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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Connected
Project
Management in
the Oil, Gas &
Chemicals
Industry
Defining
the digital future of
capital projects
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Executive Summary 3
Challenges In The Oil, Gas & Chemicals Industry 4
Capital Project Management Overview
What Is Capital Project Management?
What Are Some Of The Leading Practice Reports and Dashboards?
What Value Would An Organization Derive From An Implementation?
How Does An Organization Decide Which Technology Platform To Use?
5
6
10
13
14
How Can SAP Help?
Power Of SAP S4/HANA To Enable Capital Project Management
Solution Suite
Customer Successes
16
17
23
24
Final Thoughts 27
TABLE OF CONTENTS
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
EXECUTIVE SUMMARY
The Digital Project Revolution
Oil, Gas & Chemicals is a capital intensive industry that has as a fundamental business requirement to increase project
profitability for all capital projects. Why? Most companies are experiencing:
1. Increasing shareholder expectations and compliance requirements
2. A higher than acceptable rate of project budget overruns, delays, and even project failures
3. Increasing project complexity and shortening of delivery dates for projects
4. An increasing level of fragmented process and data management
The most effective approach to achieving this requirement of increased project profitability is by gaining improved insight
and control and optimized process efficiency within each of the capital projects and across the investment portfolio.
This approach also drives a reduction in project risk through improved transparency and data consistency. As a result, each
capital project team is able to achieve better quality and faster response times enabled via enhanced process
standardization and flexibility.
SAP is committed to partnering with its customers as they transform into digital Oil, Gas & Chemical companies by helping:
1. Reimagine business models to find new revenue and profit sources by offering innovative approaches to addressing
market challenges
2. Reimagine business processes and use digital technology to optimize business outcomes by converging information and
operational technologies
3. Reimagine the role and structure of the workforce to support future business by incorporating wearable technology, 3D
printers, and geospatial technologies
Our vision is to help the Oil, Gas & Chemicals industry digitally transform in order to drive profitable growth, build customer
intimacy and grow talent. This document offers our point of view on how Capital Project management must be
implemented, how SAP can help and some of the leading practices we have seen.
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
Technology Platform
Project Management
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CHALLENGES IN THE OIL, GAS & CHEMICALS INDUSTRY
The New Normal
There are 5 major trends that we see in the Oil, Gas & Chemicals industry when it comes to Capital projects:
LABOR SHORTAGE
There is a greater need for reallocation of work, that
considers staffing/sourcing solutions for point or
transactional skills thereby releasing scarce talent. This
requires a change in operating model related to contingent
labor management enabling the active management of the
contractor workforce.
EVOLVING CONTRACTING MODELS
Contracting models that vary depending on scope,
location, local content, resource availability (operator and
contractor), financing etc. and the use of service
intermediaries to support vendor management, contract
management and claims management.
GLOBAL PURCHASING POWER
High in-country labor costs, skill availability, in-country
fabrication capacity and complex technologies have seen a
movement towards offshore fabrication and modular
development. This manifests itself in the development of
an international purchasing organization, low cost country
sourcing strategies and distributed development teams.
DATA CONSISTENCY
Common applications that enable migration of staff
between projects and a common application, technical and
data architecture supports portfolio and project reporting
and decision making. Integration ensures less process
handoffs and improves data integrity.
FACT BASED DECISION MAKING
Tools and decision support centers that enable the
visualization of project data for timely decision making and
the use of analytics to understand leading and lagging
indicators. This capability is enabled through the common
toolset and associated data model.
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
REIMAGINING
What is Capital Project Management?
“To manage their projects, oil, gas and chemicals project professionals
today typically use their own spreadsheet-based, custom-developed
applications; these fragmented solutions are not connected to
corporate systems. As a consequence, project managers often find it
difficult to get up-to-date and real-time information on projects, detect
project risks, and obtain the current project status. In addition, they
tend to spend a great deal of time manually consolidating data from
different sources – or be forced to make high-risk decisions based on
inaccurate or outdated data.”
Ken Evans, Vice President Oil and Gas Industry Business Unit, SAP
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Is Capital Project Management?
We define Project management as the application of
processes, methods, knowledge, skills and experience
to achieve the project objectives. Capital Project
Management is the foundation on which Business
Strategy and Portfolio management sit on.
Our definition breaks Capital Project Management down
into six interdependent capabilities namely:
1. Project Planning and Execution which is defined as
the guiding principles that an organization uses to
plan, forecast and execute projects while remaining
focused on program goals, addressing appropriate
risks and fulfilling stakeholder requirements.
2. Resource Management which is defined as
anticipating and capturing resource demand,
Sourcing and
Procurement
Human
Resources
Project Planning and Execution
Engineering
Management
Resource
Management
Contract
Management
Procurement
Analytics
Supplier
Management
Invoice and
Payables
Management
Operational
Purchasing
Workforce
Planning
Career and
Talent
Management
Scope
Management
Schedule
Management
Quality
Management
Governance
Communication
Management
Cost
Management
Risk
Management
Time
Management
Simulation and
Analysis
Engineering
Data
Management
Engineering
Design
Resource Supply
and Demand
Forecast
Resource
Assignments
Contractor
Labor
Management
Capital Project Management
Change
Management
Project
Closeout
Enterprise
Stage Gate
Management
Finance and
Accounting
Knowledge
Management
Reporting and
Visualization
assigning the right skilled resources to the right projects and augmenting the project with contractors should there be a
shortage of employees.
2. Engineering Management which is defined as the application of engineering principles for the effective planning and
efficient operations of managing a project, manufacturing or industrial operations.
3. Sourcing and Procurement which is defined as an approach to supply chain management that formalizes the way
information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best
possible values in the marketplace.
4. Human Resources which is defined as the continual process used to align the needs and priorities of the organization
with those of its workforce while also maintaining and managing the talent pool.
5. Enterprise which is defined as all the activities that support the management of capital projects from Knowledge
Management to Collaboration to Financial Management and Reporting.
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Is Capital Project Management?
Each capability contains specific disciplines that need to be mastered. For each of the six capabilities, there are multiple sub-
capabilities that make up the process map that support the end to end Enterprise Project Portfolio Management Process as
defined by SAP.
Sub-Capability Description
Governance
Defined as the processes, tools and activities that identifies how one can ensure
decision making and delivery management are focused on achieving program goals in a
consistent manner, addressing appropriate risks while fulfilling stakeholder
requirements.
Scope Management
Defined as all of the services to be provided as a program. Identifies the deliverables,
and estimates the risks while establishing clear achievable objectives.
Schedule management
Defined as the process of developing, maintaining and communicating schedules for
time and resource.
Cost Management
Defined as the processes, tools and activities involved in identifying the program's
financial sources and resources, integrating the budget of individual program
components, estimating and developing the overall budget for the program and
controlling the costs so that the program can be completed within the approved budget.
Change Management
Defined as the process of requesting, determining attainability, planning and
implementing changes to a project (engineering or project change request).
Time Management
Defined as the process of capturing actual time spent on an activity that is captured in
the project plan. This allows one to track actuals vs. forecasts for time spent on
completing an activity.
Risk Management
Defined as the processes, tools and activities that aids in identifying, evaluating, and
responding to program risks that are either through internal or external factors.
Quality Management
Defined as the processes, tools and activities of the performing organization that
determine quality policies, objectives and responsibilities so that the program will
satisfy the needs for which it was undertaken.
Communication Management
Defined as the processes, tools and activities for ensuring timely and appropriate
generation, collection, distribution, storage, retrieval and ultimate disposition of
program information.
Project Closeout
Defined as the process or activities associated with finalizing the hand off of
the project deliverables to the business team and completing the administrative aspects
of closing the project.
Capability – Project Planning and Execution
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Is Capital Project Management?
Sub-Capability Description
Resource Supply and Demand
Forecast
Defined as the process of forecasting the resources required to execute a project,
comparing demand against available resources and identifying the resource gaps.
Resource Assignments Defined as the process of assigning named resources to a project.
Contractor Labor Management
Defined as the process of identifying and managing the contractors that are required to
execute a project.
Capability – Resource Management
Sub-Capability Description
Engineering Data Management Defined as administration of documents or data related to engineering applications.
Engineering Design Defined as the process of devising a process unit to meet desired needs.
Simulation and
Analysis
Defined as the usage of simulation tools that are used for the design, development,
analysis and optimization of technical processes such as refineries, chemical plants,
power stations, complex manufacturing operations, and similar technical functions.
Capability – Engineering Management
Sub-Capability Description
Operational Purchasing
Defined as the activity of supporting the operational purchaser holistically across all
buying activities such as finding an appropriate source of supply, processing purchase
requisitions, and creating and processing purchase orders.
Contract Management
Defined as the automated and manual processes for source assignments to operational
demands, by using source lists and purchase information records.
Capability – Sourcing and Procurement
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Is Capital Project Management?
Sub-Capability Description
Invoice and Payables
Management
Defined as the process to create supplier invoices with or without reference to a
purchase order; view and instantly correct inaccurate supplier invoices.
Supplier Management
Defined as the process to classify and manage suppliers using attributes and master
data along with the continuous activity of supplier development.
Procurement Analytics
Defined as the ability of an organization to generate real-time insights into supplier
spend, evaluations and scores, and contracts while instantly spotting and addressing
gaps in suppliers’ performance in order to prevent the loss of business opportunities.
Capability – Sourcing and Procurement (continued)
Sub-Capability Description
Workforce Planning
Defined as the continual process used to align the needs and priorities of the
organization with those of its workforce to ensure it can meet legislative, regulatory,
service, production requirements and organizational objectives.
Career and Talent
Management
Defined as the process of using strategic human resource planning to improve business
value and to make it possible for organizations to reach their goals.
Capability – Human Resources
Sub-Capability Description
Stage Gate Management
Defined as a phase-gate model, also referred to as a stage-gate process in which a
project is divided into stages or phases, separated by gates.
Finance and Accounting
Defined as the field of accounting concerned with the summary, analysis and reporting
of financial transactions pertaining to a business.
Knowledge Management
Defined as the process of creating, sharing, using and managing the knowledge and
information of an organization.
Reporting and Visualization
Defined as the reports and views that will enhance visibility of project status, thus
allowing teams to be aware of areas within the project that are on or off track.
Capability – Enterprise
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Are Some Of The Leading Practice Reports and Dashboards?
Capital Projects can be evaluated countless ways, but companies experience diminishing returns when criterias are
redundant and overly complex. The main goal of these reports is to enable decision making with relevant and timely
information.
Some of the leading practice reports that have been used by companies are:
Reports Description
Project Status Report
Allows decision makers to see how a project is progressing
throughout the different stages of a capital project.
Scope Management
Change Order Status – Identify number of change orders
requested for the project.
Change Order Impact – Identify costs of change orders
requested for the project.
Schedule Management
Allows decision makers to see how a project is progressing
throughout the major activities namely engineering,
procurement and construction.
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Are Some Of The Leading Practice Reports and Dashboards?
Reports Description
Cost Performance Index
A measure of the efficiency of expenses spent on a project.
Cost performance index (CPI) is the ratio of earned value
(EV) over actual costs (AC); therefore, CPI is equal to EV
divided by AC.
Schedule Performance index
Schedule performance index (SPI) is the ratio of the earned
value (EV) to the planned value (PV). If the SPI is less than
one, it indicates that the project is potentially behind
schedule to-date whereas an SPI greater than one,
indicates the project is running ahead of schedule.
Estimate at Completion (EAC)
Estimate at Completion (EAC) forecasts the total effort,
from start to finish, to complete a task, and deliver the
project based on actual performance to date and project
team estimates.
Estimate To Complete (ETC)
Estimate to Complete (ETC) is the remaining work of the
project.
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Are Some Of The Leading Practice Reports and Dashboards?
Reports Description
Engineering Progress
This indicator gives evidence of the progress of engineering
activities of a project taking into consideration the ratio
between the number of project released deliverables and
the related total number of deliverables to be released (e.g.
isometrics, P&IDs, etc.)
Material Availability
Highlights how current supply meets current & forecasted
demand by commodity code. Formula - ((Available Supply
- (Current + Forecasted demand) )/ Available Supply)*100
Quality Management:
Indicator on the percentage or number of non-conformities
opened by internal and external audit.
Safety
Number of days without lost time incident.
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
What Value Would An Organization Derive From An Implementation?
By implementing Capital Project management; an organization can realize quantifiable value across the following areas:
Value Driver
(Source – SAP Performance Benchmarking)
Estimated Improvement Ranges
Low High
Improved capital project proposal approval rate 5% 10%
Increased revenue through faster completion of projects 10% 20%
Reduced project cost overruns 20% 30%
Reduced capital projects management cost 20% 30%
Reduced billable revenue from change requests that is
rejected by clients
20% 30%
Improve user compliance and ease namely Guided End-User
buying
5% 10%
Increase sourcing savings – better unit price reduction 10% 15%
Improve Transactional Procurement FTE Productivity 15% 20%
Improve Invoice Receipt and Processing FTE Productivity 15% 20%
Improved supplier compliance 5% 10%
Improve days payable outstanding 2 days 5 days
Reduce cost by improving contingent labor spend under
compliance
10% 15%
Improve statement of work (SoW) project cost savings
through better rate negotiation
10% 15%
Reduce Accounts Payable Error Reduction 5% 6%
Increase Sourcing Savings by Enhanced Supplier Visibility 10% 15%
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
How Does An Organization Decide Which Technology Platform To Use?
Organizations should take a holistic approach when deciding on which technology platform to use. Requirements need to be
looked at from two broad categories:
1. Functional and
2. Technical
For Functional requirements; there are six categories on which a technology platform need to be assessed on:
Functional requirement category Key question(s) to be ask
1. Project Planning & Execution
How well does the technology platform support the
management of scope, costs, schedule and change
management components with respect to executing a
project? How well does the tool represent and track
(hierarchical) interdependencies? How well does the tool
tie a project back to Portfolio strategy?
2. Resource Management
How well does the technology platform support resource
forecasting, allocation and time tracking?
3. Engineering Management
How well does the technology platform support
management of engineering information such as P&IDs,
CAD models and simulation calculations?
4. Sourcing and Procurement
How well does the technology platform allow an
organization to source and procure assets globally?
5. Human Resources
How well does the technology platform support the talent
management and career development of employees
assigned to a project?
6. Enterprise Functions
How well does the technology platform support the
integration with other business functions such as finance
and accounting?
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
CAPITAL PROJECT MANAGEMENT OVERVIEW
How Does An Organization Decide Which Technology Platform To Use?
For Technical requirements; there are six categories on which a technology platform need to be assessed on:
Technical requirement category Key question(s) to be ask
1. Reporting
How well does the technology platform support the
customization of personal and customized dashboards,
charts and diagrams, custom reports and report
templates, searching and filtering functionalities, save
customised reports, multiple export formats, e-mail alerts,
KPI and financial reporting?
2. Accessibility & Security
How well does the technology platform enable access
restrictions and flexibility of security concept, accessibility
via web and support of single sign on?
3. Localization & Languages
How well does the technology platform enable the usage of
multiple currencies, multiple regional calendars, multiple
region support and calculation of exchange rate effects?
4. External Interfaces
How well does the technology platform integrate with
other project management tools such as MS Project,
Oracle Primavera, Outlook / LDAP integration, export to
common desktop applications, integration with common
financial applications, common help desk applications,
common requirements management tools, and web-
portals for publication?
5. Modularity & Adaptability
How easy is it configure and/or customize the technology
platform?
6. Document Management
How easy is it for the technology platform to store and
archive documents, workflow integration and standard
interface to document management systems?
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
IMPLEMENTING
“While a high percentage of project profitability is determined at the
bid stage, around half of all projects are not delivered to plan ‒ in
fact, on average, twenty percent of project value is at risk.”
Chakib Bouhdary, Chief Transformation Officer, SAP
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
HOW CAN SAP HELP?
Power Of SAP S4/HANA To Enable Capital Project Management
SAP is positioned to help Oil, Gas & Chemical companies in managing capital projects through our HANA platform. The
following use case highlights how SAP can take a project from Planning to Execution using the Enterprise Project Portfolio
Management Process:
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
Process Stage /
Use Case Step
User Interface
S4/HANA Suite /
Solution Capabilities
Identify
Opportunities
 Submit project proposals
 Follow simplified process with decision
points / gates
 Enter basic project data
 Enter expected timeframe & costs
 Add attachments
 Send for review
Create a Project
Structure the project with
 WBS elements
 Networks
 Network activities
 Milestones
 Progress tracking events
 Schedule activities
 Versions and Simulations
 SAP Enterprise Project Connection
allows customers to integrate with 3rd
party tools such as MS Project, Oracle
Primavera thereby preventing the
need to duplicate efforts
Strategy
Project
Proposal
Project Proposal
Project Process
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
RESEARCH &
DEVELOPMENT
Create Project
Project Plan
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Power Of SAP S4/HANA To Enable Capital Project Management
Process Stage /
Use Case Step
User Interface
S4/HANA Suite /
Solution Capabilities
Conduct Financial
Planning at Project
and Portfolio Level
 High-level financial and capacity
planning
 Roll-up planning on bucket level
 Flexible planning periods
 Distribution functions
 Embedded analytics
 ERP integration
Plan Resource
Requirements and
Costs
Plan project costs and resource demand
 Using flexible excel based user
interface
 Maintain versioning
 Transfer to operative project
 Conduct forecasting
ERP Integration
 Direct creation of project from
portfolio item
 Synchronize attributes and status
between portfolio item / project and
portfolio item decision point / WBS
elements or network activities
 Enhanced financial and capacity data
integration including financial
download options
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
Project
Planning
Project
Planning
Project Level Financial Planning
Portfolio Level Financial Planning
Financial Planning
HOW CAN SAP HELP?
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
FINANCE
Project
Planning
SAP S/4HANA
FINANCE
Resource Management
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Process Stage /
Use Case Step
User Interface
S4/HANA Suite /
Solution Capabilities
Review Material
Shortage
 Review project material requirements
 Review material shortage
 Enter material order
Analytics and
Insights
 Check budget overview
 Check average supplier delivery
performance
 Review detail report
Select Supplier
 Choose best supplier
 Complete material order entry
Power Of SAP S4/HANA To Enable Capital Project Management
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
Procurement
Procurement
Procurement
Material Order Review
Review Shortages
Select Supplier
HOW CAN SAP HELP?
SAP S/4HANA
SOURCING &
PROCUREMENT
SAP S/4HANA
SOURCING &
PROCUREMENT
SAP S/4HANA
SOURCING &
PROCUREMENT
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Process Stage /
Use Case Step
User Interface
S4/HANA Suite /
Solution Capabilities
Execute Change
Requests and
Identify Issues
Using S4/HANA Workflow and Analytics
 Identify project issues
 Create and execute project changes
 Conduct cost impact assessment
Identify Risks
Using S4/HANA Workflow and Analytics
 Identify risks
 Conduct financial impact of risk
 Conduct risk scoring
 Review and agree on risk mitigation
approach
Engineering
Management
Central platform enabling systems
engineering and mechatronics
 Engineers single user interface
 Create bill of materials
 Central access point to all data
 Platform for integrating design tools
MCAD/ECAD. Multi-CAD PMI Support
 Technical data package (TDP)
publishing
 Visual work instructions and
procedures
Power Of SAP S4/HANA To Enable Capital Project Management
Execution
Execution
Execution
HOW CAN SAP HELP?
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
Create Change Requests
Issue Management
Risk Management by Project
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
RESEARCH &
DEVELOPMENT
Manage Engineering Drawings
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Process Stage /
Use Case Step
User Interface
S4/HANA Suite /
Solution Capabilities
Review and
Confirm
Contingent Labor
Using SAP Fieldglass
 Create, distribute and interview
candidates
 Create and activate work order
 Contractors submit time and
expenses; organization pays and
exports to accounts payable
Onboard, Train
and Retain Capital
Project Skilled
Workforce
Using SAP SuccessFactors manage
 Employee through one tool
 Create and track performance goals
and compensation
 Hire, onboard and retain talent
 Provide a platform for learning
 Conduct workforce planning and
analytics
Submit and
Review Travel and
Expenses
Using SAP Concur manage
 Travel – book anytime, anywhere on
convenient web and mobile
applications
 Expense – get visibility from receipt
capture to reimbursement. Manage
expenses anytime, anywhere
 Invoice – Validate spend before
it happens. Capture all spend
via paper and electronic invoices. Pay
vendors on your schedule. Maximize
supplier savings
Power Of SAP S4/HANA To Enable Capital Project Management
Execution
Execution
Execution
HOW CAN SAP HELP?
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
SAP S/4HANA
HUMAN RESOURCES
SAP S/4HANA
SOURCING &
PROCUREMENT
SAP S/4HANA
SOURCING &
PROCUREMENT
Book Travel
Claim Expenses and Pay Invoice
Manage Employees
Review Labor Shortage
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
Process Stage /
Use Case Step
User Interface
S4/HANA Suite /
Solution Capabilities
Monitor Individual
Project
Using S4/HANA Workflow and Analytics
 Compare planned, forecasted and
actual values
 Review individual projects and view
detailed project information
 Drilldown into financial documents
 Conduct milestone trend analysis
Monitor Portfolio
of Projects
Monitor portfolio of projects
 Using dashboards and KPIs
 Set alerts for budget, schedule,
staffing, risk etc.
 Review planned vs. actuals
 Aggregate information on various
portfolio levels
 Reporting layout can be designed by
business user
Monitor Projects
at a Company’s
Board Of Directors
Level
Monitor portfolio of projects at Board
level using SAP’s Digital Boardroom
application
 One experience and one view of your
business
 Use Board of Directors agenda topics
to view reports and gain insights real-
time
Power Of SAP S4/HANA To Enable Capital Project Management
MonitoringStrategy
Project
Proposal
Project
Planning
Procurement Execution1 2 3 4 5
Enterprise Project Portfolio Management Process
HOW CAN SAP HELP?
Monitoring
Monitoring
Monitoring
Fiori based Project dashboard
Portfolio Review
Digital Boardoom
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
RESEARCH &
DEVELOPMENT
SAP S/4HANA
ENTERPRISE
MANAGEMENT
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SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
HOW CAN SAP HELP?
Solution Suite
The above use case highlights how SAP’s S4/HANA solution suite utilizes the digital core to:
SAP S4/HANA is able to the execute on the above by using our solution offerings that touches on every aspect of an
organization’s line of business:
Immediate
Business
Empower users doing business with insights to act in the moment – anywhere,
anytime
Intelligent and
Smart Business
Provide an user with predictive suggestions and simulations based on pattern and
analysis to deliver the right information, product, service or action at the right time
Improved
Data Quality
Provide an user with data that is enriched by digital capabilities and IoT (Internet of
Things)
Integrated and
Connected Business
Allow an organization to be fully connected to the consumer, customers, suppliers
and workforce
SAP Solutions for
Capital Project Management
Key –
SAP S/4HANA
MARKETING AND
COMMERCE
SAP S/4HANA
HUMAN RESOURCES
SAP S/4HANA
MANUFACTURING
SAP S/4HANA
SUPPLY CHAIN
SAP S/4HANA
SALES
SAP S/4HANA
FINANCE
SAP S/4HANA
SERVICE
SAP S/4HANA
SOURCING &
PROCUREMENT
SAP S/4HANA
ASSET
MANAGEMENT
SAP S/4HANA
RESEARCH &
DEVELOPMENT
TheDigitalCore
TheDigitalCore
Enterprise Management
Streamlined
Procure to Pay
Accelerated Plan to
Product
Optimized Order
to Cash
Enhanced
Request to
Service
HR
Connectivity
Core Finance
- 24 -
SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
HOW CAN SAP HELP?
Customer Successes
Dow's diversified industry-leading
portfolio of specialty chemical,
advanced materials, agrosciences
and plastics businesses delivers a
broad range of technology-based
products and solutions to
customers in approximately 160
countries and in high growth
sectors such as electronics, water,
energy, coatings and agriculture.
 Integrated SAP Project System
and Primavera
 Delivered tailored configuration
with only 200 service hours
 Legacy customer of solution –
co-development effort that
forms the basis of the existing
out of the box routine
maintenance and STO solution.
 Participated in EPC 2.0
customer Validation and Ramp-
up
GenOn Energy, Inc. (NYSE: GEN) is
one of the largest competitive
generators of wholesale electricity
in the United States. With power
generation facilities located in key
regions of the country and a
generation portfolio of
approximately 22,000 megawatts,
GenOn is helping meet the nation’s
electricity needs.
 Integrated SAP Project System
and Primavera to support
Routine Plant Maintenance and
Turnaround
 Legacy customer of solution that
migrated to the SAP Enterprise
Project Connection 2.0 , as well
as enhancing workflows to
support additional Plants.
 Participated in Ramp Up and is
now live on SAP Enterprise
Project Connection 2.0 as of
September 2012.
BCHydro operates 31 hydroelectric
facilities and three thermal
generating plants, totaling 12,000
megawatts (MW) of installed
generating capacity. Our
hydroelectric facilities provide over
95 per cent of the total electricity
we generate and are located
throughout the Peace, Columbia
and Coastal regions of B.C. Our
three thermal generating plants
provide the remaining electricity
generation.
 Integrated SAP Project System
and Primavera
 Legacy customer of solution that
migrated to the SAP Enterprise
Project Connection 2.0 platform,
as well as enhancing kflows to
support additional Business
scenarios.
 Solution working in production 4
months from contract signature
“Between F2008 and 2012, BC Hydro’s investment in capital projects is planned to grow by 84%.
Accompanying this growth is increasing project complexity, project interdependence and increased reporting
requirements to stakeholders. Confero from *SOALogix was chosen after proven out of the box capability and
we were able to move to production within four months after contract signature.”
Bryan Baker
Project Owner
BCHydro
“
* SOALogix acquired by SAP in December, 2009
- 25 -
SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
HOW CAN SAP HELP?
Customer Successes
IESA is a leader in the Construction
of Oil and Gas assets. Its objective
was to simplify, centralize and
collaboratively master the complex
project of six vessels. It undertook
the construction of six floating
production, storage and offloading
vehicles and turned to SAP for a
solution to meet the objectives
while complying with international
regulations for complex, ultra deep
offshore oil and gas production.
 Implementation of a 3D HTML5
application and integration with
ERP backend within 5 months
 Visual context for a
heterogeneous IT Landscape
 Better collaboration between the
EPC areas by visualizing
engineering and business data in
3D
CS Energy is a Queensland
Government owned energy provider
with a unique mix of technology and
an innovative approach, powered by
experienced, skilled and talented
people.
 Integrated SAP Project System
and Primavera
 Delivered tailored configuration
in support of Capital Project
management
Transfield Services is an
operations, maintenance and
construction services business,
operating globally in the resources,
energy, industrial, infrastructure,
property and defense sectors.
 Integrated SAP Project System
and Primavera
 Partner delivered tailored
configuration in support of
service delivery business.
“I transferred all of my GCN3 outage orders from SAP to Primavera. I
transferred 234 work orders with a total of 328 operations. SAP
Enterprise Project Connection (EPC) streamlined processing and saved
me at least a good 2 days of data entry in Primavera.”
Chad Hufnagel
Maintenance Services Planner
RRI Energy, Inc.
“
“Having a seamless interface that was scalable, supportable with future Primavera upgrades and readily re-
configurable as infrastructure, applications and business workflows evolved was crucial in selecting
SOALogix* as our partner.”
John Long
System Analyst Global Refining, Pascagoula MS
Chevron Corporation
“
* SOALogix acquired by SAP in December, 2009
- 26 -
SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
TRANSFORMING
Final Thoughts
“Today’s employees and consumers are networked and on the
move. Great products alone are no longer enough to earn their
loyalty. Businesses have to provide a next-generation experience,
tailored completely to the individual. SAP is driven by a relentless
passion to help our customers innovate to win. We deliver the
industry solutions and the real-time platform for enterprises to
run like never before.”
Bill McDermott, Chief Executive Officer, SAP
- 26 -
SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
- 27 -
SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
FINAL THOUGHTS
In summary, implementing SAP’s S4/HANA Capital Project Management solution allows an organization to:
1. Provide visibility into the decision making process while ensuring alignment to corporate strategy
2. Provide for one central project repository
3. Replace disconnected solutions through a consolidated work environment thereby reducing total cost of ownership
4. Ensure that project and portfolio Management is integrated into other business processes (Finance, Procurement,
Human Resources, Sourcing and Procurement and Engineering Management) in the ERP as part of the solution
5. Help establish project governance and control projects from idea to project execution to operations and
6. Streamline the reporting generation process and improve data quality by eliminating manual steps through a real time
reporting environment
SAP’s vision is to help the world run better and improve people’s lives. We remain focused on the success of our customers
as they are at the heart of our ambitions. We recommend that companies that are strongly considering implementing
Capital project management to engage with us by leveraging our Value Engineering approach to identify use cases, build a
business case for change and execute on a proof of concept to see how SAP can help organizations provide greater
shareholder value on current of future capital investments.
National Oil Companies
Oil Field Services
Midstream & Refining Downstream & Retailing
Integrated Majors
Exploration & Production
The Oil, Gas & Chemicals Industry repeatedly chooses SAP as their strategic partner.
- 28 -
SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
www.sap.com/contactsap
SAP Statement of Confidentiality and Exceptions
The information in this presentation is confidential and proprietary to SAP and
may not be disclosed without the permission of SAP. This presentation is not
subject to your license agreement or any other service or subscription
agreement with SAP. SAP has no obligation to pursue any course of business
outlined in this document or any related presentation, or to develop or release
any functionality mentioned therein. This document, or any related presentation
and SAP's strategy and possible future developments, products and or platforms
directions and functionality are all subject to change and may be changed by
SAP at any time for any reason without notice. The information in this document
is not a commitment, promise or legal obligation to deliver any material, code or
functionality. This document is provided without a warranty of any kind, either
express or implied, including but not limited to, the implied warranties of
merchantability, fitness for a particular purpose, or non-infringement. This
document is for informational purposes and may not be incorporated into a
contract. SAP provides this information as guidance only to illustrate estimated
costs and benefits of the predicted delivery project. These materials may be
based upon information provided by you, information provided by other
companies and assumptions that are subject to change. These materials present
illustrations of potential performance and cost savings, and do not guaranty
future results, performance or cost savings. SAP assumes no responsibility for
errors or omissions in this document, except if such damages were caused by
SAP´s willful misconduct or gross negligence.
All forward-looking statements are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates, and they should not be relied upon in making
purchasing decisions.
© 2017 SAP SE or an SAP affiliate company. All rights reserved (01/17).
No part of this publication may be reproduced or transmitted in any form or for any purpose without
the express permission of SAP SE or an SAP affiliate company.
SAP and other SAP products and services mentioned herein as well as their respective logos are
trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other
countries. Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for
additional trademark information and notices. Some software products marketed by SAP SE and its
distributors contain proprietary software components of other software vendors.
National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only,
without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be
liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP
affiliate company products and services are those that are set forth in the express warranty
statements accompanying such products and services, if any. Nothing herein should be construed as
constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business
outlined in this document or any related presentation, or to develop or release any functionality
mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated
companies’ strategy and possible future developments, products, and/or platform directions and
functionality are all subject to change and may be changed by SAP SE or its affiliated companies at
any time for any reason without notice. The information in this document is not a commitment,
promise, or legal obligation to deliver any material, code, or functionality. All forward-looking
statements are subject to various risks and uncertainties that could cause actual results to differ
materially from expectations. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of their dates, and they should not be relied upon in making
purchasing decisions.
Authors:
Ashwin Menon
Industry Value Advisor Expert
Ashwin.menon01@sap.com
Adam Duran
Solutions Management – Enterprise Portfolio and Project
Management and 3D Visual Enterprise
adam.duran@sap.com

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Connected Project Management in the Oil, Gas & Chemicals Industry

  • 1. - 1 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Connected Project Management in the Oil, Gas & Chemicals Industry Defining the digital future of capital projects
  • 2. - 2 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Executive Summary 3 Challenges In The Oil, Gas & Chemicals Industry 4 Capital Project Management Overview What Is Capital Project Management? What Are Some Of The Leading Practice Reports and Dashboards? What Value Would An Organization Derive From An Implementation? How Does An Organization Decide Which Technology Platform To Use? 5 6 10 13 14 How Can SAP Help? Power Of SAP S4/HANA To Enable Capital Project Management Solution Suite Customer Successes 16 17 23 24 Final Thoughts 27 TABLE OF CONTENTS
  • 3. - 3 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved EXECUTIVE SUMMARY The Digital Project Revolution Oil, Gas & Chemicals is a capital intensive industry that has as a fundamental business requirement to increase project profitability for all capital projects. Why? Most companies are experiencing: 1. Increasing shareholder expectations and compliance requirements 2. A higher than acceptable rate of project budget overruns, delays, and even project failures 3. Increasing project complexity and shortening of delivery dates for projects 4. An increasing level of fragmented process and data management The most effective approach to achieving this requirement of increased project profitability is by gaining improved insight and control and optimized process efficiency within each of the capital projects and across the investment portfolio. This approach also drives a reduction in project risk through improved transparency and data consistency. As a result, each capital project team is able to achieve better quality and faster response times enabled via enhanced process standardization and flexibility. SAP is committed to partnering with its customers as they transform into digital Oil, Gas & Chemical companies by helping: 1. Reimagine business models to find new revenue and profit sources by offering innovative approaches to addressing market challenges 2. Reimagine business processes and use digital technology to optimize business outcomes by converging information and operational technologies 3. Reimagine the role and structure of the workforce to support future business by incorporating wearable technology, 3D printers, and geospatial technologies Our vision is to help the Oil, Gas & Chemicals industry digitally transform in order to drive profitable growth, build customer intimacy and grow talent. This document offers our point of view on how Capital Project management must be implemented, how SAP can help and some of the leading practices we have seen. MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process Technology Platform Project Management
  • 4. - 4 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CHALLENGES IN THE OIL, GAS & CHEMICALS INDUSTRY The New Normal There are 5 major trends that we see in the Oil, Gas & Chemicals industry when it comes to Capital projects: LABOR SHORTAGE There is a greater need for reallocation of work, that considers staffing/sourcing solutions for point or transactional skills thereby releasing scarce talent. This requires a change in operating model related to contingent labor management enabling the active management of the contractor workforce. EVOLVING CONTRACTING MODELS Contracting models that vary depending on scope, location, local content, resource availability (operator and contractor), financing etc. and the use of service intermediaries to support vendor management, contract management and claims management. GLOBAL PURCHASING POWER High in-country labor costs, skill availability, in-country fabrication capacity and complex technologies have seen a movement towards offshore fabrication and modular development. This manifests itself in the development of an international purchasing organization, low cost country sourcing strategies and distributed development teams. DATA CONSISTENCY Common applications that enable migration of staff between projects and a common application, technical and data architecture supports portfolio and project reporting and decision making. Integration ensures less process handoffs and improves data integrity. FACT BASED DECISION MAKING Tools and decision support centers that enable the visualization of project data for timely decision making and the use of analytics to understand leading and lagging indicators. This capability is enabled through the common toolset and associated data model.
  • 5. - 5 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved REIMAGINING What is Capital Project Management? “To manage their projects, oil, gas and chemicals project professionals today typically use their own spreadsheet-based, custom-developed applications; these fragmented solutions are not connected to corporate systems. As a consequence, project managers often find it difficult to get up-to-date and real-time information on projects, detect project risks, and obtain the current project status. In addition, they tend to spend a great deal of time manually consolidating data from different sources – or be forced to make high-risk decisions based on inaccurate or outdated data.” Ken Evans, Vice President Oil and Gas Industry Business Unit, SAP - 5 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
  • 6. - 6 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Is Capital Project Management? We define Project management as the application of processes, methods, knowledge, skills and experience to achieve the project objectives. Capital Project Management is the foundation on which Business Strategy and Portfolio management sit on. Our definition breaks Capital Project Management down into six interdependent capabilities namely: 1. Project Planning and Execution which is defined as the guiding principles that an organization uses to plan, forecast and execute projects while remaining focused on program goals, addressing appropriate risks and fulfilling stakeholder requirements. 2. Resource Management which is defined as anticipating and capturing resource demand, Sourcing and Procurement Human Resources Project Planning and Execution Engineering Management Resource Management Contract Management Procurement Analytics Supplier Management Invoice and Payables Management Operational Purchasing Workforce Planning Career and Talent Management Scope Management Schedule Management Quality Management Governance Communication Management Cost Management Risk Management Time Management Simulation and Analysis Engineering Data Management Engineering Design Resource Supply and Demand Forecast Resource Assignments Contractor Labor Management Capital Project Management Change Management Project Closeout Enterprise Stage Gate Management Finance and Accounting Knowledge Management Reporting and Visualization assigning the right skilled resources to the right projects and augmenting the project with contractors should there be a shortage of employees. 2. Engineering Management which is defined as the application of engineering principles for the effective planning and efficient operations of managing a project, manufacturing or industrial operations. 3. Sourcing and Procurement which is defined as an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. 4. Human Resources which is defined as the continual process used to align the needs and priorities of the organization with those of its workforce while also maintaining and managing the talent pool. 5. Enterprise which is defined as all the activities that support the management of capital projects from Knowledge Management to Collaboration to Financial Management and Reporting.
  • 7. - 7 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Is Capital Project Management? Each capability contains specific disciplines that need to be mastered. For each of the six capabilities, there are multiple sub- capabilities that make up the process map that support the end to end Enterprise Project Portfolio Management Process as defined by SAP. Sub-Capability Description Governance Defined as the processes, tools and activities that identifies how one can ensure decision making and delivery management are focused on achieving program goals in a consistent manner, addressing appropriate risks while fulfilling stakeholder requirements. Scope Management Defined as all of the services to be provided as a program. Identifies the deliverables, and estimates the risks while establishing clear achievable objectives. Schedule management Defined as the process of developing, maintaining and communicating schedules for time and resource. Cost Management Defined as the processes, tools and activities involved in identifying the program's financial sources and resources, integrating the budget of individual program components, estimating and developing the overall budget for the program and controlling the costs so that the program can be completed within the approved budget. Change Management Defined as the process of requesting, determining attainability, planning and implementing changes to a project (engineering or project change request). Time Management Defined as the process of capturing actual time spent on an activity that is captured in the project plan. This allows one to track actuals vs. forecasts for time spent on completing an activity. Risk Management Defined as the processes, tools and activities that aids in identifying, evaluating, and responding to program risks that are either through internal or external factors. Quality Management Defined as the processes, tools and activities of the performing organization that determine quality policies, objectives and responsibilities so that the program will satisfy the needs for which it was undertaken. Communication Management Defined as the processes, tools and activities for ensuring timely and appropriate generation, collection, distribution, storage, retrieval and ultimate disposition of program information. Project Closeout Defined as the process or activities associated with finalizing the hand off of the project deliverables to the business team and completing the administrative aspects of closing the project. Capability – Project Planning and Execution
  • 8. - 8 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Is Capital Project Management? Sub-Capability Description Resource Supply and Demand Forecast Defined as the process of forecasting the resources required to execute a project, comparing demand against available resources and identifying the resource gaps. Resource Assignments Defined as the process of assigning named resources to a project. Contractor Labor Management Defined as the process of identifying and managing the contractors that are required to execute a project. Capability – Resource Management Sub-Capability Description Engineering Data Management Defined as administration of documents or data related to engineering applications. Engineering Design Defined as the process of devising a process unit to meet desired needs. Simulation and Analysis Defined as the usage of simulation tools that are used for the design, development, analysis and optimization of technical processes such as refineries, chemical plants, power stations, complex manufacturing operations, and similar technical functions. Capability – Engineering Management Sub-Capability Description Operational Purchasing Defined as the activity of supporting the operational purchaser holistically across all buying activities such as finding an appropriate source of supply, processing purchase requisitions, and creating and processing purchase orders. Contract Management Defined as the automated and manual processes for source assignments to operational demands, by using source lists and purchase information records. Capability – Sourcing and Procurement
  • 9. - 9 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Is Capital Project Management? Sub-Capability Description Invoice and Payables Management Defined as the process to create supplier invoices with or without reference to a purchase order; view and instantly correct inaccurate supplier invoices. Supplier Management Defined as the process to classify and manage suppliers using attributes and master data along with the continuous activity of supplier development. Procurement Analytics Defined as the ability of an organization to generate real-time insights into supplier spend, evaluations and scores, and contracts while instantly spotting and addressing gaps in suppliers’ performance in order to prevent the loss of business opportunities. Capability – Sourcing and Procurement (continued) Sub-Capability Description Workforce Planning Defined as the continual process used to align the needs and priorities of the organization with those of its workforce to ensure it can meet legislative, regulatory, service, production requirements and organizational objectives. Career and Talent Management Defined as the process of using strategic human resource planning to improve business value and to make it possible for organizations to reach their goals. Capability – Human Resources Sub-Capability Description Stage Gate Management Defined as a phase-gate model, also referred to as a stage-gate process in which a project is divided into stages or phases, separated by gates. Finance and Accounting Defined as the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. Knowledge Management Defined as the process of creating, sharing, using and managing the knowledge and information of an organization. Reporting and Visualization Defined as the reports and views that will enhance visibility of project status, thus allowing teams to be aware of areas within the project that are on or off track. Capability – Enterprise
  • 10. - 10 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Are Some Of The Leading Practice Reports and Dashboards? Capital Projects can be evaluated countless ways, but companies experience diminishing returns when criterias are redundant and overly complex. The main goal of these reports is to enable decision making with relevant and timely information. Some of the leading practice reports that have been used by companies are: Reports Description Project Status Report Allows decision makers to see how a project is progressing throughout the different stages of a capital project. Scope Management Change Order Status – Identify number of change orders requested for the project. Change Order Impact – Identify costs of change orders requested for the project. Schedule Management Allows decision makers to see how a project is progressing throughout the major activities namely engineering, procurement and construction.
  • 11. - 11 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Are Some Of The Leading Practice Reports and Dashboards? Reports Description Cost Performance Index A measure of the efficiency of expenses spent on a project. Cost performance index (CPI) is the ratio of earned value (EV) over actual costs (AC); therefore, CPI is equal to EV divided by AC. Schedule Performance index Schedule performance index (SPI) is the ratio of the earned value (EV) to the planned value (PV). If the SPI is less than one, it indicates that the project is potentially behind schedule to-date whereas an SPI greater than one, indicates the project is running ahead of schedule. Estimate at Completion (EAC) Estimate at Completion (EAC) forecasts the total effort, from start to finish, to complete a task, and deliver the project based on actual performance to date and project team estimates. Estimate To Complete (ETC) Estimate to Complete (ETC) is the remaining work of the project.
  • 12. - 12 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Are Some Of The Leading Practice Reports and Dashboards? Reports Description Engineering Progress This indicator gives evidence of the progress of engineering activities of a project taking into consideration the ratio between the number of project released deliverables and the related total number of deliverables to be released (e.g. isometrics, P&IDs, etc.) Material Availability Highlights how current supply meets current & forecasted demand by commodity code. Formula - ((Available Supply - (Current + Forecasted demand) )/ Available Supply)*100 Quality Management: Indicator on the percentage or number of non-conformities opened by internal and external audit. Safety Number of days without lost time incident.
  • 13. - 13 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW What Value Would An Organization Derive From An Implementation? By implementing Capital Project management; an organization can realize quantifiable value across the following areas: Value Driver (Source – SAP Performance Benchmarking) Estimated Improvement Ranges Low High Improved capital project proposal approval rate 5% 10% Increased revenue through faster completion of projects 10% 20% Reduced project cost overruns 20% 30% Reduced capital projects management cost 20% 30% Reduced billable revenue from change requests that is rejected by clients 20% 30% Improve user compliance and ease namely Guided End-User buying 5% 10% Increase sourcing savings – better unit price reduction 10% 15% Improve Transactional Procurement FTE Productivity 15% 20% Improve Invoice Receipt and Processing FTE Productivity 15% 20% Improved supplier compliance 5% 10% Improve days payable outstanding 2 days 5 days Reduce cost by improving contingent labor spend under compliance 10% 15% Improve statement of work (SoW) project cost savings through better rate negotiation 10% 15% Reduce Accounts Payable Error Reduction 5% 6% Increase Sourcing Savings by Enhanced Supplier Visibility 10% 15%
  • 14. - 14 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW How Does An Organization Decide Which Technology Platform To Use? Organizations should take a holistic approach when deciding on which technology platform to use. Requirements need to be looked at from two broad categories: 1. Functional and 2. Technical For Functional requirements; there are six categories on which a technology platform need to be assessed on: Functional requirement category Key question(s) to be ask 1. Project Planning & Execution How well does the technology platform support the management of scope, costs, schedule and change management components with respect to executing a project? How well does the tool represent and track (hierarchical) interdependencies? How well does the tool tie a project back to Portfolio strategy? 2. Resource Management How well does the technology platform support resource forecasting, allocation and time tracking? 3. Engineering Management How well does the technology platform support management of engineering information such as P&IDs, CAD models and simulation calculations? 4. Sourcing and Procurement How well does the technology platform allow an organization to source and procure assets globally? 5. Human Resources How well does the technology platform support the talent management and career development of employees assigned to a project? 6. Enterprise Functions How well does the technology platform support the integration with other business functions such as finance and accounting?
  • 15. - 15 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved CAPITAL PROJECT MANAGEMENT OVERVIEW How Does An Organization Decide Which Technology Platform To Use? For Technical requirements; there are six categories on which a technology platform need to be assessed on: Technical requirement category Key question(s) to be ask 1. Reporting How well does the technology platform support the customization of personal and customized dashboards, charts and diagrams, custom reports and report templates, searching and filtering functionalities, save customised reports, multiple export formats, e-mail alerts, KPI and financial reporting? 2. Accessibility & Security How well does the technology platform enable access restrictions and flexibility of security concept, accessibility via web and support of single sign on? 3. Localization & Languages How well does the technology platform enable the usage of multiple currencies, multiple regional calendars, multiple region support and calculation of exchange rate effects? 4. External Interfaces How well does the technology platform integrate with other project management tools such as MS Project, Oracle Primavera, Outlook / LDAP integration, export to common desktop applications, integration with common financial applications, common help desk applications, common requirements management tools, and web- portals for publication? 5. Modularity & Adaptability How easy is it configure and/or customize the technology platform? 6. Document Management How easy is it for the technology platform to store and archive documents, workflow integration and standard interface to document management systems?
  • 16. - 16 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved IMPLEMENTING “While a high percentage of project profitability is determined at the bid stage, around half of all projects are not delivered to plan ‒ in fact, on average, twenty percent of project value is at risk.” Chakib Bouhdary, Chief Transformation Officer, SAP - 16 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
  • 17. - 17 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved HOW CAN SAP HELP? Power Of SAP S4/HANA To Enable Capital Project Management SAP is positioned to help Oil, Gas & Chemical companies in managing capital projects through our HANA platform. The following use case highlights how SAP can take a project from Planning to Execution using the Enterprise Project Portfolio Management Process: MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process Process Stage / Use Case Step User Interface S4/HANA Suite / Solution Capabilities Identify Opportunities  Submit project proposals  Follow simplified process with decision points / gates  Enter basic project data  Enter expected timeframe & costs  Add attachments  Send for review Create a Project Structure the project with  WBS elements  Networks  Network activities  Milestones  Progress tracking events  Schedule activities  Versions and Simulations  SAP Enterprise Project Connection allows customers to integrate with 3rd party tools such as MS Project, Oracle Primavera thereby preventing the need to duplicate efforts Strategy Project Proposal Project Proposal Project Process SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA RESEARCH & DEVELOPMENT Create Project Project Plan
  • 18. - 18 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Power Of SAP S4/HANA To Enable Capital Project Management Process Stage / Use Case Step User Interface S4/HANA Suite / Solution Capabilities Conduct Financial Planning at Project and Portfolio Level  High-level financial and capacity planning  Roll-up planning on bucket level  Flexible planning periods  Distribution functions  Embedded analytics  ERP integration Plan Resource Requirements and Costs Plan project costs and resource demand  Using flexible excel based user interface  Maintain versioning  Transfer to operative project  Conduct forecasting ERP Integration  Direct creation of project from portfolio item  Synchronize attributes and status between portfolio item / project and portfolio item decision point / WBS elements or network activities  Enhanced financial and capacity data integration including financial download options MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process Project Planning Project Planning Project Level Financial Planning Portfolio Level Financial Planning Financial Planning HOW CAN SAP HELP? SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA FINANCE Project Planning SAP S/4HANA FINANCE Resource Management
  • 19. - 19 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Process Stage / Use Case Step User Interface S4/HANA Suite / Solution Capabilities Review Material Shortage  Review project material requirements  Review material shortage  Enter material order Analytics and Insights  Check budget overview  Check average supplier delivery performance  Review detail report Select Supplier  Choose best supplier  Complete material order entry Power Of SAP S4/HANA To Enable Capital Project Management MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process Procurement Procurement Procurement Material Order Review Review Shortages Select Supplier HOW CAN SAP HELP? SAP S/4HANA SOURCING & PROCUREMENT SAP S/4HANA SOURCING & PROCUREMENT SAP S/4HANA SOURCING & PROCUREMENT
  • 20. - 20 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Process Stage / Use Case Step User Interface S4/HANA Suite / Solution Capabilities Execute Change Requests and Identify Issues Using S4/HANA Workflow and Analytics  Identify project issues  Create and execute project changes  Conduct cost impact assessment Identify Risks Using S4/HANA Workflow and Analytics  Identify risks  Conduct financial impact of risk  Conduct risk scoring  Review and agree on risk mitigation approach Engineering Management Central platform enabling systems engineering and mechatronics  Engineers single user interface  Create bill of materials  Central access point to all data  Platform for integrating design tools MCAD/ECAD. Multi-CAD PMI Support  Technical data package (TDP) publishing  Visual work instructions and procedures Power Of SAP S4/HANA To Enable Capital Project Management Execution Execution Execution HOW CAN SAP HELP? MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process Create Change Requests Issue Management Risk Management by Project SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA RESEARCH & DEVELOPMENT Manage Engineering Drawings
  • 21. - 21 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Process Stage / Use Case Step User Interface S4/HANA Suite / Solution Capabilities Review and Confirm Contingent Labor Using SAP Fieldglass  Create, distribute and interview candidates  Create and activate work order  Contractors submit time and expenses; organization pays and exports to accounts payable Onboard, Train and Retain Capital Project Skilled Workforce Using SAP SuccessFactors manage  Employee through one tool  Create and track performance goals and compensation  Hire, onboard and retain talent  Provide a platform for learning  Conduct workforce planning and analytics Submit and Review Travel and Expenses Using SAP Concur manage  Travel – book anytime, anywhere on convenient web and mobile applications  Expense – get visibility from receipt capture to reimbursement. Manage expenses anytime, anywhere  Invoice – Validate spend before it happens. Capture all spend via paper and electronic invoices. Pay vendors on your schedule. Maximize supplier savings Power Of SAP S4/HANA To Enable Capital Project Management Execution Execution Execution HOW CAN SAP HELP? MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process SAP S/4HANA HUMAN RESOURCES SAP S/4HANA SOURCING & PROCUREMENT SAP S/4HANA SOURCING & PROCUREMENT Book Travel Claim Expenses and Pay Invoice Manage Employees Review Labor Shortage
  • 22. - 22 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved Process Stage / Use Case Step User Interface S4/HANA Suite / Solution Capabilities Monitor Individual Project Using S4/HANA Workflow and Analytics  Compare planned, forecasted and actual values  Review individual projects and view detailed project information  Drilldown into financial documents  Conduct milestone trend analysis Monitor Portfolio of Projects Monitor portfolio of projects  Using dashboards and KPIs  Set alerts for budget, schedule, staffing, risk etc.  Review planned vs. actuals  Aggregate information on various portfolio levels  Reporting layout can be designed by business user Monitor Projects at a Company’s Board Of Directors Level Monitor portfolio of projects at Board level using SAP’s Digital Boardroom application  One experience and one view of your business  Use Board of Directors agenda topics to view reports and gain insights real- time Power Of SAP S4/HANA To Enable Capital Project Management MonitoringStrategy Project Proposal Project Planning Procurement Execution1 2 3 4 5 Enterprise Project Portfolio Management Process HOW CAN SAP HELP? Monitoring Monitoring Monitoring Fiori based Project dashboard Portfolio Review Digital Boardoom SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA RESEARCH & DEVELOPMENT SAP S/4HANA ENTERPRISE MANAGEMENT
  • 23. - 23 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved HOW CAN SAP HELP? Solution Suite The above use case highlights how SAP’s S4/HANA solution suite utilizes the digital core to: SAP S4/HANA is able to the execute on the above by using our solution offerings that touches on every aspect of an organization’s line of business: Immediate Business Empower users doing business with insights to act in the moment – anywhere, anytime Intelligent and Smart Business Provide an user with predictive suggestions and simulations based on pattern and analysis to deliver the right information, product, service or action at the right time Improved Data Quality Provide an user with data that is enriched by digital capabilities and IoT (Internet of Things) Integrated and Connected Business Allow an organization to be fully connected to the consumer, customers, suppliers and workforce SAP Solutions for Capital Project Management Key – SAP S/4HANA MARKETING AND COMMERCE SAP S/4HANA HUMAN RESOURCES SAP S/4HANA MANUFACTURING SAP S/4HANA SUPPLY CHAIN SAP S/4HANA SALES SAP S/4HANA FINANCE SAP S/4HANA SERVICE SAP S/4HANA SOURCING & PROCUREMENT SAP S/4HANA ASSET MANAGEMENT SAP S/4HANA RESEARCH & DEVELOPMENT TheDigitalCore TheDigitalCore Enterprise Management Streamlined Procure to Pay Accelerated Plan to Product Optimized Order to Cash Enhanced Request to Service HR Connectivity Core Finance
  • 24. - 24 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved HOW CAN SAP HELP? Customer Successes Dow's diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture.  Integrated SAP Project System and Primavera  Delivered tailored configuration with only 200 service hours  Legacy customer of solution – co-development effort that forms the basis of the existing out of the box routine maintenance and STO solution.  Participated in EPC 2.0 customer Validation and Ramp- up GenOn Energy, Inc. (NYSE: GEN) is one of the largest competitive generators of wholesale electricity in the United States. With power generation facilities located in key regions of the country and a generation portfolio of approximately 22,000 megawatts, GenOn is helping meet the nation’s electricity needs.  Integrated SAP Project System and Primavera to support Routine Plant Maintenance and Turnaround  Legacy customer of solution that migrated to the SAP Enterprise Project Connection 2.0 , as well as enhancing workflows to support additional Plants.  Participated in Ramp Up and is now live on SAP Enterprise Project Connection 2.0 as of September 2012. BCHydro operates 31 hydroelectric facilities and three thermal generating plants, totaling 12,000 megawatts (MW) of installed generating capacity. Our hydroelectric facilities provide over 95 per cent of the total electricity we generate and are located throughout the Peace, Columbia and Coastal regions of B.C. Our three thermal generating plants provide the remaining electricity generation.  Integrated SAP Project System and Primavera  Legacy customer of solution that migrated to the SAP Enterprise Project Connection 2.0 platform, as well as enhancing kflows to support additional Business scenarios.  Solution working in production 4 months from contract signature “Between F2008 and 2012, BC Hydro’s investment in capital projects is planned to grow by 84%. Accompanying this growth is increasing project complexity, project interdependence and increased reporting requirements to stakeholders. Confero from *SOALogix was chosen after proven out of the box capability and we were able to move to production within four months after contract signature.” Bryan Baker Project Owner BCHydro “ * SOALogix acquired by SAP in December, 2009
  • 25. - 25 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved HOW CAN SAP HELP? Customer Successes IESA is a leader in the Construction of Oil and Gas assets. Its objective was to simplify, centralize and collaboratively master the complex project of six vessels. It undertook the construction of six floating production, storage and offloading vehicles and turned to SAP for a solution to meet the objectives while complying with international regulations for complex, ultra deep offshore oil and gas production.  Implementation of a 3D HTML5 application and integration with ERP backend within 5 months  Visual context for a heterogeneous IT Landscape  Better collaboration between the EPC areas by visualizing engineering and business data in 3D CS Energy is a Queensland Government owned energy provider with a unique mix of technology and an innovative approach, powered by experienced, skilled and talented people.  Integrated SAP Project System and Primavera  Delivered tailored configuration in support of Capital Project management Transfield Services is an operations, maintenance and construction services business, operating globally in the resources, energy, industrial, infrastructure, property and defense sectors.  Integrated SAP Project System and Primavera  Partner delivered tailored configuration in support of service delivery business. “I transferred all of my GCN3 outage orders from SAP to Primavera. I transferred 234 work orders with a total of 328 operations. SAP Enterprise Project Connection (EPC) streamlined processing and saved me at least a good 2 days of data entry in Primavera.” Chad Hufnagel Maintenance Services Planner RRI Energy, Inc. “ “Having a seamless interface that was scalable, supportable with future Primavera upgrades and readily re- configurable as infrastructure, applications and business workflows evolved was crucial in selecting SOALogix* as our partner.” John Long System Analyst Global Refining, Pascagoula MS Chevron Corporation “ * SOALogix acquired by SAP in December, 2009
  • 26. - 26 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved TRANSFORMING Final Thoughts “Today’s employees and consumers are networked and on the move. Great products alone are no longer enough to earn their loyalty. Businesses have to provide a next-generation experience, tailored completely to the individual. SAP is driven by a relentless passion to help our customers innovate to win. We deliver the industry solutions and the real-time platform for enterprises to run like never before.” Bill McDermott, Chief Executive Officer, SAP - 26 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved
  • 27. - 27 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved FINAL THOUGHTS In summary, implementing SAP’s S4/HANA Capital Project Management solution allows an organization to: 1. Provide visibility into the decision making process while ensuring alignment to corporate strategy 2. Provide for one central project repository 3. Replace disconnected solutions through a consolidated work environment thereby reducing total cost of ownership 4. Ensure that project and portfolio Management is integrated into other business processes (Finance, Procurement, Human Resources, Sourcing and Procurement and Engineering Management) in the ERP as part of the solution 5. Help establish project governance and control projects from idea to project execution to operations and 6. Streamline the reporting generation process and improve data quality by eliminating manual steps through a real time reporting environment SAP’s vision is to help the world run better and improve people’s lives. We remain focused on the success of our customers as they are at the heart of our ambitions. We recommend that companies that are strongly considering implementing Capital project management to engage with us by leveraging our Value Engineering approach to identify use cases, build a business case for change and execute on a proof of concept to see how SAP can help organizations provide greater shareholder value on current of future capital investments. National Oil Companies Oil Field Services Midstream & Refining Downstream & Retailing Integrated Majors Exploration & Production The Oil, Gas & Chemicals Industry repeatedly chooses SAP as their strategic partner.
  • 28. - 28 - SAP Connected Project Management Whitepaper (02/17) © 2017 SAP SE. All rights reserved www.sap.com/contactsap SAP Statement of Confidentiality and Exceptions The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP provides this information as guidance only to illustrate estimated costs and benefits of the predicted delivery project. These materials may be based upon information provided by you, information provided by other companies and assumptions that are subject to change. These materials present illustrations of potential performance and cost savings, and do not guaranty future results, performance or cost savings. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP´s willful misconduct or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions. © 2017 SAP SE or an SAP affiliate company. All rights reserved (01/17). No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward- looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions. Authors: Ashwin Menon Industry Value Advisor Expert Ashwin.menon01@sap.com Adam Duran Solutions Management – Enterprise Portfolio and Project Management and 3D Visual Enterprise adam.duran@sap.com