Integrating Primavera-SAP Inland Empire Utilities

Integrating Primavera and SAP at the Inland Empire Utilities AgencyStacey D. Scott and John R. Knoke, P.E.

2 Integrating Primavera and SAP at the Inland Empire Utilities Agency

Integrating Primavera and SAP at the Inland Empire Utilities Agency

• Introduction

• Background

• Initial State

• Business Blueprint

• Desired State

• Realization

• Results

• Questions?


Introduction

• Stacey D. Scott, MBA, BA

– 10 years experience with financial data and information management, in banking, manufacturing, and academia

– Six Sigma Black Belt

• John R. Knoke, PE, MBA, BSIE

– 35+ years experience in construction and project management, project controls, and project information systems development

– Primavera systems user, implementer, and integrator since 1984


Introduction


Introduction

The Agency’s mission is to supply imported drinking water and recycled water; collect, treat and dispose of wastewater; and provide other utility-related (renewable electrical energy compost) services to the communities it serves. The Agency strives to provide these services in a regionally planned, managed, and cost effective manner.

Key Agency priorities include protecting the public health and environment, maximizing the recycling of water and organic compost in the service area, protecting the Chino Groundwater Basin, and maintaining high customer satisfaction.


Background

• 300+ employees

• ~$120 million annual CIP budget

• 750,000 Service Population, expected to reach to 1,500,000 in ten years

• ~200 projects in CIP master schedule

• Primavera Schedule implemented in January 2005

– ~3,000 activities

– Cost and resource-loaded

– Bi-weekly updates, directly by project managers

– Semi-automated integration of actual costs and actual hours from Agency accounting system, implemented in July 2005


Background


Background

• 2-Level WBS – consistent with project phasing and Agency accounting system

• Project schedules developed from a standard 20+ activity template

• Resources divided into two categories

– Labor: Hours and related cost - Agency staff only

– Non-Labor: Cost only - Consultants, Contractors, Materials, Other


Initial State

Annual BudgetDevelopment

Progress andVarianceReports

Actual Hoursand Costs from

Accounting

Project ManagersUpdate Budgetsand Schedules


Initial State

• New projects are developed during the Annual CIP Budgeting process and added to Primavera

• Actual hours and costs from the Agency’s accounting system are imported into Primavera bi-weekly, using a semi-automated process. Costs represented in the accounting system cannot be unambiguously attributed to specific project activities at the level of detail required by project managers.

• Project managers update project budgets and schedules bi-weekly

• Schedules, remaining costs, and costs to complete are calculated by Primavera

• Progress and variance reports are provided to project managers and Agency management


Business Blueprint

• Agency Wide System Management Project (AWESOME) implementation process began in the Fall of 2006

• SAP Implementation divided into two Phases

– Phase I – Planned completion July 2007

– Phase II – Planned completion December 2007


Business BlueprintBlueprint Design Process

Identify current “As-Is” environment (Leads, SMEs, Consultants)

Confirm and describe requirements (Leads, SMEs, Process Owners, Consultants)

Develop and critique “To-Be” environment (Leads, SMEs, Process Owners, Consultants)

Confirm design (Leads, SMEs, Process Owners, Consultants)

Finalize and sign off on blueprint (Steering Committee)

Blueprint Objective

User driven requirements and design

Agency optimization, recognizing needs of individual functions

Design “90%” complete


Business Blueprint

Phase I – AWESOME Project Scope – July 2007• General Ledger ==== Primavera interface (import)

• Budget Control ==== Primavera interface (import)

• Cash Management

• Billing/Accounts Receivable

• Grant Management

• Purchasing & Contract Management

• Inventory

• Project Systems ==== Primavera interface (export and import)

• Accounts Payable

• Plant Maintenance Management

• Asset Accounting


Business BlueprintPhase II – AWESOME Project Scope – December 2007

Budget Preparation ==== Primavera interface (TBD)

Payroll ==== Primavera interface (import)

Personnel Administration

Benefits Administration

Business Warehouse


Desired State1. Create Work Breakdown Structure in Primavera to represent hierarchy

of work required to complete project

Level of detail can be increased during project

2. Identify Project Budget [estimated cost based on resource allocation] and master data in Primavera

Overall project budget (estimate at completion) and corresponding allocation to WBS elements


Desired State

CreateinitialWBS

Possible Grant Opportunities

As project details become known…

Project Lifecycle

the WBS is utilized to support the project processes

Purchase RequisitionsPurchase Orders

Capture Fixed Assets

BudgetPrep

ProjectDevelopment Design Bid &

Award Construction


Desired State

3. Synchronize Engineering & Financial Systems

Primavera to SAPProject WBS and estimate atcompletion

SAP to Primavera (system enabled)Actual costs, encumbrances, earmarks,and budget amendments

Project Structure (WBS) Estimate at Completion

Actual Costs Encumbrances

EarmarksBudget Amendments


Realization

• The Agency elected to develop procedures for transferring data between Primavera and SAP internally . . .

– Data extracted from Primavera via queries on the physical database

– Data imported into Primavera via SQL Server procedures against the SDK

• Data is exchanged between the applications via field-delimited text files

• Three basic interface processes . . .

1. Project WBS/Task structure and dates from Primavera to SAP

2. Project Budgets from SAP to Primavera user-defined-field (for variance analysis)

3. Project actual hours and costs from SAP to Primavera TASK table


Realization – Development Issues

• Limitations in SAP WBS structures and accounting codes required changes to Primavera project schedule coding for project numbers; WBS and task codes; and project codes.

• Loss of some flexibility in Primavera –

– Activity codes fixed to ensure one-to-one match with SAP cost accounts

– Required one-to-one match for project-level data complicates copying schedules, what-if analysis, etc.

• To simplify accommodation of historical costs, some coding restrictions of the legacy accounting system were retained in the new integrated system, potentially limiting future growth.

• Efforts to enhance and simplify the project schedule model lead to challenges in mapping historical costs; however, corresponding ambiguities for future costs are minimized.

• These changes necessitated redevelopment of most standard reports.


Results

• SAP-Primavera integration ensures the synchronization of capital project structures, budgets, and actual costs between various Agency departments.

– Uploading initial (and occasionally modified) project structures from Primavera to SAP ensures that the project scope, as contemplated by the project manager, is accurately represented in the financial system.

– By enforcing the allocation of costs to the same structure, both accounting and the project manager may be assured of controlled and unambiguous correlation between work performed and value received.

– Utilizing the same allocation of costs should significantly reduce the time required for actual hours and related costs to be represented in Primavera, increasing users’ confidence in the information’s timeliness and value.


Questions?

• Contacts

– Stacey Scott, [email protected]

– John Knoke, [email protected]

Integrating Primavera-SAP Inland Empire Utilities

Documents

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