In the SAP ecosystem, the Project System (PS) module provides a powerful framework for planning, executing, and monitoring projects. Whether you're managing large-scale engineering projects, customer-specific developments, or internal investment projects, SAP PS offers the tools necessary to handle complex project structures and timelines.
To ensure seamless operations across business processes, SAP PS integrates with several other modules — one of the most critical being SAP Sales and Distribution (SD). This integration is essential when projects involve sales activities, customer deliveries, or billing processes tied to project execution.
Projects often involve customer-specific requirements, which may include:
Without integration, managing these elements manually can lead to inefficiencies, errors, and misalignment between project progress and financial outcomes. By integrating SAP PS with SD, organizations ensure real-time synchronization between project execution and sales processes.
When a customer places an order for a project-based service or product, a Sales Order is created in the SD module. This Sales Order can be linked directly to a project or Work Breakdown Structure (WBS) element in PS. This relationship forms the basis of data flow between the two modules.
Benefits:
In SD, during the creation of a sales order, specific items can be account-assigned to WBS elements in PS. This ensures that revenues and costs are posted directly to the project, allowing accurate financial monitoring and controlling.
Example:
A line item in the sales order is assigned to WBS element "PROJ1-WBS1", so all related billing and delivery costs will be attributed to this WBS in PS.
One of the standout features of this integration is resource-related billing. When actual project costs (e.g., labor, materials) are recorded in PS, the billing process in SD can use this data to generate customer invoices automatically.
This method is especially useful in Time and Material (T&M) contracts, where billing depends on actual work performed rather than a fixed price.
For projects with predefined billing stages, such as long-term engineering or construction contracts, milestone billing plans can be used. In this setup:
This ensures billing aligns with project progress.
When handling project-specific stock (e.g., materials assigned to a project), the delivery process in SD can reference the WBS elements. This allows tracking of goods movement and inventory specifically tied to the project.
To enable integration between SAP PS and SD, several configurations are required:
SAP provides tools such as the Dynamic Item Processor (DIP) to support billing data extraction from PS to SD.
Integrating SAP SD with PS offers tangible benefits, including:
Scenario:
An engineering company receives a customer order to construct a specialized machine. A project is created in PS to manage the design, procurement, and assembly. A sales order in SD references the project and includes milestone billing.
Integration between SAP Project System (PS) and Sales and Distribution (SD) is a strategic capability for project-driven organizations. It bridges operational execution with customer-facing processes, ensuring that project work is accurately reflected in sales orders, deliveries, and billing. As a result, companies achieve better control, transparency, and efficiency across the project lifecycle.