I have come across various cost Planning methods like: (1) - Easy Cost Planning (2) - Unit Costing (3) - Detailed Cost Planning (4) - Network Costing When do we go for each of these methods, practically. In general implementation, which Cost Planning would be used?
Here is a very brief overview for you:
Easy Cost Planning(ECP) is really Unit Costing with a pretty face (MysapCom).
It is used in Transaction CJ20N (Project Builder) only.
You can set up 'Cost Models' in ECP using Characteristics which can be used
to calculate values and automatically create Cost Plan Line Items - this is
useful for companies who have pre-set planning methods (eg. Planning costs for
building a bicycle, or a chemical test that requires known materials, labour,
services and general costs.). It is a very flexible tool.
An extention to ECP is Execution Services, which allows you to automatically
generate Material Reservations, Purchase Requisitions and Activity Allocations.
Its disadvantages (versus Networks) is that the planned costs are all aggregated
to one WBS (unless you split your WBS's up to reflect the work you are doing -
Labour, Materials, Equipment etc).
Therefore, actual costs hit the WBS itself, not the line-item to which you
planned. Disadvantages of ECP is that it does not distribute planned costs
across time (no distribution rule). Also, there is no scheduling (start-finish,
dependencies). Configuration for ECP is relatively straight forward. Costs for
ECP can be planned against any Plan Version (default is Plan Version 0).
Networks allow you to plan costs via objects called Network Activities. They can
be maintained not only in CJ20N, but also in CJ2D. They are a little more
complex to use, but they allow you to have a networked structure. Each Network
Activity can have planned costs for Work Centre/Activity Type, Stock/Non-stock
Materials, Services and General Costs by Cost Element. Activities can have a
list of Material Components.
Networks will generate Material Reservations and/or Purchase Requisitions
automatically. Configuration can be very complex. All costs for Networks are
sent to Plan Version 0. Distribution of costs across time is supported.
Detailed Cost Planning is used when you simply want to plan your costs via Cost
Elements. You can plan these costs against any Plan Version.
For a quick, easy planning method, ECP cannot be beaten as long as you don't
want complex scheduling.
It is impossible to list all the feature/advantages/disadvantages to the
planning methods in this.
