Good project planning is a prerequisite for project success. Keeping the costs within budget, keeping appointments, and fulfilling tasks all dependent largely on the amount and quality of planning done.

Project planning with the Project System is not a one-time process. Depending on the degree of detail available and the project phase you are in, you can add to your planning work at any time.

The planning phase involves integrated use of the Project System and of functions from the following modules:

• PP Production Planning and Control
• CO Internal Accounting
• FI External Accounting and Cash Management
• PDM Product Data Management
• MM Materials Management, Services

To implement a project in its entirety, the project objectives must be described exactly and the project services to be rendered must be structured. A clear and unique project structure is a prerequisite for successful project planning, monitoring, and control.

Depending on the project type and the main focus of project monitoring, you structure your project using a work breakdown structure (WBS) or network. Standard structures, such as standard WBSs or the standard network, enable you to standardize and reuse some of the structures and processes that have worked well in past projects.

Use this function to plan the revenues you expect to earn when carrying out the project.
The following planning forms are available in the Project System:

• Manual revenue planning:
• By WBS
• By revenue element
• Automatic update of revenue plan values from the billing plan:
• In the WBS element
• In the sales order

Use this function to plan the costs you expect to incur when carrying out the project.
Cost planning has different objectives in the different project phases:

• At the design and rough-cut planning stage, cost planning acts as the basis for an initial cost estimate.
• At the approval stage, cost planning serves as a base for allocating the budget.
• During project execution, cost planning is the means of monitoring and controlling cost variances.

You can plan costs for your project in the SAP R/3 Project System, using the WBS and the network.

In networks, the most important factors are dates, personnel, and operating resources, not costs. Costs are planned automatically, based on an existing price/quantity structure. Use networks to plan costs if you are using complex project processing - that is, if dates and resources are relevant, as well as costs.

If cost planning and monitoring are the most important factors for you, as would be the case, for example, in capital investment projects or overhead cost projects, manual cost planning in the WBS elements is the correct planning tool to use. The WBS guarantees integration with Controlling and Financial Accounting.

You can plan dates as follows:

• Manual WBS scheduling: This is possible as soon as you have created WBS elements. In rough-cut planning, you can prescribe dates that are then binding on later planning. The rough plan can act as the starting point for more detailed planning. There are various functions for comparing, reconciling, or extrapolating dates.
• Project scheduling: You can schedule a project or a project subhierarchy, with all its assigned activities.
• Overall network scheduling: You use this procedure to schedule all networks that are linked by cross-network relationships.

Capacity planning is used to plan the capacities and resources used for project work carried out internally. It does not cover capacities procured from outside your company.

You stipulate this work and the work center provided for processing in internally processed network activities. The system determines the project capacity requirement in scheduling.
You can compare this requirement with the capacity available in the work centers involved. Use capacity leveling to ensure the best possible use of suitable capacities. The most important resources in projects are the project personnel. With workforce planning, you can distribute work accurately by period from network activities to personnel, planning centers, or HR organizational units.

You can create externally processed activities or external elements in your network - for example, if you commission an external design office to design a machine.

You can also plan services for externally processed activities and external elements.

As your project progress, expenditures and costs affecting project revenue are incurred - that is, payment inflows and outflows occur. You need to plan payments, so that you have some idea of when they will happen during project processing. This is the only way to have sufficient funds in the right place at the right time.

Project Cash Management plans and monitors the payment flow, as viewed from the project. Project Cash Management differs in this respect from Cash Management and Cash Budget Management in Treasury (TR), which monitor the payment flow for your whole business.

You use manual payment planning, particularly in the early stages of planning, to plan revenues and expenditures in one or more WBS elements. Manual payment planning does not required detailed project structures.

Material procurement planning covers the following processes:

• Assigning materials to activities: By assigning material components to network activities, you stipulate the components and raw materials that must be reserved or ordered for a project, and trigger procurement using material requirements planning (MRP) or purchasing.
• Project related material requirements planning: The main task of material requirements planning is to ensure that materials are available - that is, to procure the required materials in the right quantity and at the right time. The process includes monitoring stocks and, especially, triggering the procurement process when required.

You can enter statistical key figures to form key figures in reporting and to act as the basis for period-based allocations.

You use periodic allocations to determine all the planned data you must consider in a period, and make project plan data available for enterprise planning.
Periodic assignment covers the following processes:

• Planned results analysis: Periodic valuation of the planned results for the projects
• Planned overhead costing: assignment of overhead, using planned overhead in the WBS element
• Planned periodic reposting: Correction postings in the project - for example, when planned costs fall in a different period because of date changes
• Planned activity-based costing: In activity-based costing, the system distributes overhead from business process or cost centers/activity types, according to what caused them.
• Planned interest calculation: Improves planning quality by including the costs of tied-up capital The planned interest calculation enables you to achieve the best possible cost/revenue distribution in the project, particularly if it is capital-intensive.
• Planned settlement: You use planned settlement to assign planned costs to cost centers, business processes, or profitability segments to give you the overall view.

The budget is the approved cost framework for a project.
It differs from project cost planning in that it is binding. It is approved by management, to regulate how project costs develop over a given period.
The original budget is the first budget to be assigned.