This discussion is archived
13 Replies Latest reply: Oct 29, 2011 5:11 AM by user12832146 RSS

Difference between contract creation and project creation

HawkerHunter Newbie
Currently Being Moderated
I am new to Oracle Projects. In Oracle Project Contracts I can see that we create a new contract. Also in Oracle Projects we can create a new Project.
Can anyone please let me know what is the difference between creating a contract and creating a project in Oracle Projects.
Can we create a project based on an already created contract?

Regards
  • 1. Re: Difference between contract creation and project creation
    Dina Rotem Guru
    Currently Being Moderated
    Hi

    A project and a contract are two separate entities.
    A project is the place to plan the work, assign resources, develop a budget, collect actual costs, track progress, and generate revenue. A project is a vehicle to manage the execution by the contractor.
    A contract is the commercial agreement between the customer and the contractor. From the contract you allocate funds to the project. Later on you can initiate billing from the contract and the process the billing events on the project when generating the invoices.

    Oracle support many to many relationship between projects and contracts.

    By standard functionality you need to create a project, and then create a contract. On the contract header there is a place to link it to a single project or to a program project. You can then link projects and tasks to the contract lines.

    There is no method to create a project from a contract. However you could develop such customization.

    Dina
  • 2. Re: Difference between contract creation and project creation
    HawkerHunter Newbie
    Currently Being Moderated
    Hi Dina,
    thanks for your reply. We are currently implementing Oracle Projects in our company where our main business is construction works.
    As you have said that a contract is a commercial agreement between the customer and the contractor. We get a Bill of Quantities(BOQ) along with the contract documents. In the BOQ all the different types of works for the project is defined along with the quantities which are known as BOQ Items. We have to quote our rates for the BOQ items. We generally perform an operation called Rate Analysis of these BOQ Items by assigning various quantities of resources that shall be required to execute each of the BOQ items. Thus we arrive at the cost of each BOQ items. Once the work gets executed, this BOQ happens to be the basis for invoicing or application to the client. So we create our budget based on the BOQ itself. We make our Business plan based on the items of this BOQ itself and also book the expenditure on these BOQ items.
    Although we create Project plan using Primavera, there is no one-to-one correspondence between activities of the project plan and the BOQ items. So we cannot really create our budget based on the project plan.
    So if we manage everything only on the basis of the BOQ items, we loose important project management related information like earned value management etc. And if we depent only on the Project plan we loose important cost related information.
    So we need to plan in such a way so that both these are fused together.

    Can you kindly advice me about how to proceed ahead with our implementationso that we can use Oracle Projects optimally for our business.

    Thanks & Regards
  • 3. Re: Difference between contract creation and project creation
    Dina Rotem Guru
    Currently Being Moderated
    Hi

    I think there is no standard functionality that supports your requirements. I will try to suggest a high level solution for you further analysis. You may use Project Contracts as a basis for the BOQ and the rate analysis calculation.
    In OKE you can use document of type proposal, as well as awarded contract document.
    When you get the BOQ from the customer / prospect you might author that a proposal, and enter each item as a separate line. Enter the required quantity of each item at line level, and do not enter a unit price on the line level.
    Add sub lines under the line level and develop the list of resources, quantities and unit prices as sublines for each required resource that is used for the line level item.
    System will calculate the value of each subline and roll it up to the total value of the line. Then it is summarized to the proposal / contract header total lines.

    When you sign a contract with the customer copy the proposal into an awarded contract, and update the scope if needed. enter the needed contract fields, assign it to a project and enter the funding allocation in OKE. The allocated amounts will be interfaced to Projects as agreement and fund lines.
    Later on you could use the contract lines and its deliverables to initiate billing, and generate the project invoices.

    Dina
  • 4. Re: Difference between contract creation and project creation
    HawkerHunter Newbie
    Currently Being Moderated
    Hi Dina,
    thanks for your reply and suggestion. I shall try to follow on those lines.

    Dina, have you ever implemented Oracle Projects in a Construction company, or do you know any one who has implemented Oracle Projects suite in a construction company.

    Thanks & Regards
  • 5. Re: Difference between contract creation and project creation
    Dina Rotem Guru
    Currently Being Moderated
    Hi

    I have never implemented anything in a construction company :(

    Dina
  • 6. Re: Difference between contract creation and project creation
    HawkerHunter Newbie
    Currently Being Moderated
    Then which type of projects based industry does Oracle Projects fits in to?
    And what is meant by OKE.

    Regards
  • 7. Re: Difference between contract creation and project creation
    Dina Rotem Guru
    Currently Being Moderated
    Hi

    Oracle Projects fits for every project oriented industry or project performing department within any company.
    For example -
    IT projects for deveoping software or implementing applications
    New products development
    Scientific or social Reserach
    Aerospace and defence industry
    Media industry, where procusing a movie is a project, producing a TV show is a project,
    Engineering and Construction industry,
    etc.


    OKE is the code of the module Oracle Project Contracts.

    Dina
  • 8. Re: Difference between contract creation and project creation
    HawkerHunter Newbie
    Currently Being Moderated
    Hi Dina,

    now that you have said about so many industry where Oracle Projects fits in, can you just let me know the ideal process flow in a construction company which can nicely or near nicely fit in to Oracle Projects or in other words - the process flow which Oracle expects construction companies to follow to meet their business requirements so that it can be handled by Oracle Projects.

    Regards
  • 9. Re: Difference between contract creation and project creation
    Dina Rotem Guru
    Currently Being Moderated
    Hi

    Try looking at the following links -

    http://www.oracle.com/us/industries/engineering-and-construction/index.html

    http://www.oracle.com/us/industries/engineering-and-construction/043547.html

    http://www.projectp.com/industries/engineering.php

    http://www.projectp.com/products/pdfs/User_Interface_Case_Study_EngrConstruction.pdf

    http://www.deskeng.com/articles/aaawnj.htm

    http://www.constructionsoftwarereview.com/blog/2009/10/14/primavera-p6-contract-management-updated-linked-oracle-erp

    Dina
  • 10. Re: Difference between contract creation and project creation
    HawkerHunter Newbie
    Currently Being Moderated
    Hi Dina,

    those links were quite informative.

    Thanks for all your help. May I know, in what kind of industry do you generally implement Oracle Projects?

    Thanks & Regards
  • 11. Re: Difference between contract creation and project creation
    Dina Rotem Guru
    Currently Being Moderated
    Hi

    I'm with Aerospace & Defence Company.

    Dina
  • 12. Re: Difference between contract creation and project creation
    HawkerHunter Newbie
    Currently Being Moderated
    Hi Dina,

    thats so wonderful. I love the aerospace industry.

    I guess in the aerospace industry they must be quoting for projects. Their clients must also be defining the scope of the work.
    Suppose a contract to make a new plane is awarded, then they must be calculating the budget.

    Once they get the project, they must be creating the work break down structure to make the new plane. They shall probably add activities to the WBS and load them with resources. So they make the budget from the WBS or from the scope of work definition.

    And how is the invoice made for the work? Is it made from the scope of work definition by specifying how much % of work completed of the scope of work definition.

    Regards
  • 13. Re: Difference between contract creation and project creation
    user12832146 Newbie
    Currently Being Moderated
    Hi Dina,
    May i know if it's possible to link two different projects together in one project?!!!!

    Regards,,
    Ahmed Fazary

Legend

  • Correct Answers - 10 points
  • Helpful Answers - 5 points