Integrate, Empower and Automate - Three keys to capital planning

The road to financial stress for CRE teams is paved with capital plans that look good on paper, but ultimately lead to common pitfalls. For example, there’s the plan that—while faithfully followed all year long—leads to a mad dash to increase capital spend in Q4. And countless plans are stymied each year by cumbersome spreadsheets, departmental bias and under-informed vetting.

If these scenarios sound familiar, you’ve met the “capital monster”: a beast that haunts many organizations, inhibiting business goals and growth opportunities. These impacts aren’t just a burden on one CRE team, facility or project; they can undermine an entire organizations’ growth trajectory.

The good news is, you can defeat the monster and create an effective, efficient and achievable capital plan in three key ways.

How to build a winning capital plan

No organization is immune from the capital monster—but you can banish it from yours with a refreshed approach. Following are key ways to create a capital plan that adds strategic value: 

1. Integrate - Develop a centralized, objective and consistent process that integrates and prioritizes requests from IFM, Portfolio Management and Business Units

A strong capital plan is not bound to a single department, facility or even time frame. To truly support the whole organization’s success, you need a standardized, data-driven Capital planning platform and process. That process must set aside personal bias, departmental preferences to balance the needs and opportunities of all business lines in relation to broader business strategy.

Be sure to look beyond than the current fiscal year. Too often, companies limit capital planning functionality based on the conventional calendar, when they could instead drive strategy by evaluating how expenses, linked together, will affect financial posture now and into the future.

By eliminating arbitrary timeframes, you can better evaluate not just short-term project or facility needs—you can build a more purposeful and informed strategy that tackles challenges like deferred maintenance backlogs, and ramps up mid- and long-term capital funding.

A comprehensive, integrated planning process will then help streamline capital allocation and project execution—improving transparency, driving governance, and ultimately enhancing forecasting and decision-making for better business outcomes.

2. Empower - Define and empower centralized oversight

Organizations generate the most benefit from their capital plan when executives and CRE delivery teams are strategically aligned. A dedicated capital planning team can help coordinate disparate teams, priorities and information across the lifecycle of capital planning. By centralizing oversight with a capital planning team, you can also deepen process efficiency and accuracy.

To build out this team, look for people or organizational partners with expertise in project vetting, scoping, budgeting and analytics, as well as deep understanding of your unique corporate culture and objectives. Members should be able to work collaboratively amongst each other, and with colleagues and vendors across the organizational ecosystem.

With the right skillset, this centralized team can help you move from reactionary mode, to proactive planning for smarter capital spending.

3. Automate - Take advantage of technology

A best-in-class technology platform integrates construction management, project management and capital planning tools to help take capital spend strategy from tedious and reactive to nimble and proactive.

The right technology platform enables your capital planning team to draw from historical information about any past project, in order to better evaluate future opportunities. You’ll be able to connect disparate data points, fostering transparency and objectivity throughout vetting, allocation and real-time monitoring. Meanwhile, automated algorithms and customizable dashboards can help expedite budget forecasts, as well inform analysis and strategy.

Banish the capital planning monster

With best practice process, expert plan management and leading technology tools, you can avert common pitfalls and manage capital spend within target parameters. Ultimately, a world-class capital planning strategy will propel business productivity and growth to help your organization achieve its ambitions.