Capital Expenditure (CAPEX) is one one of the most critical business processes for all organisations. Effective capital expenditure will help the organisation grow and compete. Wasteful capital expenditure can be catastrophic, and may only be evident years after the actual decision was made. This white paper provides some best-practices for automating your end-to-end CAPEX processes within an SAP environment.
The high-level business processes addressed by an end-to-end CAPEX solution include:
- Long Range Planning (ideation, portfolio and capacity planning)
- Annual Planning (financial, budget and cashflow planning)
- Project Planning (authorisation for expenditure, scope & schedule, and resource planning)
- Periodic Re-planning (Monitoring, Rolling Estimates, and Reviews)
- Procurement (Requisitioning, Receipting and Cost Control)
- Asset Capitalisation (Asset classification, valuation and depreciation)
In addition to new Capital Investments, the CAPEX process must accommodate transfers, disposals, and revaluations.
CAPEX is a core financial process, and deep SAP integration is required for effective process automation. CAPEX is also a process that impacts the highest level decision makers, and therefore an intuitive executive end-user experience is imperative. The most common bottleneck in any CAPEX process is delayed approval – these delays may directly impact an organisation’s competitiveness with respect to time-sensitive opportunities, and will delay the time-to-value of investments.
The recommended approach for SAP customers is to employ a technology framework comprising the following components:
- Mobile-responsive web application for CAPEX request initiation – SAP Fiori is a great choice here.
- Mobile-approval – executives should be able to access all the details of a request easily, and make confident decisions everywhere – OneList Approvals is perfect to combine both CAPEX and Purchase Orders in a single actionable list, for example.
- Document management – business case justifications and supplier quotations need to be centrally managed, and form for a critical basis for evaluation and subsequent review.
- Excel integration is essential- both for uploading your budgets and project business cases, and also for on-going CAPEX analytics.
The IQX experience of delivering CAPEX solutions to a large number of global customers are contained in the CAPEX Business Practices guide available below: