Project sales management
The sales processes that are used in a project-based organization differ from the sales processes that are used in a product-based organization. The reason is because the sales cycles for project-based organizations are longer and require customized estimate techniques to analyze and create quotes for each deal. Project Operations uses some of the following functionality that is used in a sales process:
- A lead record is used to track the sales process.
- Qualifying leads are tracked as opportunities.
- All related artifacts for an opportunity are accessible. These artifacts include the sales team, stakeholders, probability, rating, sales stages, and business processes.
- Multiple quotes are created for an opportunity.
- A quote is given the status of Closed as Won to create a sales order. In Project Operations, the sales order is customized and called a project contract.
Project leads
Project-based leads can be managed and qualified in Project Operations. The process of lead management includes creating work-based leads and qualifying those leads.
When a project-based lead is qualified, an opportunity and an account are created. A project-based opportunity is the starting point for sales pursuit activities in the Opportunity phase. Project-based opportunities have unique capabilities that are required for selling project work.
These capabilities include:
- Time and material and Fixed Price billing methods.
- Multiple date-effective price lists for human resources, expenses, and material that incurred on projects.
For a qualified lead to automatically create an opportunity, set the Type attribute to Work-based when you create the lead.
Note
If you choose a different type, the lead will not create a project-based opportunity when it is qualified. If the project-based opportunity is not created, the project-specific capabilities will not be available in the downstream sales processes.
Leads that have the Type value set to Work-based are called project-based leads. When a project-based lead is qualified, the following is created:
- An account that uses the Company field from the lead
- A contact record that is associated to the account based on the values in the First Name and Last Name fields on the lead
- A project-based opportunity that has the Type field set to Work-based
Project opportunities
Project-based companies typically have their operations for delivery spread across multiple countries, regions, and geographies. The cost of project implementation and delivery can vary based on which geography or division manages the delivery. In turn, this factor can impact the margins of the deal. The delivery of project-based services typically involves large quantities of human resource time, considerable expenses for travel, material costs, and other expenses.
Project-based opportunities in Project Operations are designed with integration to Dynamics 365 Sales. This unit provides details about the different fields and business logic that are included in the additional functionality that is required by project-based companies to manage project-based opportunities.
The following business process flows are supported for project-based deals in Project Operations:
- Lead to Opportunity business process
- Opportunity sales process
Lead to Opportunity business process
The lead to opportunity business process supports the following stages.
| Stage | Mapped entity | Functionality |
|---|---|---|
| Qualify | Lead | Qualify the lead to create an account, contact, and an opportunity. |
| Develop | Opportunity | Develop the opportunity to add more information on the work involved, key stakeholders, and competition. |
| Propose | Opportunity | Develop the proposal and get approval from the internal review team. |
| Close | Opportunity | Win the opportunity to close the deal. |
Opportunity sales process
The Opportunity sales process in Project Operations is an extension to the Opportunity sales process business flow in the Sales application. This business process is designed out-of-the-box to support the following stages in a project-based opportunity.
| Stage | Mapped entity | Functionality |
|---|---|---|
| Qualify | Opportunity | Qualify the lead to create an account, contact, and an opportunity. |
| Propose | Quote | Develop the proposal by using project quotes and get approval from the internal review team. |
| Contract | Project Contract | Win the quote to create the contract and begin implementation and delivery on the project. |
| Close | Project Contract | Finish the work successfully and close the project contract. |
Note
You can edit the product business process flow or create your own business process flows to track your sales process, as necessary. For more information, see Business process flows overview.
Project quotes
In Project Operations, project quotes are designed to help build proposals for project work. The structure of a project quote in Project Operations is structured for project proposals with the following components:
- Quote lines that identify the discrete components of work that will be presented as high-level components.
- Quote line details that identify and estimate the work for each high-level component or quote line. Schedule or date estimates and the financial aspects for the work are tied to that quote line.
- Contracting models and chargeable components are set up for each quote line. This setup helps estimate the spread of revenue, spend, and profitability for each quote line and the overall quote.
Project contracts
Project contracts in Project Operations capture and manage the contractually agreed-on commitments and billing details of a project. The structure of a project contract in Project Operations is tailored to project-based work with the following components:
- Contract lines that identify the discrete components of work that will be presented as high-level components on a project invoice.
- Contract line details that identify and estimate the work for each high-level component or contract line. The estimate includes the schedule and the financial aspects for the work that is tied to the contract line.
- Contracting models and chargeable components are set up for each contract line that holds the billing arrangement for each contract line and the overall contract.
Before you begin using project contracts in Project Operations, you need to understand the following project contract terminology and concepts:
- Owning company
- Contracting unit
- Cost currency
- Sales currency
- Billing method
- Project price lists
- Transaction classes
- Work entities and billing entities
- Multi-customer deals
- Invoice schedules
Owning company
The owning company is the legal entity from the Project management and accounting module for Project Operations from Dynamics 365 Finance. The owning company represents the legal entity that will account for the cost and revenue that accrues from a deal.
Contracting unit
The contracting unit represents the division or practice that owns the delivery of the project. You can set up resource costs for each contracting unit. When you specify the resource cost for a resource, you will also be able to set up different cost rates for resources. This contracting unit borrows these resources from other divisions or practices within the enterprise. The cost rates for the resources are referred to as transfer prices, resource borrowing, or exchange prices. When you set up the cost rates to borrow resources from other divisions, use the currency of the lending division.
Cost currency
Cost currency is the currency in which costs are reported on screen. This currency is derived from the currency that is attached to the Contracting Unit field on the contract and the project. Costs can be logged in any currency against a project. However, there is currency conversion from the currency that the costs were recorded in to the cost currency of the project when shown on the screen.
Because the exchange rates in the Microsoft Dataverse platform cannot be date effective, the on-screen totals for cost might change over time if you update the currency exchange rates. However, costs as recorded in the database remain unchanged because the amounts are stored in the currency that they were incurred in.
Sales currency
Sales currency in Project Operations is the currency in which the estimated and actual sales amounts are recorded and shown. Sales currency is also the currency in which the customer is invoiced for the deal. On a project contract, the sales currency defaults from the customer or account record and can be changed when the contract is created. When a contract is created by closing a quote as won, the currency on the contract is defaulted from the currency on the quote.
When you create a new project contract, the Sales Currency field cannot be edited. Product and project price lists default based on this currency on the contract.
Unlike costs, sales values can only be recorded in the sales currency.
Billing method
Two typical types of contracting models for projects are fixed fee and consumption-based. These models are represented in Project Operations as billing methods with two possible values:
- Time and material - A consumption-based contracting model, where each incurred cost, is backed by corresponding revenue. As you estimate or incur more costs, the corresponding estimated and actual sales also increase. Specify not-to-exceed limits on contract lines that have this billing method, which caps off the actual revenue. Estimated revenue is not impacted by not-to-exceed limits.
- Fixed price - A fixed fee contracting model that indicates the sales values will be independent of the costs incurred. The sales value is fixed and does not change as you estimate or incur more costs.
Project price lists
Project price lists are used to default prices, not cost rates, for time, expense, and other project-related components. Multiple prices lists can exist. Each price list has its own date effectivity for each project contract. Overlapping date-effectivity on project price lists is not supported in Project Operations.
When a project contract is created by winning a project quote, project price lists are copied with the contract name and date included. Copying this information constitutes custom pricing for project components on this project contract.
Transaction classes
Project Operations supports four types of transaction classes:
- Time
- Expense
- Material
- Fee
Cost and sales values can be estimated and incurred on Time, Expense, and Material transaction classes. Fee is a revenue-only transaction class.
Work entities and billing entities
Entities that represent work are projects and tasks. Entities that represent billing aspects are contract lines. You can tie different work entities to billing options by tying them to contract lines.
Multi-customer deals
Multi-customer deals have more than one customer to invoice on a deal. Common examples of multi-customer deals include:
- OEM Enterprises and their partners - Partners and resellers sell a product with some value-added services, typically involving a particular deal with a customer. The OEM offers to finance a portion of the project.
- Public sector projects - Multiple departments of a local government agree to fund a project and are invoiced according to a previously agreed split. For example, a school district and the local government agree to fund the building of a swimming pool.
Invoice schedules
Invoice schedules are specific to each contract line and are required for automatic invoicing to work. Invoice schedules are created based on certain start and finish dates and invoice frequency. The schedules are used in the contract stage when the automatic invoice creation process is configured. When a project contract is created from a quote, the invoice schedule is copied to the project contract from the quote.
Note
Contracts in Project Operations are built on Orders in Dynamics 365 Sales. However, important deviations and differences will occur in functionality. Contracts have their own form and UI elements, business rules, business logic in plug-ins, and client-side scripts that make them different from Orders. For these reasons, do not use a Sales order and Project Operations contract interchangeably.
Learn more about project sales management in the Get started with project sales management in Dynamics 365 Project Operations module.