Aligning strategy with execution is at the core of any long-term business plan, but as enterprises grow it becomes more and more difficult to achieve the level of oversight, transparency, and control needed to accomplish that alignment.
Comprehensive capital planning helps to put owners in the driver’s seat, so they can actively engage where and when they’re needed.
First, let’s talk about the pain points owners already experience if they haven’t migrated to a comprehensive capital planning process yet. The simple fact is most organizations lack adequate visibility across their operations, and this has a number of cascading effects. Effective decision-making only happens if the decision-maker is fully informed — if not, their decisions may fail to optimize the value of a portfolio.
Why are visibility and transparency limited? Flawed and outdated processes cause disconnects between people and projects, and for that matter between people and people. If those requesting the work, those approving and funding the work, and those more deeply involved in executing and managing the work aren’t effectively communicating, then these siloed teams miss the opportunity to mitigate risk in their project before it’s too late.
It’s not just being able to chat around the watercooler, either — it’s about the fact that when your data and processes are organized, your dollars are aligned with a strategy. In turn, the opportunity for risk is diminished.
Establishing comprehensive capital planning
The absence of a technology-enabled intake process is one of the first problems to consider, since it’s at the top of the funnel. Having a reliable source of data plus streamlined communication tactics at the start is a prerequisite for things like prioritization, cost estimates, and funding decisions to be accurate, effective, and internally consistent.
Insights based on analysis of aggregated data are also crucial when identifying trends and opportunities, but if the data can’t be trusted to begin with, any subsequent analysis is equally spurious.
This knowledge isn’t just a nice to have; with projects competing for a limited resource pool, prioritizing and projecting with confidence are essential. Comprehensive capital planning uses a set of tightly interconnected tools and processes to make your data actionable and valuable for your organization.
“The overall theme is process automation that then drives real-time insight,” said Procore’s Conor Norris in a recent webinar. “By owning the data and the process behind it, our clients are then able to better benchmark vendor performance and project performance. By automating a lot of this information we can then feed it, not just to the capital planning team at the portfolio level, but gain these sorts of insights that, historically, you just don’t have, since all the information is in so many places.”
So what does such a solution look like?
To begin with, you have unified, end-to-end planning, from intake through project delivery. It can’t be overstated how important continuous oversight of this information is: not only does it mean there is always a single source of truth for anyone involved along the line, but it prevents the kind of confusion and potential for error that occur wherever two methods, platforms, or solutions interface.
It may well be that solution A is perfectly good for intake and capital planning, and that solution B is perfectly good for project management and delivery. But there isn’t a single, connected data stream between these business units or their resources. Consider how many projects are in the air at any given time, and at how many different stages — your teams will constantly be consulting both solution A and B, exporting and comparing back and forth constantly. This causes delays, inconsistent and potentially erroneous data, and general administrative overhead at all levels.
All for one, but not one for all
Of course your comprehensive capital planning solution need not be one monolithic platform, but a set of them that have been standardized from a data, process, and integration perspective for seamless intercommunication.
An example of this is in project management, where the budget, on-the-ground cost, forecasting and other aspects may involve different tools. You might not find a single tool for all, but if you have confidence in data portability between the tools you do use, that’s more than sufficient. And it’s one less source of potential error or lost time in your overarching project, program, and portfolio management process.
When considering a project management solution, owners should ask the question as to whether or not the platform can integrate or has a partnership with a capital management software provider that meets the needs of their business.
Making up for lost time
Connected and interoperable data platforms allow for faster and more informed capital allocation decisions, not just by five minutes, but by days and weeks in aggregate. And those decisions are easier to check when you can easily run data and predictions through multiple stages of vetting and checking. This also means that access is simplified across your teams, with fewer siloed solutions accounts and interfaces to track and maintain.
“Any kind of delay in the flow from one step or one organization to the next, or paperwork that gets lost along the way… it’s all things that disrupt that ability for us to move and to do it collaboratively across every group,” said Andrew Ronchetto, from UMT360, in conversation with Norris. “That is a part of the business process. It’s a critical thing here — that bringing it all together is a key element, being able to show it and use it and do it in real time.”
That single source of truth becomes an invaluable resource, reducing version control errors that occur when data needs to pass through multiple tools or solutions just to wind up in a readable, complete state that’s useful to leadership making high-level decisions. After all, portfolio-spanning strategies demand portfolio-spanning insights that can be delivered in reliable and consistent fashion.
“Strategic portfolio management is a massive space and some companies take forever to try to accomplish every dimension of it,” said Ronchetto. “But I think what’s exciting for us, and our partnership with Procore, is that we’re able to just almost instantaneously start to bring to life the governance within an organization, through a platform, and pass that on through the entire life cycle of a project. That’s how we gain traction and momentum, and why this is so important.”
The bottom line is that by combining project oversight and governance with capital planning and integrating it all in a single, connected solution, you are better able to make informed decisions — and see how those decisions affect your business throughout the lifecycle of the work. Your capital plans will be more current and more accurate, and the data will be more accessible to the appropriate decision makers, before project approval and continuously throughout the lifecycle of those projects within the approved portfolio of work. Reduced risk, increased insight, and empowered leadership make comprehensive capital planning a must-have for any business looking to deploy capital more efficiently and effectively, and / or maximize its growth.
Watch the webinar, Comprehensive Capital Planning for Owners: Procore + UMT360 to hear from our engineering & construction portfolio management partner, UMT360 and Procore owner industry expert, Conor Norris.