It’s no secret that efficient capital management is critical in achieving organizational success.

To ensure continued success, organizations are re-evaluating their capital expenditure management processes to update capital budget allocations to align with changing requirements and prioritize outcomes. Enter the SAP Investment Management solution.

Read on to learn about the key features and benefits of IM in SAP, how it enables better investment and capital expenditure management functions, and where our team of SAP consultants can come in to help.

What is IM in SAP?

SAP Investment Management (IM) is an intelligent module designed to help users manage their critical capital investments, expenditures, and other fixed assets in a single source of truth. The SAP IM module enables organizations to support the planning, investment, and financing process and ensure alignment with strategic objectives by enabling more effective capital expenditure management.

Key Features of SAP Investment Management

While the SAP Treasury (TR) module contains intelligent functions for managing financial assets, the SAP IM module focuses more on managing investments related to fixed assets.

Here are a few of the key features of the SAP IM module:

Appropriation Requests

The Appropriation Requests component supports the phase of the investment management process associated with planning and scheduling investments that will be implemented in the future.

An appropriation request operates similarly to maintenance notifications and purchase requisitions, allowing users to include investment ideas or research and development plans before they are implemented into specific phases of the investment process.

Users can leverage appropriation requests to conduct intelligent pre-investment analysis, making it easier to include planned investments in annual investment planning activities by connecting each request to a specific investment program.

Investment Programs

The Investment Programs component offers comprehensive planning and monitoring tools for investment budgets, allowing users to combine investment measures and appropriation requests in a fully integrated investment planning process.

With a well-defined investment program, users can support the creation of annual investment plans and budgets for global monitoring, enabling better control over global budgets and a more comprehensive view of all investments and group projects.

Investment programs can be used for budgeting and planning in the following business areas:

  • Budget and investment planning
  • Plan administration and control
  • Global budget monitoring

Investment measures

The Investment Measures component provides intelligent functionality used to manage critical accounting and controlling tasks and integrate core IM features into the SAP Asset Accounting (FI-AA) module.

Investment measures are depicted in the SAP system either by internal orders or work breakdown structure (WBS) elements and can come with an asset under construction (AuC) attached to them.

With Investment measures, companies can manage accounting and controlling tasks in these areas:

  • Measures undertaken to produce long-term fixed assets for its own use
  • Measures that must be entered on the balance sheet as assets under construction
  • Other measures to plan, collect, and oversee critical business investments

Information systems

The Information System for investment programs offers intelligent drill-down reports that enable users to analyze plans, budgets, and actual values across an investment program and manage the appropriation requests and associated measures.

Information system functionality also makes it easier for users to create and share reports for evaluating master data and plan values for appropriation requests from the appropriation request perspective.

Users can leverage the information system to generate reports for accurate depreciation forecast results and facilitate integrations with IM and Asset Accounting modules, enabling users to include planned investments and already capitalized assets in depreciation forecasts.

Understanding Limitations of SAP Investment Management in S/4HANA

Here are a few critical limitations to consider when leveraging SAP IM in S/4HANA:

Project Portfolio Management

While SAP Project Portfolio Management (PPM) is designed to align capital management strategies to business objectives by enabling comprehensive business case scoring and evaluation activities, there is no direct link between the PPM module and the IM module, often the root cause of process disconnect.

The PPM solution can act as an overlay solution on top of the SAP Investment Management module, enabling users to combine ranking, scoring, and automatic investment updates without actually implementing the SAP Project Portfolio Management module.

Capital Expenditure Requests

Appropriation requests typically only include the items departments submit for inclusion into the investment program, not the actual authorization for expenditure (AFE) request, meaning that users can leverage appropriation requests as capital expenditure requests, but they lack sufficient detail.

By leveraging integrations with SAP Fiori and SAP Workflow applications, users can build a customized solution that offers the right approval capabilities to automate project creation, investment management, and budget distribution processes.

Workflow Management

For large enterprise organizations whose approval processes are based on various attributes, like asset class, value, budget status, and investment reason, workflow capabilities in pre-built appropriation requests are not flexible enough to meet their needs.

While standard appropriation request functionality doesn’t often meet the requirements of larger companies, SAP does offer alternate customization capabilities that enable users to address more demanding workflow requirements directly from their SAP Workflow Management and SAP Business Process Management solutions.

Periodic Forecasting

Many organizations require quarterly or monthly capital budget allocations, but the SAP Investment Management solution only provides functionality that covers annual capital budgeting processes, requiring them to create external investment measures that align with each investment program position.

With this, capital budgeting remains an annual concept; however, users can leverage in-built SAP planning capabilities to monitor cashflows on a quarterly, project, or cost element level.

Budget Control

Budget availability checks are typically centered around annual budget cycles and rationalized to overall budget availability checks, leaving customers to rely on project performance monitoring activities and project forecasts to prevent budget overruns and align programs with planned costs.

By leveraging custom SAP Fiori applications and tailored workflows, organizations can improve the effectiveness of their critical budget amendment and transfer processes, reduce inefficiencies across their budgeting workflows, and enforce better budget controls.

Navigating Integrations with Other SAP Solutions

Investment programs and appropriation requests are the original business objects in the SAP IM component, and they leverage integrations with SAP Plant Maintenance, SAP Internal Orders, and WBS elements from SAP Project Systems.

The IM module also provides pre-built integrations with SAP Asset Accounting to enable capitalization for the areas of an investment measure that require capitalization to a specific asset for both WBS elements and internal orders.

Users can also transfer expected depreciation values for all planned investments as planned costs to the SAP Cost Center Accounting platform, enabling more effective investment measures and better top-down budget controls.

How Can We Help?

Whether you need help implementing new SAP modules for the first time, additional support navigating communications between SAP IM and SAP ERP applications, or just an extra hand managing investments for various business cases, Surety Systems can help.

Our senior-level, US-based SAP consultant team has the technical expertise and experience to handle all your critical project needs and help you optimize your overall technical investment over time.

Getting Started with Us

Interested in learning how the SAP Investment Management platform can help you support planning, investment, and financing processes and improve overall asset management? Ready to get started on a project with our team of expert SAP consultants?

Contact us today for more information!