Solution in SAP:

Investment Program Structure:

Investment Management program represents the planned or budgeted costs for the capital investments (or other projects) of an enterprise or corporate group in the form of a hierarchical structure. The hierarchical structure can be defined in any form according to the requirement of the company and is independent of organizational units in the SAP R/3 System (such as, plants, and so on). Investment Management programs are also used for planning and budgeting for individual measures such as:

• Planning of budget

• Administration of budget

• Monitoring of a global budget Appropriation request:

The functions of appropriation request are as follows:

• Appropriation requests serve a similar function as purchase requisitions and maintenance notifications.

• Appropriation requests allow storing investment plans, ideas in the stages before they are actually implemented concretely.

• In the context of capital investment planning, appropriation requests make it possible to include planned investments in cyclical (annual) investment planning using an investment program.

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Project definition will be created after the following pre-requisites are met:

• Project has been approved by Management/Board

• Project has been identified with clear goals

• Project Name, Structure, Start date and Finish date, and Hierarchy of the WBS Elements are identified by project manager after the necessary approval by the management.

Project Definition Creation:

A clearly and unambiguously structured project is the basis for its planning, monitoring, control and success. It forms the basis for organization and coordination in the project. It shows the amount of work, the time required, and the costs involved in the project. Project definition is the binding framework for all organizational elements within a project.

In order to carry out a project in its entirety, the project goals (WBS Elements start and finish date etc) must be precisely described and the project activities to be carried out must be structured. Following are the requirements:

• Overall project start and finish dates are to be defined.

• Determine the Project Objectives (Responsible person, text, etc.).

• After creating project definition the project is to be structured (i.e. finalizing the WBS and WBS Elements) depending on project requirements. Work breakdown structure for the project can be created by using the Work breakdown structure elements. When a project definition is created, a relevant project profile for the project must be assigned.

• The project profile contains default values and parameters for processing the project, for example, which factory calendar is used for time scheduling, organizational values such as controlling area, company code, profit centre and plant or which settings are used for graphics that can be passed on to the WBS elements.

• Values for the project profile are maintained in Project System Customizing. If a work breakdown structure is created, the project profile is saved in the project definition.

• Default settings can be changed from the project profile while working with the work breakdown structure. For example, while creating a project structure for Dagachhu Hydropower Corporation, relevant project profile should be assigned. System will assign organizational units such as controlling area DP01, Company Code DH01, and Plant DA01, from project profile to project definition, WBS elements and Network activities.

Work Break down Structure: The individual levels of the hierarchy in a work breakdown structure enable

elements) in the Project System.

Work breakdown structure in the project can be divided into useful steps i.e., WBS elements by specifying basic dates, the work involved, and estimated project costs. This is the responsibility oriented structure, mainly depending on how one would like to control (e.g.:-costs) and manage (e.g.:- Information) in the project.

The WBS is an important tool, which helps to plan, monitor and control dates, costs, resources and payments. Therefore, the objects where control is required functionally, the same needs to be structured as a WBS, the lowest level representing work packages. It is recommended that a maximum of 3 to 4 level structure is defined for projects with a maximum of 30 to 40 WBS elements, with a standardized structure to represent all DGPC, and DHI projects. It is to be noted that each project should only have one top level WBS element (root WBS element).

The three Operative indicators in PS Module are as follows:

• Planning element

• Account Assignment Element

• Billing Element

Planning element is to be activated if one wants to plan the costs for respective WBS element.

Account assignment element facilitates to post the actual costs to respective WBS element.

Billing element allows posting Revenues to respective WBS element.

It is always recommended:

a) To activate Planning element indicator to All WBS elements in the structure.

b) To activate Account assignment element to the lower most WBS element since it will be easier to track and settle costs. Since it will be easy to operate with planned costs.

c) In case of hydro power projects, the revenue generated during trail run of turbine, electricity will be generated it results revenue has to be adjusted with project cost. The billing indicator of relevant WBS element has to be activated.

Planning and Account Assignment indicator will be defaulted for the projects through customization.

Project Type: Project type in SAP will differentiate one project from another. The following project types have been identified for DGPC

1. Joint venture 2. Own undertaking 3. Grant

The following project types have been identified for DHI

8. DPP (DHI Private Partnership) 9. Others

structure.

During the life of a project, networks are used as a basis for planning, analyzing, controlling and monitoring schedules, dates and resources (such as manpower, machineries, materials, documents and drawings etc.,).

A network consists of Activities, Activity elements and Relationships and graphically displays the relationships dependent on time to illustrate the logical process chain.

The cycle analysis is a function that can be used only in the network structure graphic. A cycle is a closed sequence of relationships and activities ("closed" means that the flow starts from one activity and ends back at the same activity with relationships). If the activity-relationship-activity path is cyclic, the network cannot be scheduled using normal method. In such cases, cycle analysis, a tool that enables to detect cyclic relationships is used to correct them and schedule.

Optional: Activities are given in detail by activity elements. Types of activity elements include internal processing elements, external processing elements, and general costs elements.

All activity elements have a date reference to the activity to which they are assigned.

With respect to DGPC/DHI:

• Program structure will be created in the form of hierarchy to agree with the organizational plan of DGPC/DHI and can be used to manage projects which belong to one controlling area (DGPC or DHI controlling area).

• Appropriation request will be created with reference to the existing node (i.e. Plants or Departments) or to the new node (if the project is not undertaken under existing Plants or Departments) as per requirement. Project proposal document will be attached to Appropriation Request.

• Competent Authority will review the project proposal. Upon approval by DGPC/DHI Management, it will be further submitted to the Board for review and approval. The person delegated by the Competent Authority may approve or reject in the system by updating or confirming the approval or rejection accordingly.

• Upon approval from the Competent Authority, project team will create project structure with all the tasks and check list as activities in the system.

• In case of Hydropower projects, project definition, top level WBS element, will be created.

Before initiating each phase project team will seek approval from the Competent Authority and then the structure of the phase will be created in the system.

• If standard projects are available, it will be copied as operational projects (optional).

• When a project definition is created, a relevant project profile for the project must be

number assigned to the project by following the project coding mask.

• It is proposed to use the following project coding masks for each of the projects handled by DGPC.

Table 4.1.2: Project Coding Mask for DGPC

ID Coding Mask Description

Table 4.1.3: Project Coding Mask for DGPC A Project identifier

B First 2 digits represent the kind of project Infrastructure

Second 2 digits represent the year in which project has started Third 2 digits represent serial number of the project in that year C Level 2 WBS element

D Level 3 WBS element E Level 4 WBS element F Level 5 WBS element G Level 6 WBS element

DP-000000-00-00-00-00-00 A B C D E F G

Table 4.1.4: Project Coding Mask for DHI A DHI projects

B First 2 digits represent Industry sector Industry Sector Key:

08 = Infrastructure and Real Estate 09 = Internal

99 = Others

Second 2 digits represent the year in which project has started Third 2 digits represent serial number of the project in that year C Level 2 WBS element project. Using PS, a project can be structured in two ways i) work break down structure and ii) Networks and activities. Both of these are described briefly below.

• If project structure is copied from standard project or simulation version, structure can be modified as per requirement.

• If any task or item in the checklist is not existed in the structure, those can be created as activities.

• If any task involves work and cost, quantity of work, relevant work center will be maintained in the activity.

• If task is related to service provider, service activity will be maintained and relevant services from the model services can be copied.

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Figure 4.1.1: Sample structure Project