Introducing Closed Loop Resource Management

How it works, and why every resource manager needs it

Closed Loop Resource Management

Companies with large project groups do a good job of managing finances, but not so much with their resources.

As a result, too few project managers find themselves running too many projects.

This results in project delays and cost overruns, as well as burnout of the critical project resources.

But, for companies running SAP, there is a very powerful solution that’s been around for over 15 years.

And its been turbocharged by the introduction of Fiori.

Fiori Allows You to See All the Resource Management Transactions in a Single Screen

So what is CLRM and how does it work?

CLRM is a Function of PPM

Every large company has to submit annual capital and expense budgets.

For project-centric organizations with large capital or expense project resource pools, there is the added challenge of ensuring there are sufficient internal and external resources necessary to deliver the projects whose budgets make up the bulk of the intended annual spend.

Too many companies fail to plan their resources as well as they plan their financial budgets, resulting in project delays and overruns; but also annual budget underspend. This combinaton is a very real concern for executives.

Companies have a finite number of project resources, especially those project controls, engineering and technical resources who are well versed in the process and culture within the organization.

When developing the annual plans and budgets, it is important to set the available supply of critical project resources across the project portfolio structure.

SAP PPM Allows You to Set the Available Supply of Critical Project Resources

As new projects get planned alongside existing projects that are underway and staffed, we can quickly determine if our available resources are sufficient or if we need to either start recruitment or delay the start of future projects until resources free-up.

Set Project Resource Demand at a ROM Level to Begin With

SAP PPM allows companies to perform Rough Order of Magnitude (ROM) resource planning to test overall demand against pre-defined supply, and then staff these resources as the project funding is secured. Named resources can be hard or soft booked to project roles , and can be assigned by Project Managers or Resource Managers using specially designed screens.

But that’s not all.

Individuals who do get staffed to project roles will then see these projects automatically appear in their timesheets as either resources or tasks that are linked directly to the assigned WBS element. This improves time entry and cost control and is fully integrated with the PPM solution.

Integrated CATS Timesheet Improves Time Entry and Forecasting

Actual time and cost is collected by the integrated timesheet which then automatically flows-back to PPM via the PS Project.

Actual Time and Cost from CATS Automatically Flows into the PPM Item via the PS Project

Once actual timesheet hours and costs hit the PPM Item, they then roll-up through the portfolio structure so Portfolio Managers can see how their teams are performing against the annual plan.

Actual and Forecast Time and Cost Roll-up Through the Portfolio Structure

Since projects timelines are dynamic, we can see how schedule delays can impact individual project and overall portfolio metrics. You can now see how actual spending compares against the annual budget and adjust on-the-fly.

This is where the loop is closed, and the process rolls-forward into the next quarter / year. CLRM becomes a rolling process, eliminating all the Q2 and Q3 intensity that makes up the typical planning and budgeting cycle.

Portfolio Roll-ups ‘Close The Loop’ And Offer Real-Time Comparison of Budget vs Actual

If you are a Project Manager, Portfolio Manager or Resource Manager and your company runs SAP, you need to realize that things have changed significantly in the years since SAP was implemented at your company. Furthermore, SAP does an even better job managing the annual capital planning and budgeting process thanks to Fiori.

Fiori has truly revolutionized what was already a formidable solution.

If your company is starting its S4HANA upgrade discussions, it’s time to take another look at SAP PPM as your system of record for project and portfolio resource and financial management.

Xytalis have been implementing resource and portfolio management solutions in SAP since these products first arrived in 2005. We are your trusted advisors. Contact us at consult@xytalis.com to set-up a discovery call.