Large investment projects are complex and resource-intensive. They require careful planning, budgeting, monitoring, and control to ensure successful execution. These projects play a vital role in a company’s growth, financial stability, and operational efficiency. To manage them effectively, organizations need a structured and integrated digital solution.
SAP Investment Management (IM) provides a comprehensive framework to manage capital investments efficiently. The module integrates seamlessly with other SAP components such as Project System (PS) and Asset Accounting (AA), enabling end-to-end visibility and control over capital expenditures.
This blog highlights a three-part series of papers that together explain the full capabilities of the SAP Investment Management module:
Part 1 – Configuration of the Investment Program and Appropriation Requests (Requesting Measures)Part 2 – Setup of Investment Measures (WBS or Internal order) and the Settlement ProcessPart 3 – Step-by-step execution process for managing large-scale capital investments
By combining insights from all three papers, this blog serves as a complete guide to SAP Investment Management, offering practical knowledge for finance, project management, and SAP professionals seeking to improve how they plan and control large investment projects.
INVESTMENT MANAGEMENT IN SAP: A KEY TOOL FOR MANAGING LARGE EXPENDITURES
Investment Management (IM) is a key module in SAP that helps organizations plan, monitor, and control major spending initiatives. These expenditures can be capital-related, such as investments in infrastructure, machinery, or technology, or non-capital, including R&D, acquisitions, or major maintenance projects.
The IM module allows companies to design their own investment program structure based on business needs, consolidating all approved and planned costs into a hierarchical framework. Using requesting measures, such as Appropriation Requests, organizations can plan long-term investments that often span several years in line with project lifecycles.
SAP IM also incorporates workflow-based approvals, ensuring strong governance and compliance throughout the investment process. While IM focuses on planning and budgeting, effective investment lifecycle management also requires linking it with Investment Measures, the operational side of managing project costs and asset creation.
Investment Measures (WBS or Internal order) in SAP are the objects that receive budgets, track planned versus actual costs, and settle expenses to fixed assets, cost centers, or general ledger (G/L) accounts. Depending on the investment type, these measures may take the form of WBS (Work Breakdown Structure) elements or internal orders.
In essence, SAP Investment Management brings together four key components, which work seamlessly to ensure accurate, transparent, and efficient management of capital and non-capital investments. The following section explores these components in more detail.
STEPS IN MANAGING LARGE EXPENDITURES IN SAP INVESTMENT MANAGEMENT
Fig 1: SAP Investment Management Overview
Source: SAP Help Portal on Investment Management (Overview)
Requesting Measures (Appropriation Request): Similar to a purchase requisition, an appropriation request is used to request approval for large expenditures. This request contains critical details about the project, including the planned costs. A standard SAP workflow is set up to ensure that appropriation requests are reviewed and approved before any funds are committed.Investment Program: The investment program provides a hierarchical structure within the organization to plan, budget, and distribute large expenditures. The program allows the organization to define its own structure based on needs. All approved planned costs for requesting measures are aggregated within this hierarchy. Costs are planned from the bottom up, while budgets are allocated from the top down. Investment measures can only be assigned to the lowest level in the hierarchy, called “end nodes,” which can include internal orders, WBS elements, or maintenance orders.Investment Measure: Investment measures are used to track the planned budget and actual spend. These can be Project System (WBS) elements or Internal Orders. Investment measures receive the budget allocated from the investment program and track the actual expenditure as it occurs. It tightly controls the spending by monitoring the planning, budgeting, actual, commitment, and remaining available funds. Investment measures are closely linked with the Asset Accounting module in SAP, ensuring that any unallocated spending at period-end is properly settled into assets under construction (AUC).Settlement planning and settlement: Once a project or investment measure is completed or partially completed, it must be settled. A project can be settled to various objects, such as fixed assets, cost centers, other investment measures, or general ledger accounts. The settlement process requires careful planning to determine how funds will be allocated (e.g., by percentage, amount, or proportion). Once the project is ready to settle, the settlement rules are defined in the investment measure to transfer the financial information to the appropriate accounts..
The whole design of implementing and end-to-end execution investment management in SAP is divided into 3 papers as below. These papers are free to download and use:
Paper 1: Laying the Foundation: Structuring Investment Programs and Approval Request— A Guide to Initiating and Organizing Capital Investments
This paper covers the initial steps in managing large projects through SAP Investment Management, including the setting up of investment programs and the process for requesting measures. The paper can be downloaded from the link below:
Part 1 – Configuration of the Investment Program and Appropriation Requests (Requesting Measures)
Paper 2: From Planning to Action: Configuring Investment Measures and Settlement Processes — Ensuring Control and Accountability in Capital Projects
This paper focuses on configuring investment measures and defining settlement rules, providing the foundation for effective planning, tracking, and accountability in capital project execution. The paper can be downloaded from the link below:
Part 2 – Setup of Investment Measures (WBS or Internal order) and the Settlement Process
Paper 3: Executing Large Investments: A Step-by-Step Guide to Project Delivery and Oversight— Managing the Full Lifecycle of Strategic Expenditures
The final paper outlines the end-to-end execution process for managing large-scale investments using SAP, including project tracking, monitoring, and lifecycle management. The complete end-to-end Investment Management execution process in SAP includes the following five key steps:
Establishing the Investment Program Structure.Initiating Investment Plans through Appropriation Requests.Building Project System Hierarchy.Cost Planning and Budgeting.Executing and Settling the Project.
The paper can be downloaded from the link below:
Part 3 – Step-by-step execution process for managing large-scale capital investments
Conclusion
Effectively managing large capital investments is vital for an organization’s financial health and long-term success. In this three-part series on SAP’s Investment Management (IM) paper, we’ve presented a complete framework for planning, executing, and settling large-scale expenditures in a structured and efficient way.
Paper 1 laid the foundation by configuring investment programs and requesting measures, establishing a clear structure for tracking planned spending.Paper 2 focused on designing investment measures and settlement rules, enabling organizations to monitor and control project execution throughout the investment lifecycle.Paper 3 demonstrates the end-to-end execution process of large capital projects, from master data setup to project execution and final settlement.
By following this integrated approach, organizations can confidently manage investments, keeping projects on budget, meeting deadlines, and aligning with strategic objectives. SAP’s IM module helps navigate the complexities of capital investment management, optimizing financial operations and supporting both short-term and long-term business goals.
Together, these three papers provide a step-by-step guide to managing strategic investments, giving businesses the clarity, control, and insight needed to ensure success in their capital projects.
Large investment projects are complex and resource-intensive. They require careful planning, budgeting, monitoring, and control to ensure successful execution. These projects play a vital role in a company’s growth, financial stability, and operational efficiency. To manage them effectively, organizations need a structured and integrated digital solution.SAP Investment Management (IM) provides a comprehensive framework to manage capital investments efficiently. The module integrates seamlessly with other SAP components such as Project System (PS) and Asset Accounting (AA), enabling end-to-end visibility and control over capital expenditures.This blog highlights a three-part series of papers that together explain the full capabilities of the SAP Investment Management module:Part 1 – Configuration of the Investment Program and Appropriation Requests (Requesting Measures)Part 2 – Setup of Investment Measures (WBS or Internal order) and the Settlement ProcessPart 3 – Step-by-step execution process for managing large-scale capital investmentsBy combining insights from all three papers, this blog serves as a complete guide to SAP Investment Management, offering practical knowledge for finance, project management, and SAP professionals seeking to improve how they plan and control large investment projects.INVESTMENT MANAGEMENT IN SAP: A KEY TOOL FOR MANAGING LARGE EXPENDITURESInvestment Management (IM) is a key module in SAP that helps organizations plan, monitor, and control major spending initiatives. These expenditures can be capital-related, such as investments in infrastructure, machinery, or technology, or non-capital, including R&D, acquisitions, or major maintenance projects.The IM module allows companies to design their own investment program structure based on business needs, consolidating all approved and planned costs into a hierarchical framework. Using requesting measures, such as Appropriation Requests, organizations can plan long-term investments that often span several years in line with project lifecycles.SAP IM also incorporates workflow-based approvals, ensuring strong governance and compliance throughout the investment process. While IM focuses on planning and budgeting, effective investment lifecycle management also requires linking it with Investment Measures, the operational side of managing project costs and asset creation.Investment Measures (WBS or Internal order) in SAP are the objects that receive budgets, track planned versus actual costs, and settle expenses to fixed assets, cost centers, or general ledger (G/L) accounts. Depending on the investment type, these measures may take the form of WBS (Work Breakdown Structure) elements or internal orders.In essence, SAP Investment Management brings together four key components, which work seamlessly to ensure accurate, transparent, and efficient management of capital and non-capital investments. The following section explores these components in more detail.STEPS IN MANAGING LARGE EXPENDITURES IN SAP INVESTMENT MANAGEMENTFig 1: SAP Investment Management OverviewSource: SAP Help Portal on Investment Management (Overview) Requesting Measures (Appropriation Request): Similar to a purchase requisition, an appropriation request is used to request approval for large expenditures. This request contains critical details about the project, including the planned costs. A standard SAP workflow is set up to ensure that appropriation requests are reviewed and approved before any funds are committed.Investment Program: The investment program provides a hierarchical structure within the organization to plan, budget, and distribute large expenditures. The program allows the organization to define its own structure based on needs. All approved planned costs for requesting measures are aggregated within this hierarchy. Costs are planned from the bottom up, while budgets are allocated from the top down. Investment measures can only be assigned to the lowest level in the hierarchy, called “end nodes,” which can include internal orders, WBS elements, or maintenance orders.Investment Measure: Investment measures are used to track the planned budget and actual spend. These can be Project System (WBS) elements or Internal Orders. Investment measures receive the budget allocated from the investment program and track the actual expenditure as it occurs. It tightly controls the spending by monitoring the planning, budgeting, actual, commitment, and remaining available funds. Investment measures are closely linked with the Asset Accounting module in SAP, ensuring that any unallocated spending at period-end is properly settled into assets under construction (AUC).Settlement planning and settlement: Once a project or investment measure is completed or partially completed, it must be settled. A project can be settled to various objects, such as fixed assets, cost centers, other investment measures, or general ledger accounts. The settlement process requires careful planning to determine how funds will be allocated (e.g., by percentage, amount, or proportion). Once the project is ready to settle, the settlement rules are defined in the investment measure to transfer the financial information to the appropriate accounts..The whole design of implementing and end-to-end execution investment management in SAP is divided into 3 papers as below. These papers are free to download and use:Paper 1: Laying the Foundation: Structuring Investment Programs and Approval Request— A Guide to Initiating and Organizing Capital Investments This paper covers the initial steps in managing large projects through SAP Investment Management, including the setting up of investment programs and the process for requesting measures. The paper can be downloaded from the link below: Part 1 – Configuration of the Investment Program and Appropriation Requests (Requesting Measures) Paper 2: From Planning to Action: Configuring Investment Measures and Settlement Processes — Ensuring Control and Accountability in Capital ProjectsThis paper focuses on configuring investment measures and defining settlement rules, providing the foundation for effective planning, tracking, and accountability in capital project execution. The paper can be downloaded from the link below:Part 2 – Setup of Investment Measures (WBS or Internal order) and the Settlement ProcessPaper 3: Executing Large Investments: A Step-by-Step Guide to Project Delivery and Oversight— Managing the Full Lifecycle of Strategic ExpendituresThe final paper outlines the end-to-end execution process for managing large-scale investments using SAP, including project tracking, monitoring, and lifecycle management. The complete end-to-end Investment Management execution process in SAP includes the following five key steps:Establishing the Investment Program Structure.Initiating Investment Plans through Appropriation Requests.Building Project System Hierarchy.Cost Planning and Budgeting.Executing and Settling the Project.The paper can be downloaded from the link below: Part 3 – Step-by-step execution process for managing large-scale capital investmentsConclusionEffectively managing large capital investments is vital for an organization’s financial health and long-term success. In this three-part series on SAP’s Investment Management (IM) paper, we’ve presented a complete framework for planning, executing, and settling large-scale expenditures in a structured and efficient way.Paper 1 laid the foundation by configuring investment programs and requesting measures, establishing a clear structure for tracking planned spending.Paper 2 focused on designing investment measures and settlement rules, enabling organizations to monitor and control project execution throughout the investment lifecycle.Paper 3 demonstrates the end-to-end execution process of large capital projects, from master data setup to project execution and final settlement.By following this integrated approach, organizations can confidently manage investments, keeping projects on budget, meeting deadlines, and aligning with strategic objectives. SAP’s IM module helps navigate the complexities of capital investment management, optimizing financial operations and supporting both short-term and long-term business goals.Together, these three papers provide a step-by-step guide to managing strategic investments, giving businesses the clarity, control, and insight needed to ensure success in their capital projects. Read More Technology Blog Posts by Members articles
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