You use investment programs to manage budgets that can apply to a large number of individual measures (that is, internal orders or projects). An investment program is made up of individual program positions that are linked to each other in a hierarchical structure.

You can define this hierarchical structure in any way. It is not dependent on organizational units in the R/3 System (business areas or plants, for example). You could structure the hierarchy to agree with the organizational plan of your enterprise, for example. Or you could base the structure on the size of the investment measures assigned to it. The allowed measures are: internal orders, maintenance orders, and projects (top WBS elements and other WBS elements).

Overall plan and overall budget values represent the approval side of the investment program. In addition, you can also manage annual values in the investment program. In the system you use orders or projects to manage the investment measures you want to carry out (for example, construction of a new administration building, procurement and installation of new hardware, expansion of plants or production facilities, and so on).

The main differences between orders and projects are outlined below:

• Only projects enable you to create a hierarchical structure for the objects that collect costs.
• Orders are always one-dimensional. For example, it is not possible to distribute budgets for several orders in a structured form from top to bottom.
• Projects also offer the advantage of their integration with networks and the functions of logistics. With orders, for example, it is not possible to carry out capacity and resource planning.

In the investment program used in this example, you will enter the planned investment values and the investment budget, and manage both for the enterprise as a whole. The highest level in the investment program is the node for the controlling area. On the next level, the program splits into two nodes for the investments of the two subsidiary companies that belong to this controlling area. These two subsidiaries are the German and British subsidiaries of our IDES model company. In this scenario, we focus on the part of the investment program belonging to the German subsidiary. The British subsidiary manages its own values. In order to reflect its organization, the German sub-tree of the investment program is further divided into investments for the following areas: Production, Administration and Sales. In the Administration area, investments are planned both in a new administration building, as well as in new information technology. The Administration node is further sub-divided to reflect these differing investments.

(Color key: green: investment program positions; red: investment project; violet: investment orders; blue: fixed assets)