Cost Saving Projects(SAP PS)

[former_member282774]

Hi Gurus,

Does any of you came across "Cost Saving Projects"?

Business scenario:

Our customer sets a target to save money(Cost Cutting)  for every Fiscal year.

Lets say their target for 2015 FY is 5 Million USD so they do whatever it takes to cut down the cost.

Can we capture this savings at Project level?

I don't think so because whatever cost that comes in to my Project must be either expenses or capital cost so how can we capture savings at Project level.

FYI they were not talking about Budget Control

[Former Member]

You can definitely do this alebit using a workaround as Saurabh has mentioned. You can make use of user fields in the WBS element e.g. the check boxes, to classify which WBS elements you would want to track these Cost Savings (can be level 1 WBS elements, level 2 WBS elements etc..).

Design a report which will then give you the deviations between your plan and actual. You can in turn also define certain categories against which you expect these cost savings. Develop a custom transaction which will help you to capture these cost savings as values against each of the WBS elements that you defined as relevant for cost saving. You can capture these figures against statistical key figures and report them as per your business requirement.

This is not a detailed solution, but just an idea on how you can achieve it. Explore more and develop the logic according to your business requirement.

[sanjeevc]

Hi, Srini,

yes, you can achieve it by scope of project so according to that you have to define/schedule scope for project objects and monitor on daily basis like all project task is being complete based on what is the completion date of that task. all relevant activities are confirming on daily basis or not?

check progress report on daily basis then you can save cost on your project.

in other word i want to say like if your project is completed as on it's scheduled finish date then project is saving project or if it is delayed from finish date then would be losses project.

Regards,

Sanjeev

[sushrut_sheth]

HI,

It depends upon your structuring and method which you using for cost calculations

Cost Saving is a term which can also be termed as reducing of future cost or indirect expenses over to the project

this can be achieved only by proper planning which can be achieved through network costing.plan each and every minute activity with proper scheduling and achieve that same plan within stipulated time and with expenses or cost less than that of the planned.

Note this is entirely business /operation based scenario ,where in efficiency can be increased and cost can be reduced and saved.System can only help you out with the reportings and status and cant make any decisions for the data .only thing  you can do in system is as mentioned above. and you have to convience your client for the same too.

[former_member195427]

Hi

Instead of cost saving I would rather call it 'Cost Control' projects. The workaround  for this project will start from proper cost planning in your projects followed by comparison of planned cost with actual cost on project and record deviations/overshoots in terms of man hours allocation etc.

You track section/WBS wise cost consumption and reallocate free resources to another jobs to get them done. You keep track of your procurement (ProMan) and delete those overhead/unnecessary procurement activities for which job is done thereby you will consume less material cost.

For any equipment assignment in project,make sure all notification for maintenance order creation and closure are carried out on right time .

PS: It's all about proper and efficient project management planning,control,execution and closure, with this you will ultimately save on your project.

Regards

Saurabh

[Former Member]

Hi,

I don't think it is possible as Project mainly have CAPEX. You can capture expenditure. As best practice to enter plan and budget yearly as per your maximum requirement to complete the yearly task. I don't exactly understand what is the reason of cost cutting here.

You can set a criteria of cost cutting lets say 5% annually for your budget. Just enter Plan budget for a FY and budgeting should be -5% of Plan data. In this way you can tally up Plan and Current Budget. But that plan data is not savings as it is only plan and can't consume somewhere else.

Also there is a option for setting AVAC limit as 95% so whenever user exceeds budget usage, system will throw error. In this way at the year end, your 5% cost of total FY budget will be saved/unused.

Regards

Shishir