Internal Order or Project WBS- Part1

Many Clients Teams who are implementing / migrating to SAP S/4HANA, ask this Key Question : Should we continue using Internal-Order or adopt Light-Project-WBS ?

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Executive Summary :

Type of Internal Order	Description	Recommendation / Impact in S/4HANA
Simple Account Assignments	Used as default account assignment (e.g., OKB9) or credit object in costing sheet; also includes statistical IOs.	No change – continue to use IOs for these purposes. Statistical IOs remain supported.
Project-like Orders	Orders behaving like projects (long-term, multiple postings, need structured reporting).	Replace with single-level WBS elements to leverage functions like event-based revenue recognition and new PS capabilities.
Orders Assigned to Other Objects	IOs linked to IM program items, WBS elements, or sales order items.	– Consider using statistical WBS elements instead of statistical IOs in sales documents (see SAP Note 43875).- Currently, such relationships not fully supported in CDS/Fiori reporting → must use classic reports temporarily.

SAP NOTES related to the TOPIC

Here’s SAP NOTE which mentions SAP’s roadmap and recommendation related to Internal-Order : https://me.sap.com/notes/2865342/E

Scenario : You are currently using internal orders and want to understand the impact of a move to SAP S/4HANA. You should check transaction OKKP to determine whether Order Management is active for the controlling area. This setting affects the update of internal orders and work orders in other modules, such as production orders, process orders, networks, maintenance orders and service orders. Internal orders are in use if there are entries in table AUFK with order category (AUFTYP) 01, 02, 03 and 04. Solution Business Value Internal orders are used to capture overhead costs, research and development costs, the costs of capital investments, and so on. Internal orders can be used as account assignments in many operative processes, including procurement. Depending on the type of order, the costs are then typically charged back to the supporting cost center, to profitability analysis or to assets or assets under construction via settlement. Business Process related information In SAP S/4HANA the costs associated with the internal orders are captured in the universal journal (ACDOCA) and can be viewed in all reporting apps. In SAP S/4HANA Public Cloud the internal order apps have been deprecated (removed). SAP recommends to use WBS elements instead. Work orders are supported as part of the logistical processes. In SAP S/4HANA Private Cloud and On Premise internal orders continue to be supported.  While all existing functions will continue to be supported, new developments, such as event-based revenue recognition, will focus on projects rather than internal orders. For this reason customers are starting to review their use of internal orders as part of the conversion process.  Required and Recommended Action(s) Review existing use of internal orders to identify: * orders that are simple account assignments  * project-like orders  * orders that are assigned to other objects e.g. WBS elements, sales order items, IM program items Simple account assignments There will be no change to the use of internal orders as account assignments in transactions such as OKB9 (default account assignment) or as the credit object in a costing sheet during overhead calculation. Statistical internal orders will also continue to be supported. Project-like orders For project-like orders, consider replacing internal orders going forward with single-level WBS elements to benefit from new functions, such as event-based revenue recognition, and future functionality designed specifically for projects. Internal orders assigned to other objects If you plan to use statistical WBS elements instead of statistical internal orders in sales documents, please check SAP note 43875. Where internal orders are assigned to IM program items, WBS elements or sales order items, such relationships cannot yet be evaluated using CDS views for reporting in SAP Fiori. Classic reports will have to be used in the interim.

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