan/Distributed S_ALR_87013560 - Budget updates Structure Overview Reports: CN41/CN41N - Structure Overview CN42/CN42N - Project Definitions CN43/CN43N - WBS Elements CN46/CN46N Networks CN47/CN47N Activities Material/Service Reports: ME5J Lists the Purchase requisitions ME2J - Lists the Purchase Orders CN52N Material Component Overview MBBS - Valuated Project stock MMBE - Stock Overview MB25 - List of Reservations ME2S - Service PO overview CNMM - Project Oriented Procurement CATS_DA Working time Confirmation Reports: CN48N - Confirmations Overview CJI3 - Display Actual Cost Line Item Claim Report: CLM10 Claim Overview CLM11- Claim Hierarchy Milestone Trend Analysis:

CNMT Milestone Trend Analysis Period-End Processing Reports: S_ALR_87011963 Asset Balance by asset number S_ALR_87011964 Asset balance by Asset class AW01N - Asset Explorer

ANNEXURES
1.35 Annexure 1 Key Data Structure

Claim Notification Type:


S No 1 2 Claim Notification type D1 D2 Description DGPC Deviation claim DHI Deviation claim Internal Number range From 100000000 To 199999999 From 200000000 To 299999999

Project Type:

No.: 1 2 3 4 5 6 7 8 9

Project type description Joint venture Own undertaking Grant Domestic JV FDI project DHI owned Project PPP (Public Private Partnership) DPP (DHI Private Partnership) Others

DHI Responsible person:


S No 1 2 3 4 5 6 7 8 9 10 11 12 Resp. Person Number 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Name of the Person Karma Yonten Damber S. Kharka Kinga Tshering Thuji Yonten Passang Dorji Kinzang Tobgay Sonam Rinchen Om Bhandari Sonam Lhundrup Jigme Thinley Choni Ome Phuntsho Namgay Area CEO, DHI ED,DHI PD, Education City Sr. Analyst, FID Sr. Analyst, FID Sr. Analyst, FID Sr. Analyst, CPD Sr. Analyst, CPD Legal Counsel and CS Asst. Analyst, FID Asst. Analyst, FID Asst. Analyst, FID

13 14 15 16

2012 2013 2014 2015

Deki Phuntsho Jigme Tshering Singye Lhamu Ugyen Wangdi

Asst. Analyst, CPD Asst. Analyst, CPD Asst. Analyst, CPD Asst. Analyst

Key Data: 1) Progress version 100

2) Statistical key figures: 010 - POC, non-aggregated, 020-POC, aggregated, 030-Percent.of complete.
res.anlys 1.36 Annexure 2 Business Process Master List

2_BPML_PS_0.8.xls

1.37

Annexure 3 Consolidate FRICE Objects

2_BP_PS_Gaps_0.8. xlsx

1.38

Annexure 4 Business Processes

Hydropower project.doc

Infrastructure.docx