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Why My Capital Planning Role Is So Challenging


Contributed by InVizion

Although roles in planning differ, we’ve seen, time and again, the same handful of challenges related to the effective planning and execution of capital programs. If I walk a mile in a Director of Engineering’s shoes, here’s how my world would look…

I have a huge responsibility to manage competing demands for my department’s budget – not just all the capital projects but also the operational expenses. And I also have to be cognizant of internal and external stakeholders, regulators, etc. It’s more than just dollars and cents. So, for months, I wrestle with the annual budgeting process that involves a lot of back and forth including both top-down guidance along with aggregated requests from my staff. Project requests need to be reviewed and prioritized multiple times then consolidated for approvals.

I also know that if I want to be credible, I need to make data-driven decisions. I’ve created some intricate templates and spreadsheets; some even have macros to make sense of the detailed data collected. Then the mechanical manipulation and manual translation from specific line items that only the corporate financial system can understand. As can be expected, over time the spreadsheets have continued to grow more complicated and convoluted. I must admit I spend way too much valuable time validating formulas and chasing linked cells across all tabs on the spreadsheets. There’s scant time left for real analysis to make good decisions.

I’ve even tried to use the enterprise budgeting software to evaluate the consolidated bottom-up requests, but at that high level there is not enough detail to analyze trade- offs and evaluate impacts of resource allocation scenarios. The back-office systems are simply disjointed from operational reality.

As a last-ditch effort to optimize my budget planning I have tried to use asset/project management software. I had hoped this will enable me to make more credible trade-off decisions in particular by analyzing projects at a lower level of detail. However, I realize quickly that I’m buried in too much detail – do I really need to plan out all the details of every single project to prioritize them? I need a middle ground where I can see the forest and also the trees, and that’s not by using a microscope.

Do these challenges resonate with you? I’m sure there are elements that do. Essentially, as a capital program leader, it really boils down to having 3 key capabilities to enable success. You need to be able to…

Adjust – Projects are always in a state of flux, but if you can increase visibility into unplanned risks and changes using Cloud-based project intelligence systems, you’ll be able to rapidly address the impacts of performance variances and changing constraints. And the way you do it? Partner with a cloud provider that you can trust. They can help determine cost-effective solutions to automate the process of combining data from existing (often siloed) enterprise systems and scattered, manually managed spreadsheets.

Optimize –With improved visibility from project intelligence systems, you can now address the inefficient allocation of your capital and resources in a faster, more streamlined manner. What you need is the ability to objectively develop a roadmap that optimizes the execution strategies that increase the bottom line for your projects. Unless you can confidently leverage accurate data that utilizes modeling capabilities for variance impacts and what-if scenarios, it’s going to be tough going (or nearly impossible). Leveraging the knowledge from a trusted cloud provider that truly understands project lifecycles will be your ticket to gaining the project data insights your business needs to be successful.

Empower – Finally you can now avoid slow, inaccurate, and last-minute decision-making for your projects. How? By clearly communicating your defensible and bold plans to key stakeholders.  You’ll be able to deliver because you’re able to rapidly create agile, forward-looking reports along with dynamic dashboards of credible program and portfolio plans. You can achieve even greater success with a reliable project management cloud service, that enables access to real-time project data to help you make better, more informed business decisions.

In the end, planning, executing, and managing projects and programs to meet business goals is a challenging process. But those challenges can be minimized and mitigated when distilled down to three actionable areas: Adjust, Optimize and Empower. Strategically addressing the challenges posed by those areas and adopting their approach will help guide your way to planning excellence.

InVizion enables companies to quickly combine project data from disconnected enterprise systems – like finance, supply chain, asset and project management applications – for accurate planning, forecasting, reporting & what-if analysis to reduce portfolio costs minimize investment risks and speed project execution. Learn more about InVizion.

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