CAPEX Planning with a simple enhancement in SAP

Companies today have been using the SAP standard procurement processes for most of the procurement being done across industry domains.  Although we do have CAPEX planning feature in SAP ERP Central Component (ECC) or in SAP module like Business Planning or Consolidation (BPC), it is always a decision pending for organizations as to which options that need to be taken.

We at Ranadive Consultancy Services – RCS have taken an initiative to introduce the functionality of procurement of Capital Expenditure (CAPEX) items by developing an enhancement which is seamlessly integrated with the SAP Material Management (MM) module.

The  CAPEX enhancement  makes use of the standard master data information of Company, Plant, Business area, Location, Profit centre, Cost centre, Order type, Object Class and Asset Class. Static dropdown lists which are specific to the business rules of the customer are provided. New business processes like Allocate Budget, Assign Approver Levels, Create Capex, Approve /Authorize Capex  and Create Asset Code have been introduced.  A feature to increase the additional Capex amount for approved Capex transaction has also been provided.

The CAPEX enhancement  has been integrated with the SAP MM module leveraging the standard master data available in SAP. The enhancement must be used whenever  procurement of high value Capex items are being done for organizations at any time of the year.  Some of the business benefits that this enhancement offers are :

  • Useability : User interface is in synchronization with the SAP delivered functionality
  • Flexibility : Code is flexible to incorporate specific business rules
  • Maintainability : Master data is maintainable with standard Transaction codes

Master data that is required for the CAPEX enhancement is checked for availability. All drop down list are also checked. Budget is allocated as per the specified plant. The number of levels of Capex approvers is configured. Transaction is run to create a Capex item that is either bought out or made in-house. The amount being input is checked if it meets the allocated budget. The approval process goes through the specified approver levels. Once the Capex is approved, an internal order is generated. Finally, an asset code is created which is integrated with SAP Finance(FI) module. An approved Capex transaction amount can be amended, which will be checked with the allocated Budget and it will also go through same approval process.

We appreciate your valuable feedback on the blog and we look forward to show you a demonstration of the CAPEX enhancement in SAP.

Author: Vishal

Vishal is lead Technology Consultant and founder member of Ranadive Consultancy Services Pvt. Ltd. He is carrying Engineering degree in Electronics & Telecommunication Engineering from University of Pune. He is a multifaceted professional with core competencies in Computational techniques, ERP & Business Consultancy. With more than 14 years of experience in his field