Projects:Project Profitability Review/Functional Specification
Project Profitability Review - Functional Specifications
Overview
Purpose
Review of the whole process of project profitability tracking and reporting.
Scope
This project will
- review the current functionality,
- define and prioritize the areas of improvement,
- and develop enhancements
for the business processes of
- project budgeting (expenses limitation),
- project revenues and expenses planning,
- project revenues and expenses tracking,
- project profitability tracking
- and project profitability reporting.
Current functionality
Project budgeting (expenses limitation)
- User story
- Sarah, the project manager, is launching a new project of type Software consultancy.
- She creates a new multiphase project and sets its project type to Software consultancy.
- Since she already defined in the project template (type) the limited expenses (budget) per product, those are copied into the project.
- She can modify (increase or decrease) those expenses limitations per product in order to better fit the project needs.
- Business process
- Sarah has defined previously the expenses limits for the Software consultancy project type.
- She goes to Project Type window (Project & Service Management || Setup || Project Type) and selects Software consultancy record.
- Inside Standard Budget tab, she fills a line per each product that she wants the expense to be limited, recording the limit amount.
- Sarah opens a new multiphase project (Project & Service Management || Transactions || Multiphase Project) and sets its project type to Software consultancy by clicking, Set Project Type button.
- When setting the project type, the pop-up window offers her the possibility to Copy Standard Budget (expenses limits) or not. She ticked the check-box in order to copy the expenses limits.
- She then enters Project Budget tab and modifies/removes/adds some of the expense limits for the current multiphase project.
- Sarah has defined previously the expenses limits for the Software consultancy project type.
Project revenues and expenses planning
- User story
- Sarah, the project manager, makes some estimations on project revenues and expenses based on her experience in previous projects of the same type.
- For this, she queries the real revenues and expenses of the previous projects of the same type in order to make a more accurate estimation.
- She records those estimated/planned data in the project header. But she can not:
- Detail those revenues and expenses per product/concept.
- Copy automatically these revenues and expenses estimations from a project template (project type).
- Business process
- Sarah reports project profitability (Project & Service Management || Analysis Tools || Project Profitability) with Project Type filter equals to Software Consultancy and looks for the following data:
- Real service revenue.
- Real cost.
- Real reinvoiced expenses.
- Real expenses.
- With this information of previous projects of the same type, she fills in the project header the following fields (Project & Service Management || Transactions || Multiphase Project):
- Service Revenue: estimated (planned) revenues for the services (products with product type = services) provided during the project.
- Service Cost: estimated cost of providing those services, that is, the cost of the human resources involved in providing those services.
- Service Margin %: estimated profitability margin for the services provided during the project. Many times one is not concerned about the net amounts of revenues and expenses but about the final profitability margin in %.
- Planned Expenses: estimated expenses in collateral goods or services (taxis, hotels, meals, servers, ...) that happen during the execution and supply of of the services.
- Reinvoiced Expenses: amount of those collateral expenses that we estimate that the customer will accept to be re-billed for.
- Expenses Margin %: estimated balance in % between the collateral expenses and the amount that the customer accepted to be re-billed for. Ideally, this margin would be zero (the customer was re-billed for all the collateral expenses), but is usually negative (we had some expenses that the customer did not accept to pay) and rarely positive (the customer paid us for our expenses more than we spent).
- Sarah reports project profitability (Project & Service Management || Analysis Tools || Project Profitability) with Project Type filter equals to Software Consultancy and looks for the following data:
Project revenues and expenses tracking
- User story
- Sarah would like to daily know which is the status of revenues and expenses of the project she is managing. In detail she would like to have:
- The total amount of revenues of the project so far (total amount of completed sales invoices associated to this project).
- Compare this amount to the planned revenue that she was expecting showing, for instance, the % of completion.
- She was expecting (she planned) to make a $120.000 revenue for this project.
- The real revenues of the project so far are $90.000.
- The % of completion of the revenue plan is 75% (75% of the revenue plan reached).
- This number appears in orange (0% to 50% - red; 50% to 80% orange; 80% to 100% and over: green; these percentages should be configurable by the user).
- The total amount of service revenues of the project so far (total amount of completed sales invoices associated to this project for products with product type = service).
- Compare this amount to the planned service revenue that she was expecting showing, for instance, the % of completion.
- The total amount of re-invoiced revenues of the project so far (total amount of completed sales invoices associated to this project for expenses which have been re-billed to the customer).
- Compare this amount to the planned re-invoiced revenue that she was expecting showing, for instance:
- The % of completion (planned vs real).
- Net amount for completion (planned - real).
- She would also have all this information for the expenses in order not to exceed the planned expenses:
- Total amount of expenses so far.
- Planned amount of expenses.
- Total cost (man/hours) so far.
- Planned cost.
- Total collateral expenses so far.
- Planned collateral expenses.
- Besides, she is also interested in comparing real expenses with budgeted expenses.
- She would also like to have this real revenue/expenses vs planned revenue/expenses and real expenses vs budgeted expenses information per product/concept.
- She would also like to have some alerts related to the items listed above:
- To be informed when 90% (percentage should be configurable by the user) of planned revenue is reached.
- To be informed if budgeted expenses have been surpassed.
- Sarah would like to daily know which is the status of revenues and expenses of the project she is managing. In detail she would like to have:
- Business process
- Nowadays Sarah can only use the project profitability report (Project & Service Management || Analysis Tools || Project Profitability) where she can only track the following information per project:
- Planned services revenue.
- Real service revenue.
- Planned cost.
- Real cost.
- Planned reinvoiced expenses.
- Real reinvoiced expenses.
- Planned expenses.
- Real expenses.
- She has no:
- % information of completion (planned vs real).
- Net information of completion (planned - real).
- Detailed information per concept/product.
- Nowadays Sarah can only use the project profitability report (Project & Service Management || Analysis Tools || Project Profitability) where she can only track the following information per project:
Project profitability tracking
- User story
- Sarah would like to be informed daily about the profitability of the projects that she is managing. Actually she would like to:
- Know how much the project has to collect to reach the planned profitability.
- She has planned a 8% of profitability for the Software consultancy project.
- The project total revenues so far are $70.000.
- The project total expenses so far are $65.000.
- The current project profitability is 7.14%.
- The extra revenues to reach the planned 8% profitability is $652 (the project has to reach a $70.652 revenue, keeping the same expenses).
- Be informed (alerted) when:
- A project becomes profitable (total revenues > total expenses).
- A project surpasses a certain profitability.
- Business process
- Nowadays, Sarah can only report project profitability (Project & Service Management || Analysis Tools || Project Profitability) where she is informed about:
- Planned services profitability (margin) in %.
- Real services profitability (margin) in %.
- Planned expenses profitability (margin) %.
- Real expenses profitability (margin) %.
- Planned project profitability in net amount.
- Planned project profitability (margin) in %.
- Real project profitability in net amount.
- Real project profitability (margin) in %.
- Nowadays, Sarah can only report project profitability (Project & Service Management || Analysis Tools || Project Profitability) where she is informed about:
Project profitability reporting
- User story
- Once the Software consultancy project is over, has to present a project profitability report to her superior. She has to inform about:
- The whole project profitability.
- The profitability of each of phases and tasks of the project.
- The detailed revenue and expenses per concept/product in an Excel like way so she can make some calculations.
- The profitability of each of the concepts/products that were involved into the project.
- The planned revenues and expenses versus the real ones for each of the products/products that were involved into the project.
- The real expenses versus the budgeted ones in order to see whether the budget has been surpassed.
- Once the Software consultancy project is over, has to present a project profitability report to her superior. She has to inform about:
- Business process
- Nowadays, Sarah can only report the whole project profitability (Project & Service Management || Analysis Tools || Project Profitability) where she is informed about:
- Planned services profitability (margin) in %.
- Real services profitability (margin) in %.
- Planned expenses profitability (margin) %.
- Real expenses profitability (margin) %.
- Planned project profitability in net amount.
- Planned project profitability (margin) in %.
- Real project profitability in net amount.
- Real project profitability (margin) in %.
- Nowadays, Sarah can only report the whole project profitability (Project & Service Management || Analysis Tools || Project Profitability) where she is informed about:
Areas of improvement
Areas of improvement of project budgeting (expenses limitation), project revenues and expenses planning, project revenues and expenses tracking, project profitability tracking and project profitability reporting are listed and prioritized at Project Profitability Review - Areas of improvement spreadsheet. They are sorted descendantly by Requirement score column: higher functional impact with lower difficulty.
Any feedback is welcome at the project forum.
Design Considerations
Dependencies
Functional Requirements
User Roles & Profiles
The Management team is responsible for doing all kind of project related activities. Mainly they have to,
- * Project Budget.
- * Plan the project(With Expected revenues & Expenses).
- * Track the revenues & expenses till end.
- * Track the profitability of the project.
- * Report the profitability of the project.
Business process definition
The following five basic steps are involved in this process.
Project Budgeting
- Budgeting is the initial step for getting into the project.For creating budget, a project manager has to know all relevant details before stating. He needs to create a project template(Project Type), which shows all phases and tasks involved in this process.He has to budget for all phases/tasks by, concept by concept(Product).
- He needs to define all details in template,so that he can create a budget for all process.He can take previous inputs for creating budget.Budget includes all revenues,expenses and reinvoiced amount.Mainly this phase is for limiting the expenses.
Project Revenues and Expenses Planning
- Based on the project template, manager has to to create plan for starting the project.He can use already developed templates for creating any project, can split the project as different phases,can split phases into many tasks.To complete a project, they has to complete phase by phase or task by task. Manager has to create a budget for all phases/task.
- Manager has to create project with template(Project Type),with all phases and tasks. In all levels he can add/remove any details. He can add product in all levels, so that can able to view cash levels for all product by product(For reporting).He has to derive Service Revenue,Service Cost,Planned Expenses and Reinvoiced Expenses,and has to enter in project header level.
Project Revenues and Expenses Tracking
- This process is for comparing the planned amount and real amount in order to track the project completion.Colors can be set to differentiate the process levels.A manager can track all expenses and revenues, product by product. There is a limitation for expenses for all products.If it exceeds, a alert will be raised to control outflows.Different alerts can be set in order to know the expenses level.A separate process window is for referencing all details relevant to all transactions against project.
- Expense & Revenues relevant reports are used to show/track the current expense levels for each product.
Project Profitability Tracking
A manager is responsible for tracking the profitability of the project.He should be aware of,
- * Planned services profitability (margin) in %.
- * Real services profitability (margin) in %.
- * Planned expenses profitability (margin) %.
- * Real expenses profitability (margin) %.
- * Planned project profitability in net amount.
- * Planned project profitability (margin) in %.
- * Real project profitability in net amount.
- * Real project profitability (margin) in %.
The above details can be tracked for each project,phase,task or product. Alerts can be set in order to track profitability levels.For Eg. a alert will be raised if profit exceeds some percentage.Document process window is for tracking all details with transactions.Reports relevant to expenses/revenues and profitability are useful for Project profitability tracking.
Project Profitability Reporting
Manager has to report the profitability of the project.He should report the same details that he has tracked.
- * Planned services profitability (margin) in %.
- * Real services profitability (margin) in %.
- * Planned expenses profitability (margin) %.
- * Real expenses profitability (margin) %.
- * Planned project profitability in net amount.
- * Planned project profitability (margin) in %.
- * Real project profitability in net amount.
- * Real project profitability (margin) in %.
The above details can be tracked for each project,phase,task and product.Reports relevant to expenses/revenues and profitability are useful for reporting.These reports showing all values with comparisons.
User stories
Project Budgeting
- Sarah, the project manager, is launching a new project of type Software consultancy.
- She creates a new multiphase project and sets its project type to Software consultancy.
- Since she already defined in the project template (type) the limited expenses (budget) per product, those are copied into the project.
- She can modify (increase or decrease) those expenses limitations per product in order to better fit the project needs.
Project Revenues and Expenses Planning
- Sarah, the project manager, makes some estimations on project revenues and expenses based on her experience in previous projects of the same type.
- For this, she queries the real revenues and expenses of the previous projects of the same type in order to make a more accurate estimation.
- She is creating new project with multiple phases and tasks based on the project template.
- She is defining the project cost,revenues,planned expenses and reinvoiced expenses.
- She can define it for each project/phase/task/product.
Project Revenues and Expenses tracking
- Sarah would like to daily know which is the status of revenues and expenses of the project she is managing. In detail she would like to have:
- The total amount of revenues of the project so far (total amount of completed sales invoices associated to this project).
- Compare this amount to the planned revenue that she was expecting showing, for instance, the % of completion.
- She was expecting (she planned) to make a $120.000 revenue for this project.
- The real revenues of the project so far are $90.000.
- The % of completion of the revenue plan is 75% (75% of the revenue plan reached).
- This number appears in orange (0% to 50% - red; 50% to 80% orange; 80% to 100% and over: green; these percentages should be configurable by the user).
- The total amount of service revenues of the project so far (total amount of completed sales invoices associated to this project for products with product type = service).
- Compare this amount to the planned service revenue that she was expecting showing, for instance, the % of completion.
- The total amount of re-invoiced revenues of the project so far (total amount of completed sales invoices associated to this project for expenses which have been re-billed to the customer).
- Compare this amount to the planned re-invoiced revenue that she was expecting showing, for instance:
- The % of completion (planned vs real).
- Net amount for completion (planned - real).
- She would also have all this information for the expenses in order not to exceed the planned expenses:
- Total amount of expenses so far.
- Planned amount of expenses.
- Total cost (man/hours) so far.
- Planned cost.
- Total collateral expenses so far.
- Planned collateral expenses.
- Besides, she is also interested in comparing real expenses with budgeted expenses.
- She would also like to have this real revenue/expenses vs planned revenue/expenses and real expenses vs budgeted expenses information per product/concept.
- She would also like to have some alerts related to the items listed above:
- To be informed when 90% (percentage should be configurable by the user) of planned revenue is reached.
- To be informed if budgeted expenses have been surpassed.
Project Profitability Tracking
- Sarah would like to be informed daily about the profitability of the projects that she is managing. Actually she would like to:
- Know how much the project has to collect to reach the planned profitability.
- She has planned a 8% of profitability for the Software consultancy project.
- The project total revenues so far are $70.000.
- The project total expenses so far are $65.000.
- The current project profitability is 7.14%.
- The extra revenues to reach the planned 8% profitability is $652 (the project has to reach a $70.652 revenue, keeping the same expenses).
- Be informed (alerted) when:
- A project becomes profitable (total revenues > total expenses).
- A project surpasses a certain profitability.
Project Profitability Reporting
- Once the Software consultancy project is over, has to present a project profitability report to her superior. She has to inform about:
- The whole project profitability.
- The profitability of each of phases and tasks of the project.
- The detailed revenue and expenses per concept/product in an Excel like way so she can make some calculations.
- The profitability of each of the concepts/products that were involved into the project.
- The planned revenues and expenses versus the real ones for each of the products/products that were involved into the project.
- The real expenses versus the budgeted ones in order to see whether the budget has been surpassed.
Functional Requirements Based on Business Processes
- Functional requirements can be classified based on the process as below.
Project Budgeting
Requirement 1: Budgeting at a Project Level
Num | Requirement | Importance | Status |
1.1 |
A new tab called 'Project Budget' will be created as a child of 'Multiphase Project' and 'Service Project' tabs. It will have the following fields in the following order (first number indicates the line and second number the position in the line).
| Must have | |
1.2 |
Restrictions:
| Must have |
Requirement 2: Budgeting at a project type level
Num | Requirement | Importance | Status |
2.1 |
A new 'Standard Budget' tab will be created as a child of 'Project Type' tab. It will have the following fields in the following order (first number indicates the line and second number the position in the line).
| Must have | |
2.2 |
Restrictions:
| Must have | |
2.3 |
When setting a project type (clicking 'Set Project Type' button in the project header), one should be allowed to decide whether he wants the standard budget to be copied or not. A new check-box called 'Copy Standard Budget' has to be added to set project type filter window. The check-box will be ticked by default. When clicking 'OK', standard budget lines have to be copied (exactly the same products, attribute set values, quantities, UOMs, amounts and currencies) into the project budget lines. If previous project budget lines were recorded, they have to be maintained. | Must have |
Project Revenues and Expenses Planning
Requirement 1: Review usage of planned expenses and planned revenues
Num | Requirement | Importance | Status |
1.1 |
Multiphase and Service Project windows have fields in Amounts and History panels which fields are calculated by triggers (taking lines or phases and tasks values) and read-only in some cases but not in others. This process has to be modified by the following way, A) Amount panel:
B) History panel:
| Must have |
Requirement 2: Detailed planned revenues and expenses per product at a project level (in % or net)
Num | Requirement | Importance | Status |
2.1 |
A new tab 'Project Planned R&E' will be created as a son of 'Multiphase Project' and 'Service Project' tabs wih the following fields in the following order (first number indicates the line and second number the position in the line).
Product--------------------------------------------------------------------
Planned Quantity-----------------------------------------------------------
Planned Revenue------------------------------------------------------------
Planned Expenses------------------------------------------------------------
Planned Margin------------------------------------------------------------
| Must have | |
2.2 |
Restrictions:
| Must have | |
2.3 |
When adding, updating or deleting planned R&E records, in the header of the Multiphase or Service project the following fields have to be updated,
| Must have |
Requirement 3: Detailed planned revenues and expenses per product at a project type level (in % or net)
Num | Requirement | Importance | Status |
3.1 |
A new 'Standard Planned R&E' tab will be created as a child of 'Project Type' tab. It will have the following fields in the following order (first number indicates the line and second number the position in the line).
Standard Product--------------------------------------------------------------------
Standard Planned Quantity-----------------------------------------------------------
Standard Planned Revenue------------------------------------------------------------
Standard Planned Expenses------------------------------------------------------------
Standard Planned Margin------------------------------------------------------------
| Must have | |
3.2 |
Restrictions:
| Must have | |
3.3 |
When setting a project type (clicking 'Set Project Type' button in the project header), one should be allowed to decide whether he wants the standard planned revenues and expenses to be copied or not. A new check-box called 'Copy Standard Planned R&E' has to be added to set project type filter window. The check-box will be ticked by default. When clicking 'OK', standard planned R&E lines have to be copied (exactly the same products, attribute set values, quantities, UOMs, amounts and currencies) into the project budget lines. If previous project planned R&E lines were recorded, they have to be maintained. | Must have |
Project Revenues and Expenses Tracking
Requirement 1: Project Revenues and Expenses Tracking Report
Num | Requirement | Importance | Status |
1.1 |
In order to track in detail revenues, expenses and budgets, a Project R&E Tracking report is proposed showing the following information.
See mockup at http://spreadsheets.google.com/ccc?key=0AohY6-U9-FFVdElVVnZlV0FzOXhvTExjclp0anV6OGc | Must have | |
1.2 |
It would be nice that colors could show at a glance the "irregular" data (real > planned or real > budgeted). These colors and margins for colors should be configurable by organization / project type / project / business partner / product. | Must have |
Requirement 2: Alerts and restrictions based on project plans and budget
Num | Requirement | Importance | Status |
2.1 |
Alerts and restrictions are an useful way to inform about the revenues and expenses evolution. The following are proposed:
| Have Next |
Requirement 3: Completed documents related to the project
Num | Requirement | Importance | Status |
3.1 |
A new read-only tab called 'Project Documents' should be created as son of 'Multiphase project' and 'Service Project' tabs. This tab would be based on a view which will display, per each line:
All the columns will be shown in the grid and in the filter pop-up window. | Have Next |
Project Profitability Tracking
Requirement 1: Alerts based on project profitability (margin)
Num | Requirement | Importance | Status |
1.1 |
Alerts are an useful way to inform about the project profitability. The following are proposed:
| Have Next |
Requirement 2: Real and expected project profitability in header
Num | Requirement | Importance | Status |
2.1 |
In project header it would be useful to directly display the following fields in read-only :
| Have Next | |
2.2 |
Based on the real expenses, 4 new non-mandatory fields would be interesting:
| Have Next |
Project Profitability Reporting
Requirement 1: Detailed project profitability report showing each single expense and revenue per product
Num | Requirement | Importance | Status |
1.1 |
A detailed project profitability report, product per product with the following fields,
See mock-up at http://spreadsheets.google.com/ccc?key=0AohY6-U9-FFVdE8zek1IMHFabmIyeUphWU91U3BjWEE | Must have | |
1.2 |
It would be nice that colors could show at a glance the "irregular" data (real > planned or real > budgeted). These colors and margins for colors should be configurable by organization / project type / project / business partner / product. See feature request https://issues.openbravo.com/view.php?id=4515 | Must have |
User Interface Mockups
This section gives mock-ups for all requirements which have importance like 'Must Have'.
Project Budgeting
Requirement 1: Budgeting at a Project Level
- A new tab called 'Project Budget' will be created as a child of 'Multiphase Project' and 'Service Project' tabs with fields as below, for project budgeting.
Requirement 2: Budgeting at a project type level
- A new 'Standard Budget' tab will be created as a child of 'Project Type' tab with fields as below, for project budgeting.
Project Revenues and Expenses Planning
Requirement 2: Detailed planned revenues and expenses per product at a project level (in % or net)
- A new tab 'Project Planned R&E' will be created as a child of 'Multiphase Project' and 'Service Project' tabs with fields as below,
Requirement 3: Detailed planned revenues and expenses per product at a project type level (in % or net)
- A new tab 'Standard Planned R&E' will be created as a child of 'Project Type' tabs with fields as below,
Project Revenues and Expenses Tracking
Requirement 1: Project Revenues and Expenses Tracking Report
See mockup at http://spreadsheets.google.com/ccc?key=0AohY6-U9-FFVdElVVnZlV0FzOXhvTExjclp0anV6OGc
Project Profitability Tracking
This section does not have requirements which has importance like 'Must Have'.
Project Profitability Reporting
Requirement 1: Detailed project profitability report showing each single expense and revenue per product
Mock-up at http://spreadsheets.google.com/ccc?key=0AohY6-U9-FFVdE8zek1IMHFabmIyeUphWU91U3BjWEE