A forecast estimate of the time required to perform a task is a basic necessity for scheduling the project. In SAP SCM project, task might be complete by June 30, 2008. However, if delay occurs, the project manager has to spend additional amount of dollars in indirect costs, such as hiring temporary employees in critical task.
Once the decision is made to terminate the project, the closure must be planned and scheduled, monitored, and controlled-- as if it is a project in its own right. This administrative closure work is carried out in addition to the activities already planned to complete the production of project deliverables. Both these plans need to be monitored and controlled to ensure timely and effective completion of the project. From the following table, activities of SAP project are conducted, and the project needs to be reviewed for evaluating the achievement.
Project Closure Process
Project Audit Process
Management team is suggested to follow up in each process and ensure that the development team is accommodated to the capital resource. When the project is completed, the development team must be available to prevent to delay the implementing process. The human resource department will start to recruit or train new employees before the completion of the project. It takes approximately one month to train a new employee.
The existing facilities will be used to train employees. The project would requests extra funding for any unpredicted situations that would occur.
Budget Estimates for SAP SCM Project
Cost budgeting is the accumulation of all the cost estimates for the project. For the technical projects such as SAP SCM project, the major cost is overhead of people. The project cost baseline also includes estimated expenses for equipment, software and services, communications, and other requirements.
The following table summarizes the SAP SCM project’s costs estimates. The estimated costs were broken down into direct costs: software, hardware, and software back-up costs and direct labor costs. The software system will require the purchase of two servers ($100,000 each) will be configured in a cluster to support the department’s request for redundancy. In addition, back up software for each server is $150,000 direct costs are estimated at $960,000 over six phases of the SAP project. The direct labor costs are estimated at $120,000 needed to complete this project.
Salaries will be paid on a monthly basis, according to the hours worked. Moreover, Project manager has budget for buffer, reserve, and contingency which are estimated at 10% of the total project to reduce or mitigate the negative impact of the risk event or unexpected future. Based on the WBS, total budget is estimated at $1,200,000 over six phases of the project.
SAP Supply Chain Management (SCM) - Time Phased Budget Table
- Software (including configuration and conversion)
- Hardware (two servers at $100,000 each)
- Backup software (two servers at $150,000 each)
- Contingency (10% of total project expense)
Forecasted Project Outcomes
After the SAP SCM project was implemented to Sahapat Corporation, company expected this software transform a company’s linear supply chain into an adaptive supply chain network, in which communities of customer-centric, demand-driven companies share knowledge, intelligently adapt to changing market conditions, and proactively respond to shorter, less predictable life cycles (The Finance Director, 2007). Moreover, the SAP SCM software can synchronize supply to demand—balance push and pull network planning processes. Replenish inventory and execute production based on actual demand. The company can sense and responds with an adaptive supply chain network (Transport Resource, 2006). For example, the processes of drive distribution, transportation, and logistics that are integrated with real time planning processes. The results of SAP implementation are measurable improvements through cost reductions, service-level increases, and productivity gains—ultimately leading to stronger profit margins (SAP, 2006).
Three key learning points
- Identifying appropriate milestones, setting their priorities, and sequencing the activities are very necessary for every projects especially for high-valuable and critical ones. A project manager must ensure that all stages have been fulfilled within acceptable timelines. In addition, he or she should be aware that the right people in the right numbers are assigned to the right activities. A project leader is required to understand overall picture on what the project objectives are, how to minimize time consumption and make cost effectiveness, and how proficiently handle on change management. The more the project managers can move toward a standard work breakdown structure, the easier it is to inculcate risk management practice into the scheduling and execution processes
- Risk management by contingency plan is another learning point from this simulation. If a project manager knows how to mark out and classify potential risks, he or she might analyze and find out effective strategies to mitigate the risk effects. The optimized strategies or contingency plan usually depends on risk exposure and project characteristics so a project manager may make a cost and benefit analysis before making a decision.
- In a business world, some executing projects may operate as joint projects or a part of higher-value projects of their own clients, hence a delay on a project might create huge ramifications to the rest. As project managers, when they are planning a project, they might be worthwhile building in a buffer in their schedule so that unexpected delays can be absorbed within the schedule without much impact to the clients or co-project teams. In case projects do not comply with due date, project managers should discuss to the clients including solutions and work progression to minimize unfavorable consequences.
Projects exist in every sphere of business, markets, segment, and industry.
Projects would come in a myriad types, sizes, and complexity- from small initiatives, medium-size initiatives to mega-projects. Nowadays, project management is no longer special-need management. It is rapidly becoming a standard way of doing business.
Project managers need to communicate with everyone in the company who’s responsible for implementing and reviewing projects. To work effectively, it must enable communicating about a project’s progress, goals, costs, and availability of personnel. In addition, the effective project manager should have skills and a good working knowledge of project management process, and pay attention on risk management plan, which will enhance a project success and a long-term benefit to a corporation.
Nguyen, H., H. (2004). Project of Expansion the Telemetry Two. University of Phoenix.
Retrieved July 21, 2007 from http://www.dragon3d.com/haihonguyen//files/Expansion_Project.pdf
SAP. (2006). SAP GLOBAL. MY SAP SCM. Retrieved July 21, 2007 from http://www.sap.com/solutions/business-suite/scm/index.epx
The Finance Director. (2007). Enterprise Resource Planning Software and Solutions.
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Transport Resource. (2006). Supply Chain Management. Retrieved July 20, 2007, from