Problem when using budget release with apportioned network types

[Former Member]

Hi Gurus

     I'm facing a problem with my client in the project budget release and I hope I can use your help.

We have a requirement to check budget availability for each activity and activate cost forecast, so our network type is apportioned. Simultaneously, we have a requirement to enable the financial department to control the project budget using budget release functionality.

The financial department has higher authority over the budget rather than the project manager (which is actually the case for every client I worked with).

When using apportioned network types, the assigned value for the WBS element is equal to the sum of all the planned values for the subordinate network activities. Which forces the financial department to either release the entire budget for WBS element or not (the budget for all the activities), and then to control the budget, the authority falls to the project manager to release whichever activity he likes.

The budget release must be greater than or equal to the sum of all activities. Never less.

We need to enable the financial department to have the flexibility to release whatever amount suits them while using the apportioned network functionality for other purposes.

Example:

Title                         Planned     Assigned     Original                      Budget

                                      Cost          Value         Budget                      Release

WBS 1                        10,000         10,000        12,000     12,000 >=  Amount  >= 10,000

     Activity 1                   4,600

     Activity 2                   2,400

     Activity 3                   3,000

In case we need to release 7000 for the first 2 activities only the system refuses because the release amount is less than the assigned value for the WBS element. And of course we cannot even specif the release amount for a certain activity in any given case (apportioned or not).

Is there anyway we can achieve this by any means possible?

If there isn't, Please provide us with a convincing justification to this problem.

Your contributions and opinions are highly appreciated

Many Thanks.

[Former Member]

Hi,

In case we need to release 7000 for the first 2 activities only the system refuses because the release amount is less than the assigned value for the WBS element. And of course we cannot even specif the release amount for a certain activity in any given case (apportioned or not).

    The above issue can be resolved through some work around process. But please check the feasiblty of the solution before implementing.

1. Treat and create a child WBS Element for each activty, so that any WBSE will have only one Activity.

2. Plan Costs

3. Assign Budget

4. Release Budget wherever required

Note: Apportioned network Values are considered as assigned values.

Regards,

Rao

[Former Member]

Hello Rao

     I'm afraid this is inapplicable because we are handling massive projects with large number of WBS elements already. Doing this will put us into the risk of digging into deeper levels and surpass the available limit of the coding mask for WBS elements. And also using 1 WBS for each activity will massively increase the number of WBS elements in the implementation and we have a maximum of 10,000 WBS elements before the system performance starts to decline and archiving becomes necessary.

[sammar81]

Hi Ahmed,

You need not to release the budget to have the budget controls.. You can do the tolerance limit check on original budget amount and can release the network activity as long as you have the necessary budget assigned to the WBS element.

What's your setting for the tolerance limit? Can you share the screen shot for the budget profile and tolerance limits settings?

Regards

Sammar

[Former Member]

Hi,

Please chec OPSC settings.

Whether Planning indicator is selected or not.

If you select this indicator, system will not consider whatever amount you planned as Assigned Value.

It will consider only for calc. of planned cost.

So, select this indicator and check one cycle for better understanding purpose.

Regards,

Rao.

[Former Member]

Hi Sammar

Activating budget availability on the original budget is not enough in this case, we need to have double checks. The financial department determines the budget for the project (and subsequently each WBS element under it) at the beginning. Then the financial department permits expenditure on each part of the project on monthly basis to control the financial cash flow from the very source.

Example:

In the month of July the activities in Bold are supposed to happen

the crossed activities have already happened

and the other activities are yet to happen

Object               Planned Cost

WBS 2.1.5

     Activity 1/5          $ 1400

     Activity 2/5          $   950

     Activity 3/5          $   800

     Activity 4/5          $ 1200

     Activity 5/5          $ 4500

WBS 2.1.6

     Activity 1/6          $ 2600

     Activity 2/6          $ 3400

     Activity 3/6          $ 2000

     Activity 4/6          $ 4600

     Activity 5/6          $   600

     Activity 6/6          $ 1100

Accordingly the financial manager will release additional $6500 to WBS 2.1.5 and only $6000 to WBS 2.1.6. In total the financial department can only release $12500 to this particular project in this particular month according to the financial plan.

The project manager may need to complete WBS 2.1.6 fully ($14300) during the month. The company policy states that the project manager cannot do so without returning to the financial manager and have his permission for more budget release.

In this case, while using apportioned network, the system will prevent the financial manager from releasing only $6000. And it will force him to release $14300 for the WBS 2.1.6 and nothing less.

The authority for the budget release is with the financial manager while the authority for activity release is with the project manager.

However here is my configuration screenshots.

[sammar81]

Hi Ahmed,

Your settings looks good..  whether the network is appended or apportioned will have an impact on the planned cost calculation in projects. What's the  issue you are facing in Budget release??

Regards

Sammar..

[Former Member]

Hello K Rao

     Ticking that check box will render the network (Non-Apportioned) which means we will lose the features of apportioned network like (Cost Forecast).

[Former Member]

Please read the Question head and my previous reply carefully.

[sammar81]

Got your problem... Is it okay for you if you skip the check on the Order Assigned values?

Can remove the tolerance limit settings for ++  and make it specific for all target groups except activity group "2". this way you can release the amount you wish to for apportioned networks..

see how it goes..

Regards

Sammar

[Former Member]

Hello Sammar,

     Your answer is very logical. I tested it. However, the system does not consider network orders as project orders! which is strange. The when I omit the transaction group 02 "Project Orders" and left all the rest, the system behavior in budgeting did not change "stayed the same as mentioned before" for budgeting with network activities.

This got me thinking to omit the transaction group 06 "Budgeting" and leave all the rest. When I did so, the problem was kind of solved, but not completely. The system behavior was extremely strange this time:- see example

Example:

Object        Plan           Budget       Release      Assigned

WBS1      $11000        $12000        $3000          $11000

   Activity 1    $4500    

   Activity 2    $6500   

Status AVAC was active

When posting an invoice [FB60] on activity 1, the posting was not restricted by the $3000. The posting limit was open up till the $4500 limit of the activity.

When posting subsequently to Activity 2, the same thing happened (6500 rather than 3000). And also when I posted the full amount, the system didn't issue the warning message "Budget Exhausted". More to it, the system didn't issue any messages in any cases except the "Budget Exceeded" message which is unexpected because my tolerance limits were:

Repeated for all transaction groups except 06 "Budgeting"

     Usage 1      90%

     Usage 2      95%

     Usage 4      100%

When I tried to post 5000 to activity 1, the system issued the message "budget exceeded by $6500" which is really weird.

That was the result of the summation of the excess of assigned value than the budget release (4500 - 3000 = 1500) + the posting amount 5000 which was considered as a whole as excess = 6500

Please try out this scenario and give me your opinion, and if this got us any closer to the answer.

[sammar81]

Hi Ahmed.

this is bit strange. Sorry I dont have a DEMO system in place to check your scenario..My suggestion would be to raise an OSS message for this behaviour and see what SAP recommends..

Regards

Sammar