In the realm of complex and custom-built products or services—especially in industries like construction, aerospace, engineering, and defense—projects drive business processes. These project-based sales scenarios demand seamless integration between SAP Project System (PS) and SAP Sales and Distribution (SD) to manage customer requirements, order fulfillment, billing, and cost tracking holistically. This article explores the advanced integration between SAP SD and PS for project-based sales, highlighting the architecture, benefits, and best practices.
SAP Sales and Distribution (SD) is the core module that handles the order-to-cash process, including sales order processing, pricing, shipping, billing, and customer relationship management.
SAP Project System (PS), on the other hand, manages project planning, execution, and monitoring. It provides structures like Work Breakdown Structures (WBS), networks, and activities for effective project tracking.
When projects are sold as a combination of products and services, integrating SD and PS becomes crucial for managing revenue, procurement, delivery, and profitability within a single framework.
Sales orders in SD can be assigned to specific WBS elements in PS. This allows each sales item to be mapped to a project task, enabling:
DIP profiles are used to transfer actual costs from PS to SD for billing purposes, especially for resource-related billing. This is vital for services billed based on time and material.
For fixed-price contracts, billing plans can be linked to project milestones. As the project progresses and milestones are achieved in PS, SD triggers billing automatically.
In long-term projects, results analysis in PS allows periodic revenue recognition based on percentage of completion (POC), which is then transferred to SD and FI for financial reporting.
SD deliveries can be driven by project stock or non-stock materials managed in PS. Goods issues update project actual costs and inventory in real time.
Projects that involve engineering custom solutions before manufacturing. Integration ensures:
Projects where each customer contract leads to a distinct manufacturing project. Integration helps:
When services are provided over time, actual effort logged in PS can be transferred to SD via DIP profiles for billing purposes.
With SAP S/4HANA, integration between SD and PS is even tighter, offering:
Advanced integration between SAP SD and PS is essential for organizations running project-based sales. It not only aligns operations with financial processes but also ensures that customer commitments are fulfilled profitably and transparently. With the evolution of SAP S/4HANA, this integration becomes more seamless and insightful, setting the stage for intelligent project-driven enterprises.