Object name &1 is not within a valid name space

What causes this issue?

For non-SAP systems: The names of projects, sub-projects, and
conversion objects should begin with Y or Z.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.