Capital Projects for Owners
State and local governments, utilities, oil & gas firms, mining and other commercial organizations managing capital assets follow a fairly standard process with variations for type of organizations and specific cultural differences.
Capital Spend Budgeting
The basic process starts with the annual planning cycle wherein the governance council determines the budget available for capital spend based on funding available from internal and external sources like grants, bonds, etc.
- Identify funding sources and allocated funds for planning periods
- Allocate total budget across different lines of business
- Define different types and available capacity for constrained internal resources
- Define Strategic Scorecard and Metrics to be used to evaluate proposals
Collect Proposal Projects
Proposals for capital spend are defined by each business line. These may be new proposals or approval for renewed funding for ongoing projects. Each proposal includes:
- Business case for the proposal including objective, scope and justification.
- Funding requests based on new estimates or a forecast for ongoing work showing spend to date and planned future spend.
- Initial plan year resource requirements for constrained resources
- Strategic score and risk assessment
- Benefits and proposed values for key metrics
Portfolio Review and Selection
Portfolio Analysts collect submitted proposals, perform their analysis and submit a select set of proposals for funding approval
- Submitted projects are collected in a planning portfolio with funds requested, resource requirements, strategic and risk scores, benefits and key metrics.
- Portfolio analysts then model different scenarios ranking projects by strategic score, risks, funds required, benefits, key metrics, etc. ensuring that the Overall funds requirement does not exceed assigned budgets.
- They can compare different scenarios and submit selected version for approval.
- The governance committee will review, adjust and approve projects for funding allocation.
Project Planning, Execution
- Plan scope, schedule, budget, risk
- Contracts are finalized and work is performed
- Costs are collected and project performance is measured based on variance to budgets, earned value, EACs and status reporting. On completion, the developed assets are defined and sent over to the ERP for capitalization and O&M.
- PACE Offers detailed project execution functions including deliverables tracking, collaborative execution, issue, change and risk management and detailed cost management including tracking CapEx and OpEx and variance to budgets.
- Track project spend against allocations from funding sources by task and cost categories and allow for adjustments to allocations to safeguard against under and over spending.
PACE is Frontrol’s project delivery application purpose-built for all segments of the capital-intensive engineering and construction industry – Owners, Architects & Engineers, General and Subcontractors, and other service providers – delivering scalable, affordable, and deeply integrated project and cost management.