SAP Commercial Project Management, a new application extending SAP Business Suite with project-management specif capabilities, is now generally available.
Read the official announcement on SAP Newsroom.
A dedicated section will be available on sap.com soon and will also be announced here.
My colleague, Aasawari Kakade, and I attended the ENR FutureTech West conference in San Francisco last week. It was a great opportunity to hear from industry experts and thought leaders, and network with the record-setting 320 attendees from North America and beyond.
One of the most interesting sessions for me was the half-day workshop on High-Performance Construction, led by Steve Jones of ENR. The presenters spoke about the lack of industry wide standard metrics to measure the health of a construction company, which have become commonplace to other industries like manufacturing. This has been apparent to us here at SAP, where customer value is at the heart of everything we do. It can be difficult to project or prove value when you don't have a good way to measure and track your company's performance compared to previous years and in relation to your peers! Fortunately, ENR and the Center for Integrated Facility Engineering (CIFE) at Stanford, along with some leading companies in the construction industry, are focused on this topic with the goal of creating awareness and raising the bar for everyone in the industry.
One method this group is using to achieve High-Performance Construction is to study similar transformations that have occurred in other industries. For example, “The Toyota Way” was mentioned numerous times as a reference for best practices originally designed for manufacturing which can be applied to the construction industry. They become even more relevant as offsite fabrication and modular construction become a commonplace.
As I've said before on this blog, one of the most fascinating things about working for SAP with an industry focus is the ability for our clients to access a peer group and knowledge base from other industries. For example, to learn more about complex offsite fabrication and modular building we can look to Aerospace & Defense, or if a construction company wants to buy materials in bulk, warehouse them, and distribute to their jobsites they could apply solutions and tap into a knowledge base that are developed with some of the top-performing wholesale distribution firms in the world.
To wrap up the 2-day ENR event, SAP hosted a networking dinner which was attended by an eclectic group of people from superintendents to Virtual Design & Construction leads to C-suite executives. It made for great conversation about experience on major construction projects, how to best drive adoption of new technologies in the enterprise, and a variety of other topics. We're looking forward to seeing everyone again soon at the next event: ENR Award of Excellence!
The biggest challenge facing the retail mall owner isn’t found within the mall’s physical corridors, retail spaces, or food courts. It isn’t occupancy rates, aging facilities, or security. Instead, for commercial real estate owners, the single biggest threat to the mall experience – and the bottom line – is online shopping. How can mall owners and traditional brick-and-mortar retailers combat the ease of shopping in your pajamas, then having the merchandise delivered right to your front door? To remain competitive and viable, mall owners and retailers must entice consumers to get off their couches. Owners must embrace mobile and social channels, while courting higher-quality retailers that provide a destination experience designed to attract the modern shopper. And owners and retailers must work together to increase both traffic and consumer spending. Sounds good – but how to achieve those goals? At SAP, we think the opportunity lies in harnessing intelligent data for mutually beneficial results. |
| A win-win drawn from data |
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| Behind-the-scenes optimization |
Optimizing the behind-the-scenes performance of the mall property is also critical. To save money, retail owners and operators need to understand and predict energy consumption and maintenance needs. Owners can use intelligent data to monitor the performance of electric meters, lights, boilers, and climate systems, helping the mall run smoothly and minimizing disruptions – for example, avoiding the failure of a mall’s HVAC system on a hot day. And leveraging intelligent data to optimize energy usage and efficiency lowers the cost of operations and improves ROI. |
Building relationships, driving satisfaction, and improving retention |
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Commercial real estate owners can use technology to provide tenants with information that helps build relationships and drive satisfaction and retention. Mall owners can, forexample, use mobile and social technologies to engagewith shoppers before, during, and after their visits, and topromote mall-wide events that drive overall traffic. Insightinto mall traffic patterns and other intelligent data can helpretailers connect with consumers and offer compellingproductsor services. It won’t be long, in fact, until retailers expect accessto such technology as part of their tenancy. |
| Get on the Big Data express |
Is it possible for intelligent data to benefit mall owners and retailers alike, driving bottom line improvements for both? SAP will pose the question at ISCS RECon in Las Vegas, May 18 to 20 –the annual gathering of shopping center industry leaders. While attendees are busy networking, negotiating deals, and brushing up on industry news, SAP will be on hand with our Big Data Express– giving you a firsthand view of how SAP is using real-time data to enhance the retail experience and boost the bottom line. Visit our Executive Briefing Center to learn how SAP Big Data solutions can help both owners and retailers uncover critical needs and opportunities; create new business models and revenue streams; and enable you to transact, analyze, and act on in-the-moment insights to increase revenues. |
At this year's SAPPHIRE NOW, I had the honor of hosting a microforum alongside Ranjeet Gadhoke from Zachry Construction and Juan Moore from B4 Consulting. The session was titled Growing and Optimizing Construction Operations and we discussed Zachry's phased SAP implementation which has supported their tremendous growth without disruption to the business. Juan Moore has provided a great summary of the session on his blog: SAPPHIRE Construction Industry Microforum Featured Zachry. If you're interested in hearing more about SAP's rapid and flexible deployment options, contact us today!
SAP is helping Engineering, Constructions and Operations Sector to manage the challenging business environment. The sector is passing through dynamic changes such as:
New Technologies to Solve Today’s Challenges
To address these challenges, SAP has responded with a broad range of innovations that help engineering, construction, and commercial real estate companies simplify and standardize. SAP enables companies to innovate faster, operate more safely and profitably, and ensure the right skills are available for the right project.
For example:
SAP Solutions in action
Some of the cases, where SAP enabled Customers to respond effectively to the challenges and gain competitive advantages
Use Case 1:A global infrastructure and services company needed real-time visibility into project financials to closely and constantly monitor planned versus actual values for individual projects that generate massive amounts of data. With SAP HANA in-memory technology, a custom forecast report that took 15 hours to run now takes only a few minutes. Project managers can respond in real time to variances that can cause margin erosions.
Use Case 2: A construction, mining, and engineering company needed better accuracy and accountability of reporting goods received from the field. Using SAP’s mobile platform and device management solutions, the company simplified and streamlined goods receipts, improving problem resolution by 15%. That enabled employees in the field to accurately enter information about deliveries in near real time, with minimal special training.
Use Case 3: A large construction and engineering company needed to manage a vast network of geographically dispersed talent and align the right skills to projects. Using solutions from SuccessFactors, an SAP company, in a cloud-based talent-management framework, managers can identify the best person for a given job, and quickly and accurately respond to bids and project demands.
Conclusion
There are many more stories from our unmatched customer base. In the EC&O industry, 60% of the top 100 global companies run SAP, and more than 3,800 other customers run better with SAP solutions. Come find out more at www.sap.com/eco.
You can watch the detailed video here.
I'm always impressed to see the plaques recognizing 25, 30, and sometimes 50-year employees of construction firms. People are the core of a construction company, and their collective experience and reputation is critical to winning new work and delivering high-quality projects safely, on time, and on budget. A very critical success factor for any company is its ability to innovate. This comes from employee knowledge, and more specifically from the orchestrated collective knowledge across the employee base, from the tenured to the rookies.
The U.S. Bureau of Labor Statistics predicts that millennials will make up the majority of the workforce by 2015, with 75% representation by 2030. Members of this generation are not as loyal to employers as baby boomers approaching retirement. A 20-something project manager will be driven by access to ‘cool’ projects and the latest technology to enable her ability to innovate and accelerate her contributions, so the question becomes: will she find this at your company or your competitor’s? Millennials also have higher expectations for what their employers provide beyond a paycheck; for example training and education, continuous feedback, specific goals, and well-defined opportunities for advancement.
Companies such as Bechtel are attracting, developing, and retaining top talent with the following best practices, managed by SuccessFactors.
What will your long-tenured employee list look like in 25 years? And more importantly, what are you doing to make sure it will be longer than ever? Contact me for complimentary access to Value Lifecycle Manager, SAP's globally-recognized database of key performance indicators and best practices for talent management, and to find out where you stand in comparison to your peers.
Carson Diltz
Senior Principal, SAP Industry Value Engineering
Twitter: CarsonDiltz
Email: carson.diltz@sap.com
We did it!
As I mentioned before ( MILLS Runs SAP... And it's about to run ETM!), we were about to go live in SAP ETM solution.
Aaaaand It's done!
After many efforts and a lot of hard work of our consultants and key users, we proudly announce that we are the third company running SAP EC&O/ETM solution in Latin America. The first Mills' elected division (Jahu) is now completely using it.
But it's not time to relax yet. The other 2 Mills' divisions (Rental and CC) are about to go. We are currently finishing the Integrated Tests and, with Jahu's help and expertise, we fully believe new successes are about to come.
I'll keep you up to date!
SAP helps companies to procure services with optimizing the collaboration between involved business partners and the invoicing with specific requirements like advance payment, stage payment, cumulative values, retention handling.
SAP JAM is a secure, social network solution to collaborate with your business partner in the cloud. It helps to connect contractors with subcontractors with information and processes in the cloud to accelerate business and drive results. It protects corporate data with secure social collaboration. It empowers employees to find internal subject matter experts and collaborators quickly. It helps teams tame project chaos, build consensus, solve problems, and improve decision making.
The application Debit-Side and Credit-Side Down Payment Chains helps companies to easier manage the invoicing with construction specific requirements like advance payment, stage payment, cumulative values, retention handling, and additional costs.
This blog focusses on the business process to procure of services from subcontractor. The main aspect is the optimization of the execution and the invoicing.
The continuous collaboration in procurement lifecycles optimizes business results. Collaboration, based on SAP JAM, helps business partners exchange information like documents and drive decisions and share news. It could replace the communication by mail. The knowledge sharing via SAP JAM helps to remove bottle necks of key employees. Members of a group have access to the information at the time they require them and are enabled to fetch the latest information at the time they are available. All members of the group can share issues and help to solve them.
Virtual private workspace, for members of the own company and members outside the own company such as subcontractor or architects, ensure open dialog, foster innovation and get optimized results. Virtual private workspace allow easily pull in with members to resolve exceptions, scure approvals, generate ideas, manage tasks or review performance. Blogs can be used to inform all members involved in the procurement cycles about news and issues. Task with deadlines and assignment to members allow the handling of issues or review performance. Ideas, discussions and polls enable the project team to generate ideas and solve issues in a short time. The document collaboration reduces email, increase the dialog and speeds revisions. Legal documents, qualifications and construction plans can be shared. Project members have easily access to the latest version of the document and the history.
The application Debit-side and Credit-side Down Payment Chain consider invoicing aspects for services like advance payment, stage payment, cumulative values, retention handling and additional costs.
Benefits for invoicing using credit-side down payment chains are:
The Credit-Side Down Payment Chain offers two business processes. The first option is to start the business process from purchase order. The agreement between the business partners is represented by purchase order with externally performed services and the contract of credit-side down payment chain. The completed work can be recorded in the service entry sheet. This is an optional step. When it is executed the system offers the option to check the invoice amount against the amount of the released service entry sheets. The invoicing takes place in the credit-side down payment chain. Possible transactions are advance payment request, partial invoices, final invoice and corrections. The purchase order history and the commitment are updated when a posting takes place in the down payment chain. The payment of the open payables is done with FI transactions. The posting can be done automatically or manually, depending on the transaction that you choose to use. You can use transactions such as F-53 (Post Outgoing Payment) and F-52 (Incoming Payment) to post the invoice manually. Alternatively, you can use transactions such as F110 (Payments), F110S (Schedule Payment Program Periodically) to post the payments automatically.
The second option is to start the business process from contract of the credit-side down payment chain. The agreement between the business partners is represented by the contract of credit-side down payment chain. The invoicing takes place in the credit-side down payment chain. The payment of the open payables is done with FI transactions.
For both options two main transactions - /SAPPCE/DPCK01 Credit-Side Down Payment Chain and /SAPPCE/DPC_LIST_K Credit-Side Down Payment Chain-List - offered to the user to maintain the contract of the down payment chain, create posting, and monitor the payables for subcontractors.
The transaction /SAPPCE/DPCK01 Credit-Side Down Payment Chain enable the user to maintain the contract specific requirements for construction invoicing like retention different payment terms for partial invoices and final invoices, create new postings like advance payment request or invoice, and detailed overview on different level to monitor key figures like invoice amount, retention amount, and payments.
The register Transaction enables the user to an overview of important key figures including payment for each transaction such as advance payment, first partial invoice, and final invoice.
One transaction consists of several accounting documents e.g. a transaction for partial invoice consists of an invoice and the corresponding payment. This enable the user easily review the key figures like requested amount and paid amount for each transaction and whole order.
The second transaction for credit-side down payment chain - /SAPPCE/DPC_LIST_K Credit-Side Down Payment Chain-List– enables the user to monitor key figures for several credit-side down payment chains. The user can monitor all down payment chains for one project or all down payment chains for a subcontractor.
Internally the controlling and management is done usually by means of a project (PS = Project System). A project with at least one work breakdown structure (WBS) element which is defined as an account assignment element can be used in the purchase order as an account assignment object. Instead of a project one of the following cost controlling objects can be used:
When a posting is entered the system proposes the proportion of the account assignment from the definition of the contract or the released service entry
sheets. The user can divide the assignment to the account assignment objects entered in the contract. The system allows the user to enter a percentage or amount.
The actually performed services by the supplier are entered in a service entry sheet. The service entry sheet can handle planned and unplanned services. The general contractor controls the service confirmation of the supplier and accepts it. The accepted service entry sheet is the basis for the process of invoicing. Especially in Self-Invoicing processes the accepted service entry sheet support the creation of postings. If user interface does not fit to user requirements, BAPIs or services are available to create own UI.
Contracts in construction industry frequently include retention clauses. This allows the customer/contractor to hold back a proportion of the contract price once the work has been completed, pending confirmation that the subcontractor has done the work properly and has rectified any immediate faults that might be found. The retention clauses are defined in the contract on a percentage of the contracted work. Different retentions are agreed for interim payments and final payments such as guaranty or warranty.
Retentions for partial invoices are released when creating a final invoice. In some cases retentions of partial invoices are released with the next partial invoice. The retentions for final invoices are released after a defined guarantee period. Special retentions are entered in the invoice due to quality defects or
incorrect invoicing of the subcontractor. They are not defined in the contract between the general contractor and the subcontractor. They can be released with the next invoices. When the user enters a posting, the system proposes amount of retention based on the defined contractual retentions. User can adapt the retention amount by entering a percentage or amount. User enters special retention amount as a percentage or amount to hold money back due to specific circumstances.
In the Customizing you can define the base for the retention calculation: net value or gross value. Also you can define default retentions and values which
are considered at the time the contract is created.
When the general contractor provides for the subcontractor services like water or electricity on the construction side, general contractor and subcontractor defines additional costs in the contract as a percentage of the invoice amount. For example the invoice amount will be reduced by 0.1%. This mean the payable item for the subcontractor is invoice amount minus 0.1%.
In the Customizing you define the additional cost and how it influences the posting:
Contractual additional costs entered as a percentage for postings and account assignment objects.
When the user enters a posting, system proposes amount of additional costs based on the defined contractual additional costs. The user can adapt the additional cost by entering a percentage or amount. User enters special retention amount as a percentage or amount to hold money back due to specific circumstances.
Advance payments are for pre-financing and are offset by the subsequent partial invoice. The system does not calculate retention amounts and additional costs. Advance payments only affect payment. They do not affect revenues. The advance payment request is maintained in the credit-side down payment chain. The payment is done with FI transactions like F-48.
The user enters the amount of advance payment cleared with partial invoice.
When the user creates the final invoice the system clears all advance payments.
In some countries, taxes are not recognized when an invoice is issued, but when a payment is made. In SAP ERP the Deferred Tax helps to enable the legal requirement.
The German law is supported. In Germany the reporting time depends on the existing of the final invoice of a down payment chain. Before the final invoice is posted the reporting time is when the payment posting. After the final invoice is created the reporting time switch to the time of invoice posting.
The system also supports countries where the reporting time is always the time the payment is posted.
In many countries (Germany, Austria, France, UK, Nigeria, and so on) exists a legal requirements that the customer pay the tax for the supplier directly to the local authority. The supplier receives the payment without the tax amount. The supplier doesn’t have to pay the tax to the local authority. In SAP ERP the Extended Withholding Tax helps to enable the legal requirement.
The application Down Payment Chain provides the following options to adopt the application to company specific requirements:
The application Down Payment Chain is part SAP ERP belonging to software component EA-APPL from EhP2 (Enhancement Package) to EhP6 and EA-FIN from EhP7. The application Down Payment Chain is an optional component. You have to activate the Enterprise Extension EA-FIN Financials Extension and
the Enterprise Business Function LOG_FI_DPC_MM_1 Enhancement for Down Payment Chain (EhP5). The subcontractor management process differs in various countries and also has legal requirements. You have to check if the localization is available for the specific business case (note 1021741 - Down Payment Chains: Release restrictions). If you want to use the application down payment chain in other countries, SAP offers the pilot note 1679235 Pilot SAP Note: Release down paymt chains for all countries. Please request the assignment of your customer number to the pilot note via a customer message of component FI-AF-DPC.
SAP for Engineering, Construction & Operations offers the Business Process Procurement of Services and Settlement of Invoices with Down Payment Chain of the Scenario Subcontractor Management. The Configuration Description helps you to implement the application Down Payment Chain. Today an un-valuated service entry sheet is supported.
For more information about Down Payment Chains see SAP Help Portal at http://help-sap.com> SAP ERP > Financial Accounting > Accounts Payable > FI Accounts Receivable and Accounts Payable > Debit-Side and Credit-Side Down Payment Chain.
Do you plan to run the Financials Add-on for SAP Business Suite powered by SAP HANA 1.0 together with SAP ERP system on the same system?
The Financials Add-on can be combined with a subset of enhancement package 7 for SAP ERP 6.0 software components and SAP Standard Add-ons. Here you find an overview which software components are released to run together with Financials Add-on for SAP Business Suite powered by SAP HANA 1.0.
The Financials add-on for SAP Business Suite by SAP HANA can be deployed to SAP enhancement package 7 for SAP ERP 6.0 on a HANA installation. The Financials add-on for SAP Business Suite by SAP HANA provide optimized financial accounting processes and supports the operational finance experts driving efficiency and compliance. It combines optimized business processes, lean data architecture, and a modern user experience. It is an alternative to the classical ERP Financials core applications of SAP enhancement package 7 for SAP ERP 6.0. The financials add-on for SAP Business Suite powered by SAP HANA is also a central component of SAP Simple Finance. All restrictions of this product also apply to SAP Simple Finance. The financials add-on for SAP Business Suite powered by SAP HANA is a net new product and not the legal successor for Financials in SAP ERP. Therefore it is not delivered under any maintenance agreement for SAP ERP.
In general, please check whether your software components and Add-ons are released for usage with financials add-on for SAP Business Suite powered by SAP HANA 1.0.
In case you are using Financials applications with SAP enhancement package 7 for SAP ERP or previous product versions, a migration project to the financials add-on for SAP Business Suite powered by SAP HANA 1.0 is required. For more information, see SAP Help portal -> financials add-on for SAP Business Suite powered by SAP HANA 1.0 -> Application Help: SAP ERP Central Component -> Accounting -> financials add-on for SAP Business Suite powered by SAP HANA -> Migration to financials add-on for SAP Business Suite powered by SAP HANA and the Administrator's Guide for financials add-on for SAP Business Suite powered by SAP HANA 1.0 at service.sap.com/erp-inst.
These notes help to identify if the software component or Add-on is released for usage with financials Add-on for SAP Business Suite powered by SAP HANA 1.0:
In case you do not find the add-on you are looking for, please contact SAP Support (under XX-SER-REL) or the specific partner (non SAP-Products).
The table below lists the mainly used component to cover industry scenarios for Engineering Construction and Operation.
| Component | Release | Short Description | Comment |
|---|---|---|---|
| SAP_APPL | 617 | Logistics and Accounting | |
| EA_APPL | 617 | SAP Enterprise Extension PLM, SCM, Financials |
|
| EA-FIN | 617 | EA-FIN | |
| ECC-DIMP | 617 | DIMP | Restriction listed in Note 2046809 |
| CPD | 1.0 | Commercial Project Delivery 1.0 | Note 1891808 has to be applied |
| PICM | 1.0 | PICM 1.0 | Note 1891808 has to be applied |
The following solutions relevant for EC&O specific business processes are released with Financials add-on for SAP Business Suite powered by SAP HANA:
The following SAP notes give details about the release restriction the financials add-on for SAP Business Suite powered by SAP HANA 1.0 and prerequisite other product versions:
I recently wrote and published, on an AEC related business Blog, a white paper named "Construction Lifecycle Management – a necessary business strategy" focused on adopting new thinking and business practices to achieve Lean in Industrialized Construction.
I would like to submit it to this forum for debating openly about the necessity to adopt a holistic approach to Construction and instead of "reinventing the wheel", adopt the same principles that made Lean a reality in Manufacturing.
Though in a nutshell, Construction Lifecycle Management is simply PLM for Construction, I believe this forum is more appropriate compared to the PLM one; mostly because it's concerned mainly with the AEC/EPC ecosystem.
The debate is clear, which vendors would be best suited to provide most value to Industrialized Construction, either ERP or PLM ones? Or maybe both...
By Luke Marson
It’s no secret that the construction industry is facing an unprecedented shortage of skilled workers. The industry’s worker exodus during the financial crisis of the 2000s and retiring baby boomers leaves “70% of construction CEOs concerned about the availability of key resources and rising labor costs in growth markets,” according to a PWC construction industry survey. This labor shortage may exclude you from competitive bids – or worse yet – jeopardize project safety and success with untrained workers. So, the pressure is on both small and large construction companies – from general contractors to self-perform – to recruit and retain skilled workers.
Recruiting skilled labor and the rise of the digital age have changed the face of hiring. Word-of-mouth and local advertising are the hiring strategies of a bygone era. Today, new technology enables customized recruiting, marketing, management, and onboarding easily available at lower costs and with greater return on investment. Don’t be one of the 48% of organizations that have difficultly hiring employees with base-level skills or one of the organizations where 25% of new hires leave within the first year. Think about investing in the foremost technology that enables you to strategically manage your human resources initiatives for long-term growth and profitability.
The SuccessFactors HCM suite – the leading human resources enterprise software suite – is the perfect fit for construction companies looking to improve the way they attract skilled hires and engage, manage, and retain them. The suite provides capabilities that include:
On July 29th at 11am PST / 2pm EST, B4 Consulting and Hula Partners will show you how the SuccessFactors HCM suite can help you attract, develop, and retain skilled workers while minimizing turn-over. Please join us for this free webinar in which you will also have the opportunity to ask industry experts on how to implement strategic HR in your company.
Follow this link for Webinar Registration: http://info.b4-consulting.com/successfactors-webinar-0-0
About the Author
Luke Marson
Chief Cloud HCM Architect
Hula Partners
An experienced solution architect and thought leader in HR technology, Luke has worked with over 40 customers on 5 continents. A prolific writer and co-author of SuccessFactors with SAP ERP HCM.
The Commodore 64 , introduced in 1982, remains the best-selling single personal computer model of all time and I believe this to be so because it was priced right, readily available, and arrived at an inflection point for its market. SAP S/4HANA, albeit on the other end of the technology spectrum, is poised to do just the same thing. Similarly, the construction industry is at its own inflection point, where its rapid adoption of digital technology will enable it to experience the same growth in efficiency and cost control gains as did the manufacturing industry, but without the several decade-long evolutionary process.
Looking to automate and visualize your construction procurement process? Then attend our session titled: Automate Construction Procurement with Visualization led by Jake Macholtz, VP of Technology for Kiewit Corporation on May 17 at 01:30 at SAPPHIRE NOW
Looking to deliver project faster? Then join this discussion led by George Earle, Head of Visual Enterprise Services at SAP to learn how SAP is helping to Deliver Projects Faster with Digital Construction and Facility Management to create a digital pipeline that reduces change orders from design to commissioning. On May 17 at 1:00 pm at SAPPHIRE NOW.
Looking to Mobilize Construction from the Cloud? Then come see the demo with Johnny Clemmons, Global Director for Construction and Operations at SAP on May 19 at 12:30 pm at SAPPHIRE NOW.
Looking to turn your global construction workforce into a competitive advantage? Then come see the demo with Michael Shomberg, Global VP for Construction and Operations at SAP on May 19 at 12:30 pm at SAPPHIRE NOW.
Only SAP has the end-to-end digital solutions to interconnect all aspects of your construction company’s value chain to drive business outcomes in real time. You can radically simplify your business core and connect it to the limitless possibilities of Big Data, the Internet of Things, and business networks.
Are you ready to enable a once-in a-generation transformation? Please build your personal agenda at the SAPPHIRE NOW + ASUG website and meet me at SAPPHIRE NOW in Orlando on May 17, 18 and 19.