Investment decisions play a key role in business, particularly where large sums are involved. The investment volume of the MAN Nutzfahrzeuge Group, for example, which processes several hundred projects every year ranging from the purchase of a video projector to the construction of a new administration building, is around Euro 350 million.
At MAN Nutzfahrzeuge, several departments are involved in the process of investment planning and decision making. Fully integrated investment management is therefore required in order to process the projects quickly. Since August 2005, the Investment Management module of SAP R/3 has offered the departments involved – asset management, asset accounting, purchasing, controlling and the Executive Board – a standardized basis for this. The solution has reduced the work of the central budget controlling department by almost a quarter compared with its former workload.
Standalone solutions mean extra work
Previously, the various parties involved used a combination of SAP R/3 and different standalone solutions based on Excel and Access for planning and decision making relating to investment projects. This procedure was paper-based and laborious, as the data in the various applications regularly had to be input, reconciled and changed manually, e.g. in order to perform budget updates.
For investment planning, the central budget controlling department first sent the Excel planning templates to the decentralized planners in the departments concerned and then compiled the lists sent back to them in the Access database. The planning document was then prepared for authorization by the Executive Board. When the authorization round was complete, unauthorized projects were deleted from Access, while authorized projects had to be entered manually into SAP R/3 Project System (PS) for investment processing. For analyses such as planned/actual comparisons, the cost information was sent back to the Access database.
There is only one true way
Faced with several hundred investment projects needing to be processed every year, the company decided to install a standardized solution for all the departments involved. In future, the SAP-R/3 Investment Management (IM) module is intended to support the whole process. The maxim “There is only one true way – and that’s SAP IM” certainly applies in this case. The company is utilizing nearly all the SAP R/3 modules. The MAN Group is currently implementing SAP Business Information Warehouse (SAP BW). The company’s implementation and software integration partner was the consultancy company Plaut, with which MAN Nutzfahrzeuge had already successfully cooperated on a controlling project.
A challenge when setting up the investment management system was the rollout capability of the solution. Ultimately, the system needs to be used by production and sales sites of various sizes within the commercial vehicle group both at home and abroad. The project team therefore involved representatives of individual branches in the project and created a standardized, well documented process and a clearly structured system that supports all sites, no matter how large or small.
A database for everyone
The new solution now provides end-to-end support for the whole planning and decision-making process. The individual departments still plan their investment projects on a decentralized basis, but now they input the data directly into the solution. The central authorization round and subsequent budget allocation processes access this data, approve the budgets in IM and manage them. Michael Neubauer, Head of Investment Management at the MAN Nutzfahrzeuge Group, defines the key advantages: “Whereas before we had to reconcile the individual systems on an ongoing basis which required a lot of manual effort, now all parties involved in the process have access to a standardized solution with round-the-clock availability. We have been able to streamline our processes in crucial areas and then integrate them into our SAP system.”
MAN Nutzfahrzeuge now also has a new reporting system in IM and PS which allows the whole portfolio of projects to be analyzed at any time according to different criteria and KPIs. As well as various standard reports, this also enables central budget controlling with analyses according to year, investment type, reason for investment, responsibility and status. The information system also provides a call-off history from the original budget to the carry-over and allows detailed views of the budget updates. The investment portfolio can be broken down to the tiniest detail and the actual costs can be accessed instantly, as can the associated scanned-in documents.
These reports facilitate the work of the central budget controlling department enormously. For instance, it used to take two employees a whole week to gather and reconcile the necessary data from the various applications in response to a request from the Executive Board. Now it takes one employee just one hour to do this, as the figures are available to him at the touch of a button. Michael Neubauer anticipates still further improvements with SAP BW. The solution is to be introduced at the end of 2007 with the aim of centralizing the reporting for all the companies in the MAN Nutzfahrzeuge Group. Currently, when requests are received for consolidated reports, the reports for the various sites still need to be called up individually and then pooled manually.
Ever since it went live, the new solution at MAN Nutzfahrzeuge has proved invaluable. The company has already successfully implemented the 2006 investment planning with SAP IM. The former workload has been considerably reduced, as the data only has to be input once and no reconciliation with other systems is required. Up-to-date information is available to all the departments at all times. As the solution minimizes the risk of input errors, this has enhanced the quality of data.
At the company headquarters in Munich, four employees in the central budget controlling department currently work with the system, along with around fifty users in the decentralized controlling departments of the individual divisions. It is now being rolled out internationally for the whole group on a step-by-step basis. The production sites in Poland, Austria and Turkey have already gone live with Investment Management. The rollout is currently underway in the international sales sites and the bus division Neoplan and this should be complete by 2007. SAP is therefore making a significant contribution to the cost-effective production of MAN trucks.