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Interconnecting SAP and controlling

Purchasing and planning can build a bridge for construction project controlling

Stuttgart21, the Elbphilharmonie in Hamburg, the Berlin Brandenburg Airport – all these spectacular construction projects have one common aspect: Costs that have gotten out of control and deviate considerably from the target figure. It does not necessarily have to be that way. By building a bridge between planners and purchasers and with a deep integration into the SAP system for a continuous, always verifiable process between the departments involved, controlling would become a reality in the construction departments instead of being a mere requirement.

A thorough, transparent controlling in real time is often difficult. Frequently, the reason is the diversity of the systems involved, for instance MS Excel, programs for tendering, awarding and billing (AVA) or SAP. In such cases, media gaps are inevitable. As a result, controlling in SAP usually only allows a retrospective view of what has already happened and an actual cost control is rarely possible.

Frequent weaknesses in the process of construction planning and the execution thereof:

Media gaps are still a daily occurrence

The consumer defines a project. The budget for the project is usually determined and approved by means of Excel. The responsible planners in the specialist departments, if necessary aided by external specialist planners, create the comprehensive item lists with a classical program for tendering, awarding and billing (AVA). The items of the item list should and must describe the design comprehensively. Negotiations with the suppliers will be held on the basis of the submitted quotations.

The first changes of plan which the purchaser would like to negotiate over the course of discussions with suppliers already occur during the tendering process. From then on, the offers submitted by the suppliers become incomparable and the contractual basis is “individualized” due to the changes of plan. Although a negotiation protocol is written, the item list is rarely updated. This is the origin of the first difference between planning and the actual state of the negotiation – the first gap in documentation follows. The service packages are generalized and payment plans for processing and settlement are created for the sake of convenience. The monetary results are again recorded in Excel.

The disadvantages are manifest: A continuous and traceable documentation is lacking, transparency is lost and – above all – the SAP system is bypassed. Orders are specified in the tendering, awarding and billing program (AVA), simultaneously recorded manually in SAP and also maintained for controlling in Excel. For this purpose, purchasers record only the cumulated order values in their SAP system because creating an item list that contains all the individual service lines of an order involves great manual effort.

It’s getting critical in case of changes

Changes are daily occurrences in construction projects for many reasons. Without an SAP-driven change order management, which is not really included in the process outlined above, the controlling department lacks the necessary transparency. As a consequence, unrestricted overfulfillments are applied in SAP which clearly indicates that controlling via SAP is impossible. One relies on numbers stored Excel and on data maintenance and evaluation by individuals.

This procedure deprives dedicated project controlling of a solid basis. In addition, neither the program for tendering, awarding and billing (AVA) nor SAP show the complete costs – a valid liquidity planning is thus extremely difficult.

Comprehensive control in all project phases

Only an automated exchange of budget or estimated values among systems enables complete target/actual comparisons between the different project phases down to the item level – without requiring double data entries or risking input errors. By integrating the operational areas of purchasing (SAP system) and planning or construction management (AVA system), including a seamless display of changes, the entire process of construction planning and its execution becomes more transparent. This is the only way to ensure a continuous and reliable project controlling in real time.

 

 

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