SAP Investment Management Overview

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.

SAP Investment Management Constraints

User Experience

The first and most obvious reason that SAP Investment Management 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.

Dimensions of SAP Investment Management

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 Investment Management 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.

Process Completeness

SAP Investment Management 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.

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 below.


The SAP user-based pricing model can also act as a significant impediment to adopting SAP Investment Management 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.


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.

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.

Solution Alternatives

If you are not using SAP Investment Management, what third-party solutions are you using, and what are the risks?

Generic Collaboration Platforms

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 Workflow Engines

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 Analytic Tools

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.

Dedicated Capital Expenditure 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.

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?

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.

Challenges of doing it Yourself

SAP provides tools to create your own customized Fiori apps. Building your own apps does, however, bring some challenges, we have addressed this in the post: “Building Your Fiori Apps for Capital Expenditure Process Management

Why You Should Consider Leveraging SAP Investment Management

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.

Explore how IQX can assist you leverage SAP Investment Management in S/4HANA to get more from your business. Contact us today to find out more about how we can tailor a solution to you – SAP Investment Management doesn’t need to be complicated.

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