Sourcing and Procurement Operations integration with Project Management

  • Release version: Yokohama
  • Updated January 30, 2025
  • 4 minutes to read
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    Summary of Sourcing and Procurement Operations integration with Project Management

    The Sourcing and Procurement Operations integration with Project Management, enabled by the Project Costing for Sourcing and Procurement Operations plugin (snspendppm), automates linking purchase orders to projects within ServiceNow's Strategic Portfolio Management. This eliminates manual efforts and streamlines tracking of planned and actual costs associated with project purchases and invoices.

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    This integration requires several dependent applications and system plugins to be installed separately, and administrators must assign specific licensed roles such as IT Project User and PPM user to shoppers and procurement specialists respectively to enable project visibility and functionality during procurement.

    Key Features

    • Project Association during Checkout: Users are prompted to specify if a purchase is for an existing project, selecting the project which auto-populates purchase reason fields with project and demand details.
    • Form Layout Configuration: Purchase request and purchase order line tables can be customized to show the Project field and Cost plan field, facilitating visibility of project association and cost planning directly within procurement records.
    • Automatic Cost Plan and Expense Line Creation: Cost plans are generated automatically when purchases are made against projects, with total planned and actual costs updated based on purchase orders and paid invoices. Expense lines are created upon invoice payment, linking financial transactions to projects.
    • Handling Demand and Project Lifecycle: When demands convert to projects, references shift accordingly in purchase requests, orders, cost plans, and invoices. Closed demands or projects are excluded from new selections and cost plans, though expense lines continue to generate for existing cost plans until all invoices are paid.
    • Impact on Sourcing Requests and Off-Catalog Requests: Users must indicate if pricing or quote requests relate to existing projects, which links sourcing activities to project and demand records for comprehensive tracking.
    • Email Notifications: Demand or project managers receive notifications when purchase orders associated with their projects are created, updated, or canceled, ensuring they stay informed of cost plan impacts.

    Practical Implications for ServiceNow Customers

    With this integration, ServiceNow customers can expect improved accuracy and efficiency in associating procurement activities with project financials. Project managers, shoppers, and procurement specialists gain enhanced visibility into planned and actual project costs, facilitating better budget management and financial tracking within projects.

    Administrators need to ensure proper role assignments and plugin dependencies are met to leverage these capabilities. Configuring form layouts and understanding the lifecycle impacts on demands and projects will help tailor the integration to organizational workflows.

    Overall, this integration streamlines procurement processes linked to projects, reduces manual data entry, and improves financial transparency in project management.

    Eliminate manual efforts of linking purchase orders to projects by integrating Sourcing and Procurement Operations with Strategic Portfolio Management's Project Management.

    The Project Costing for Sourcing and Procurement Operations plugin (sn_spend_ppm) provides this integration. This plugin has dependency on the following applications that can be purchased separately:
    • Sourcing and Purchasing Automation
    • Source-to-Pay Common Architecture
    • Finance Common Architecture
    • Common Service Delivery
    • Procurement Case Management
    • Source-to-Pay Workspace
    • Supplier Common Architecture
    • Playbook Experience
    • Document Templates
    • Common Vendor Core
    The plugin also has dependency on the following system plugins that need to be installed separately:
    • External User Self-Registration
    • Finance Applications - Common Dependencies
    • Fiscal Calendar
    • GraphQL Plugin
    • Insert Multiple Web Service
    • PPM Standard
    • Process Automation Designer Core
    • Process Automation Designer for App Engine
    • Scoped Application Restricted Caller Access
    • Signature Pad
    • User Criteria Scoped API
    • Vendor Core
    Important:
    Your administrator must manually assign the IT Project User, which is a licensed role, to your shopper for them to view project details during checkout. Also, as part of the Source-to-Pay pricing initiative, your administrator must manually assign the PPM user role to your procurement specialist.

    With this integration, project managers or shoppers can associate a purchase with a project, which provides the reason for making the purchase, but also automatically creates cost plans and expense lines for that project. This enables project managers, shoppers, and procurement specialists to easily track planned costs each time a purchase is made for a Project Management project, and realize actual costs each time an invoice is paid for a Project Management project purchase.

    Impact on checkout and purchase details

    When this application is installed, you must answer the additional question Is this a purchase for an existing project? during checkout. If your answer is in the affirmative, you must select your project from the list to proceed with the checkout.

    Each project name is associated with a demand number, both of which are then auto-populated in the Purchase Reason field. You can add more information in the Purchase Reason field if you want to. On completing your checkout, these details are displayed on the purchase details page.
    Note:
    • If this purchase isn’t made for an existing project, you must mention the reason for purchase in the Purchase Reason field to proceed with the checkout.
    • During full checkout, you can select a project for the entire purchase or individually at the product level.
    • You can’t select a project for a credit purchase.

    Impact on purchase request line and purchase order line tables

    When a purchase request is created, you can configure the Purchasing Details form layout on the purchase request line table to display the Project field. This field references the selected demand record. Similarly, when a purchase request line is converted to a purchase order line, you can configure the Summary Details form layout on the purchase order line table to display the same Project field.

    As part of this integration, whenever a purchase is ordered as part of a demand or project, a cost plan is automatically created in association with that purchase order line. You can configure the Summary Details form layout on the purchase order line to display the new Cost plan field. A Purchase Order Lines related list is also added to the corresponding cost plan record. On the Cost Plan form, the Total planned cost field is auto-populated based on when the purchase order had been generated. The Total actual cost field is populated based on invoice and expense line creation.

    For information on how to configure a form layout, see Configuring the form layout.

    Impact on invoice line and expense line tables

    When an invoice is created, and both the invoice and the invoice line are in the Paid state, an expense line is automatically created for the project. This expense line has an Invoice Lines related list reference.

    For more information on invoice creation, see Invoices.

    Impact of demand and project lifecycle on Sourcing and Procurement Operations flows

    When a demand is converted to a project as part of demand and project lifecycle:
    • The demand number isn’t available for selection during checkout.
    • When a purchase request line using that demand number is converted to a purchase order line, the latter references the project and not the demand number.
    • The cost plan references the newly created project and not the one initially selected by the shopper.
    • When an invoice is created, the associated expense line references the project and not the demand number.
    When a demand or project is in a closed state:
    • The demand or project number isn’t available for selection during checkout.
    • Cost plans and expense lines aren’t created for closed demands and projects. However, if a cost plan is already created for a closed demand or project, expense lines continue to be auto-generated until all the invoices are paid out.

    Impact on sourcing request

    When requesting pricing for a product that doesn’t have pricing available, you must answer the additional question Is this a purchase for an existing project?. If your answer is in the affirmative, you must select your project from the list to proceed with submitting the request. On successful submission, the project and demand details are displayed on the sourcing request record.

    As a shopper, you can compare the pricing for your purchase, select a supplier, and proceed to checkout.

    Impact on off-catalog purchase request

    When requesting a quote for a product that is not available on the ShoppingHub catalog, you must answer the additional question Is this a purchase for an existing project?. If your answer is in the affirmative, you must select your project from the list to proceed with submitting the request.

    Email notifications

    When a purchase order associated to a demand or project is created, updated, or canceled, the assigned demand manager or project manager gets an email notification about its impacts on the cost plans of the demand or project.