Various Cost Planning Methods in PS

(1) Easy Cost Planning
(2) Unit Costing
(3) Detailed Cost Planning
(4) Network Costing

 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. 

Changing the Planning profile for cost planning in ECC

Use

Using this function, you can perform costing for your appropriation requests and thereby determine your overall and annual plan values. The plan values you enter are either estimated, or are based on calculations that are made outside of the R/3 System. If these methods of determining planned costs are not detailed enough for you, then you can use the functions of Easy Cost Planning for detailed cost planning directly on the appropriation request.

Prerequisites

• You have to enter a costing variant in the planning profile for cost planning of appropriation requests. This planning profile has to be entered in the appropriation request type (in the Cost and revenue planning group box).

• You can create a cost estimate for any appropriation request variant, which does not yet have a cost estimate and for which there are no plan values outside of the planning interval. Set up the planning interval in the planning profile for cost planning so that planning in the past is also possible.

• The appropriation request type has to allow either only projects or only orders as measures.
• If you want to copy the cost estimate to the measure later, then you have to set the Copy cost estimate indicator in the appropriation request type.

You edit planning profiles in Customizing for Investment Management. Choose Appropriation Requests --> Planning --> Cost Planning --> Maintain Planning Profile for Cost Planning.
For appropriation request types, choose Master Data --> Control Data --> Maintain Appropriation Request Types.

If these preconditions for costing are not fulfilled, then you cannot jump from the appropriation request to Easy Cost Planning. The system suppresses the necessary pushbutton in that case.

Features

You can enter only one cost estimate for each appropriation request variant.
The overall value that results from the cost estimate can be divided into investment costs and overhead costs on the basis of the investment percentage rate. The system multiplies the combined costs from the cost estimate by the investment percentage. The result is the amount of investment costs.
Once you have entered a cost estimate for a variant, you can no longer change the overall plan values manually. Any changes have to be made in the cost estimate. Only by deleting the cost estimate can you make investment and overhead costs available again for manual processing.
Revenue planning is separate from the cost estimate. Therefore you can still process revenue amounts even if you created a cost estimate.