Streamline Asset Acquisitions with Investment Management

  • by Paulo Vitoriano, Freelance SAP Solution Architect
  • October 3, 2013
The asset acquisition process is very important for many companies. Discover the advantages of setting up a standard process for asset acquisitions using functionality within the investment management (IM) and project system (PS) modules.
Learning Objectives
  •  Understand how to set up a standard process for asset acquisitions using functionality within the investment management (IM) and project system (PS) modules.

 

Key Concept
An appropriation request (AR) can be interpreted as a funds request that is subject to business approval. It can also be referred to as authorization for expenditure (AFE). Besides the purely financial function, the same request can serve for technical approvals or business partner approvals (for example in joint ventures). An AR can also carry out custom analytics for environmental accounting and sustainability reporting, for example, as well as links to relevant documents. If it is approved, it can be converted automatically to an order or a project. The respective order or project can inherit some of the AR data attributes, including cost planning that later can be converted into a budget. The same order or project is used to create an asset.


The asset acquisition process is very important for many companies. Quite often it involves allocation of significant funds, additional internal and external labor, and different local accounting rules for asset capitalization.

Management needs to have a business approval preceding asset acquisition and continuous budget control for allocated funds. In addition, the business needs overall budget control for capital expenditures (CAPEX) that are projects managed internally, ready-made assets, or mixed cases involving additional internal or external labor and services.

The investment management (IM) module can cover a variety of business requirements. IM uses two major master data elements: investment programs and appropriation requests (AR). You can use them in combination (to benefit most from standard functionality) or separately. I focus on the AR functionality for this article mainly because it can be easily deployed, having little or no dependency on other system configurations. Therefore, it can represent some quick wins for the business. 

Note
Vehicle acquisition is an example of a direct asset purchase. An example of a combination of an asset and services is equipment that requires installation and configuration performed separately. An IT system implementation project is likely to have a mix of internal and external resources creating an intangible asset over an extended timeline.

Paulo Vitoriano

Paulo Vitoriano started his consulting career with Arthur Andersen Business Consulting in 1997. Since then, he has helped many global clients on SAP implementation projects, including DHL, Carlsberg, Nestle, Shell, AXA, Electrolux, and Maersk. During the last 18 years he has covered more than 10 end-to-end SAP implementations working on-site in 16 different countries. He has project experience with seven different oil and gas companies, and his current focus is on SAP IS-Oil and system integration. 

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