Planned revenue in fixed price project

[former_member44135]

Dear Expert,

we are deepening the theme s4hana cloud on the lob of professional services.We have a doubt about the management of fixed price projects:

- why the system proposes a revenue and a margin planned on the basis of a  fixed "price list"( the field is not editable)?

- in a fixed price project the revenue is fixed and is determined by the Billing step in the definition of the project: having a planned revenue linked to the price list leads to a recalculation of the revenue at every rescheduling of the effort, and this dosn't meet with business requirements. The revenue shoud be fixed. It seems to be the same behaviour of a Time & Material project. 

- moreover, many analytics work with the planned revenue and not the sales one, and even this aspect is not realistic.

someone has already dealt with these issues or is able to give us support?

Thanks in advance.

Alberto.

[Andrew · Accepted solution]

Hi Alberto,

Ok if I understand you correctly - for your business context you'd like no planned revenue to be considered.

On the 'Work Packages' screen of 'Plan Customer Projects' when you go into the work package if you click the wheel you will be able to add the 'Billing Control Category' (since 1802) and set the line as Non Billable. If you do this the planned revenue is set to zero. Your actual billed revenue continues to be recorded when you generate an invoice.

I don't believe you can hide the planned revenue/margin in this Plan Customer Project app, but you may be able to create a more suitable custom KPI/analytic. Pascal Renet has a nice youtube playlist on that - first video in the series linked here: https://www.youtube.com/watch?v=JiCi_ASVfjs

Regards,

[former_member44135 · Accepted solution]

Hi Andrew,

thank you for your suggestion. I already tried to put the line as not billable and dummy line with a fixed revenue but in this case the total hours are not correct and the systems has a strange behavior in KPI calculation. I'll try with custom KPI.

Thanks a lot

Alberto

[ana_goncalves]

Hi Alberto,

We haven't received any feedback from you for a few months. As such, I have marked andrew.saunders' comment as best answer and closed this question.

Kind regards,

Ana

[eric_hassenberg]

Hi Alberto ... your question is not really clear to me. A fixed price project is often based on a billing plan I assume - what is then recalculated or changed and when?

Eric

[former_member44135]

Hi Tobias,

the idea is correct "This allows to better estimate the 'amount to be billed' that can be proposed to the customer (external view)."

In order to do this in a fixed priced project we should be able to put only one plan value for all the project and not many lines for each roles. It's not a T&M project.This value should be an open field and manually changeble.

Moreover if we change the planned cost effort, the planned revenue should be fixed. It should be have the same behavior of the actual value.

I have attached an example.

Thanks in advace.

[Tobias_Schmidt]

Hey Alberto,

are you referring to the work package screen or also to the project header? As far as I understood, you would like to have the same KPIs that you have on project header level, available on work package level? On project header the system calculates the margin based on the planned costs and the planned revenue (Margin (Planned)) but as well based on the sold revenue (Margin (Sold)). The sold revenue is derived out of the billing tab ('Amount to be billed'). If you now change the effort in the work package but not adjust the 'Amount to be billed' accordingly in the billing item, the overall margin (sold) will change.

The idea behind the fixed condition records (service prices) even for fixed prices, is that you can plan your project and based on the plan values you can create a contract proposal. This allows to better estimate the 'amount to be billed' that can be proposed to the customer (external view).

Best regards,

Tobias

[former_member44135]

Hi Eric,

I'll try to explain better. When i put a line in WP item with a resource role the system calculates:

1) cost value ( from condition record fixed) OK for us

2) planned revenue (from condition record fixed)

The planned revenue dosn't have sense in our business model. In a fixed price project we don't sell a single resource using a fixed rate. We should have only one line with the total price for the project.

This value is the value that we find in billing tab.

The analytics on margin make a comparison between the planned revenue and not with the sold revenue.

Is it possible to hide or to not use this field on the "plan customer project app"? We need to make our statistics(margin in particular) on the sold margin making, for example, a comparison with baseline

I hope it's more clear for you.

Best regards.

Alberto