SAP CAPEX Request Management Case Study

How a Chemicals Manufacturer Improves CAPEX Request Management with Process Re-engineering & Automation

A specialty chemicals manufacturer based in Delaware employs 5,200 people in 120 countries. They are starting to automate the process of capital expenditure (CAPEX). With SAP Fiori, based on results delivered during its proof-of-concept stage, they aim to reduce customer equipment deployment times and improve process efficiency.

This case study explains how the client of IQX Business Solutions, plans to improve CAPEX request management through IQX Capex.

The Need for Faster Deployment of Dosing Solutions for Customers

The customer equipment team demanded a change. They submit thousands of capital requests each year.

Currently, the company operations run CAPEX requests and approvals through a legacy HCL Notes (Lotus Notes) system. The process crosses into several other systems, including Excel, SAP ERP, and Salesforce. While Lotus Notes can accommodate process customization, approvers have a difficult time using it. They want a user-friendly mobile-optimized solution.

The existing, customized system runs a loosely defined and documented process with no financial authority validations and no visibility into approvals. Request submitters have no way to see if something, or someone, holds up their request.

Apart from having no integration with the SAP ERP system, they have no way to automate reminders for approvers and no mobile capabilities.

The customer equipment team demanded a change. This team submits thousands of capital requests each year to deploy dosing solutions that blend and produce chemicals at customer sites. These types of requests make up more than half of the CAPEX requests. The CAPEX request and approval process takes several weeks, but its customers often need their dosing solutions deployed in days.

Richard Frykberg presenting Controlling CAPEX Budgets with SAP Fiori. A discussion on moving away from systems like spreadsheets, Lotus Notes and Sharepoint.

This manufacturer attempted to migrate the whole process to SharePoint, but the project failed due to complicated integrations and approval processes. The project was abandoned and the team returned to the drawing board.

SAP Fiori Apps Lead to Big Efficiency Gains

Like most business automation and transformation projects, the manufacturer had to start by mapping and documenting its processes, which took eight people two full days. The exercise helped them realize that the business users have been wasting a significant amount of time due to the legacy process. This was an opportunity for them to improve and optimize the process.

About 300 people participate in the CAPEX request submission and approval process, including plant managers, customer equipment engineers, and senior management. All these stakeholders have different requirements to make this process successful.

Eventually, they decided to leverage SAP Fiori. The integration between SAP Fiori apps and SAP ERP empowers users to perform real-time lookups for active lists of shipments and include the financial authority matrix.

At first, they tried building their own app. As their development team did not have the expertise, the company turned to IQX Business Solutions for pre-built, ready-to-run Capex Fiori Apps.

The solution included a series of Fiori Apps with built-in checks and balances that pulls active spend and commitments against budget lines to see if the request fits within the existing budget.

With Lotus Notes, submitters could not easily see if the request conflicted with the budget until after they submitted the request.

A key benefit of SAP Fiori is that its user interface is optimized for both desktops and mobile devices, one of the drivers behind this project. Now, the senior managers use the mobile version of the app together with IQX OneList, which enables them to perform one-click approvals with all the necessary information.

Previously, it was cumbersome for senior managers to switch between Lotus Notes and SAP to approve requests and reconcile information in the ERP system.

A proof-of-concept successfully proved that the IQX Capex Fiori apps shorten the fulfilment and deployment times of customer orders for dosing solutions from over four weeks to less than two weeks.

The solution has received positive feedback from business users who are looking forward to using it.

What Does This Mean for You?

The following four considerations can help you better automate your CAPEX processes:

1. Map and document processes that need streamlining. Technologies generally do not turn bad processes into good ones. They accelerate processes. To apply any process automation or process management tool, first map out and understand the process. If the process is not helping the
right people accomplish their tasks in the right way, re-engineer it to ensure that it does.

2. Ask stakeholders what they need to make the process successful. In this case study the senior management and the commercial team needed mobile capabilities, and its business users needed improved visibility into the CAPEX approval process. It was apparent that seamless integration
between the CAPEX request tool and the SAP ERP system was at the top of everyone’s list. The company IT team worked with IQX Business Solutions to fulfil the most important requirements of all stakeholders.

3. Build strong integrations if a process requires accurate, real-time data from the SAP ERP system or needs to report results back into that system. No one wants to bounce between different systems or to manually copy information from one system into another. SAP Fiori extends the capabilities of SAP ERP into custom apps without needing to customize the core.

4. Innovate in-house but leverage third-party expertise. SAP Fiori offers opportunities for IT departments to build innovative custom apps to solve their business users’ problems. IT managers should take advantage of the opportunities, but if they encounter difficulties with app development, they should evaluate whether third-party solutions can fulfil their business needs more efficiently.