You run SAP as your core Enterprise Resource Planning (ERP) system, but your most important business decisions – where to invest for the future – are currently managed and controlled outside the system. You are aware that SAP Investment Management (SAP IM) provides a good foundation of master data and transactional capabilities – so why is this functionality not being effectively utilized? In this blog we discuss why many organizations have not adopted SAP IM, the drivers of change, your technical options, and propose a future-proof, SAP-centric solution approach.

1. August | 3rd | 2021
IQX Business Solutions
Why are you NOT making use of SAP
Investment Management?

2. Overview
In this Slideshare we discuss why many organizations have not
adopted SAP IM, the drivers of change, your technical options, and
propose a future-proof, SAP-centric solution approach.
Solution Alternatives
Generic Collaboration Platforms
Generic Workflow Engines
Generic Analytics Tools
Dedicated CAPEX Management
Software
A Pure SAP Technology Solution
SAP Fiori
Conclusion
SAP Management Constraints
User Experience
Dimensions of SAP Investment
Management
Process Completeness
SAP is no longer the Single Source
Licensing and Workflow
Periodic Forecasting of SAP Investment

3. User Experience
The first and most obvious reason that SAP IM is not more
extensively utilized is the legacy end-user experience. Frankly,
the SAPGUI thick-client interface is not suitable for executives
and managers as it is too onerous to access, navigate, and
evaluate content. Consider SAP Appropriation Requests:
Accessing key financial measures requires many clicks.
The history of approval comments is even harder to review.
Justifications and supporting documents are likewise hidden from
view. If the key capital appropriation request transaction is
unsuitable for executive use – and executives are the key
participants in this critical process – then the functionality was
dismissed early in most initial SAP implementations.

4. The nature of an organization’s Capital Expenditure
requirements varies considerably by industry: from
specialized trucks for a waste management
company, to new stores for a retailer, and Patents
and Trademarks for a medical devices company.
Consequently, the evaluation and prioritization are
unique and important. SAP IM provides some
common analysis dimensions like business unit,
asset class, investment reason, scale, and priority as
well as some key financial measures such as Net
Present Value (NPC), Internal Rate of Return IRR) and
Payback period.
Most organizations, however, have
additional classifications (for example,
strategic alignment, risk rating) and
measures (for example standard
deviation/confidence level) that are not
built into standard SAP IM.
Dimensions of SAP Investment
Management

5. Process Completeness
SAP IM does not provide a complete suite of
capability: for example, many organizations
have processes for both requesting annual
budget (wish list items) and triggering the
formal commencement of procurement (Capital
Expenditure requests). SAP Appropriation
Requests can be adapted to this dual role, but
awkwardly and with some end-user confusion.
In addition, some common investment
management processes are not supported at
all: for example, Asset Transfers, Revaluations
and Disposal, Project Closure, Post Investment
Review or Benefits Realization Analysis.

6. The SAP user-based pricing model can also act as a significant
impediment to adopting SAP IM functionality to support the end-to-end
CAPEX process. Not every maintenance engineer wanting to submit a
CAPEX proposal is currently ERP licensed. Not every executive
responsible for reviewing and prioritizing CAPEX requests is currently a
professional SAP user.
Therefore, directly (or indirectly) integrating with SAP transactional
functionality can impose a significant licensing obligation, and this
aspect does require careful consideration in the overall solution design.
Licensing
Workflow
The automated routing of requests for approval based on the
organization’s delegation of authority and policy compliance rules is a
core capability of the CAPEX process from wish list items, annual
budget, Capital Expenditure, forecasts, project closure and asset
creation.
However, many organizations have been jaded by their SAP Workflow
implementation experience: this requires specialist skills to
implement, is expensive to support, and provides at best a mediocre
executive end-user experience.

7. SAP is no longer
the Single Source
An inevitable long-term trend is that everything is
no longer in SAP ERP. Even within the SAP
environment, HR is now frequently supported by
SuccessFactors, procurement by Ariba, project
planning in SAP Portfolio and Project
Management.
Organizations are increasingly adopting third-
party best-of-breed solutions to complement their
digital core. This precedent is emboldening
architects to embrace third party CAPEX
solutions: at a long-term consequential cost which
is outlined next.

8. Periodic Forecasting of SAP
Investment Management
Probably the biggest functional gap in SAP Investment
Management is the inability to provide a monthly forecast of
budgeted items in either your Investment Program Positions
or Appropriation Requests. In practice, most organizations
manage CAPX in terms of both annual commitment, and
monthly cash flow in the current financial year.
Special consideration of how to achieve periodic cashflow
forecasting for the entire CAPEX budget (comprising both
approved and planned projects) requires careful
consideration and implementation.

9. Solution Alternatives
Excel and other specialist financial planning and
consolidation tools are frequently co-opted to facilitate
the planning and forecasting of Capital Expenditure.
These tools do not, however, effectively handle the
workflow routing and approval or requests nor the
resulting ERP update integration.
Generic Analytics Tools
Some organizations co-opt specialist workflow tools to
manage their CAPEX approvals. Whilst effective at
approval routing, these solutions typically do not
provide the data persistence and analytic capabilities
of an integrated system.
Generic Workflow Engines

10. Solution Alternatives
Email, SharePoint and Lotus Notes have traditionally been used to
drive the CAPEX request form and approval process. The obvious
concern of approvers is the reliability of the presented numbers:
not being integrated with the backend ERP system means that
budget and cost-to-date numbers are manually entered, typically
requiring the manual involvement of the finance team to provide
the details.
Generic Collaboration Platforms
Dedicated CAPEX Management Software
Whilst these solutions may nominally offer a complete end-to-end
solution, they typically offer limited flexibility of the data model to
accommodate custom classifications and business rules, minimal
user-interface customization, and only do-it-yourself ERP update
integration. Importantly, these dedicated solutions can not extend
to address related down-stream CAPEX processes such as Fixed
Asset movements, procurement, or project management activities.

11. A Pure SAP
Technology Solution
If third-party tools do not provide an effective
solution, how can the effective SAP Investment
Management functionality be more effectively
adopted?

12. SAP Fiori
SAP Fiori is the game changer for SAP customers. SAP Fiori is
the new web and mobile user experience for all SAP’s new
product suite. Customized SAP Fiori apps can radically
transform the user experience of both initiators and approvers
to provide a tailored interface.
SAP Workflow can support all the required approval processes.
And being based on SAP master data and transactions, the
CAPEX process from appropriation requests to asset creation
can be deeply integrated. Where standard processes are
sufficient, SAP standard Fiori apps can be incorporated in an
integrated Fiori Launchpad of transactions to provide a
seamless end-to end investment management, asset
management, procurement and project management solution.

13. Conclusion
SAP Investment Management is the best and most
comprehensive solution platform for SAP customers. Most of
the historical reasons for not adopting SAP Investment
Management can be overcome by developing custom Fiori
apps that can comprehensively support the user experience,
process and integration requirements.
There are, however, specific challenges to building your own
apps that one would need to consider.
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