Capital Program Management: Modern Challenges and Solutions
Capital program management groups related construction projects together, helping organizations plan, fund, coordinate, and execute work across multiple locations. Programs replicate projects on a large scale—from building brand-new stores to adding additional equipment (like ice cream machines, pizza ovens, or freezers) and expanding inventory space.
Well planned and executed programs can have immediate and long-term benefits to your business. But often, the scale of the work and number of moving pieces get in the way. Instead of executing one-off projects, program managers oversee dozens of similar projects at once, often managing hundreds of millions of dollars. These projects may be scattered across dozens of states or even multiple countries, each with completely different vendors, internal teams, regulations, and circumstances.
A single program is a lot to manage. But enterprises often make capital program management far more difficult than it has to be. Despite the massive investment in capital assets and the incredible undertaking each capital program can represent, they lack the infrastructure to streamline projects and make them repeatable. Mass renovation projects start, stutter, and languish in unnecessary or inefficient processes.
In this article, we’ll explore some of the most common problems enterprises face with capital program management, as well as the solutions modern organizations use to streamline, standardize, and improve this critical process.
Capital program management challenges (and how to overcome them)
There’s a lot of red tape in capital programs. Not all of it is necessary. Most of the obstacles involved in capital program management stem from the sheer scale of capital operations and the size of the enterprises that manage them. And all of them can be solved by the right capital program management software (CPMS).
De-centralization
Everyone wants to make wise decisions about what to do with capital assets. But when the information your decision makers need lives in disparate spreadsheets, applications, lease documentation, financial records, and complex folder systems, it takes time for everyone to get on the same page. And while you want to give your organization every possible advantage, cobbling together disconnected software and processes can increase the likelihood that someone will make a mistake, work from outdated information, or miss some key detail.
A lot of enterprises also use solutions that were designed for one-off construction projects, rather than groups of related projects that are part of a program. When you look at a body of similar work with focus on execution, cost and closure, there are patterns and expectations that reveal themselves. If you simply jump from one project to another while working through lists, these patterns and anomalies are harder to recognize.
With a centralized system built around programs, you can dive into those elements that look out of place and resolve them with the information at your fingertips. The faster you can collect and analyze that information and resolve each issue, the more projects get done.
Tango Projects, our CPMS solution, brings together all the tools and information your teams and decision makers need to create, approve, and proceed with capital program plans. You control who has access to what information, but nobody needs to wade through email threads or hunt for documents relating to a project. Everything lives in the same place, and you can zoom in on individual projects or analyze the entire program.
A lack of centralization also makes it difficult for good ideas to get visibility and gain traction. You may have employees who are sitting on brilliant opportunities right now because they can’t present them to the right people, they saved them somewhere they’ll be forgotten, or they couldn’t jot them down when they had the data in front of them. You could be stuck investing in 2nd tier opportunities while better ideas circulate through informal processes or get lost in separate channels. Perhaps a store is a good candidate for relocation, or has the potential to close in the near future, but no one calls that out, and so you wind up making significant investments in a facility you may not stay in.
Tango Projects gives your team a convenient tab for sharing capital program ideas and notes, which you can easily access while you’re performing analyses and have the data at your fingertips. Everyone can see the potential questions to investigate, problems to solve, and opportunities to explore in your portfolio along with the rationale behind them. You can create an initiative with pro forma documentation to explore what you could expect to happen if you followed through on that idea.
Lack of standardization
While you may have shared processes for particular aspects of capital program management, such as acquiring approvals, handling change orders, or financing a program, the nuts and bolts of program management can often seem more like a free-for-all in large organizations. Everyone adopts their own tools, solutions, and approaches, and the exact process being used winds up depending more on who’s in charge than what’s being done.
How your organization works with outside vendors, implements your bidding strategy, coordinates and prioritizes projects, organizes work, and generates reports should be consistent regardless of where the work is being done and who’s involved. Sure, there will always be variables that don’t directly translate from one project or program to another—international construction projects, for example, may be subject to different regulations and parameters. But using a standardized approach to capital programs doesn’t mean you can’t still address project-specific needs. And standardization makes it far easier to compare projects and evaluate opportunities in relation to each other.
By bringing everyone onto the same platform and putting all your programs in one place, Tango Projects helps remove variables and standardize your processes. Instead of several piece-mealed solutions, every program runs through the same system and uses the same formats.
Unnecessary legacy processes
Processes are important. They ensure your resources are used wisely and that you handle projects consistently. But some processes are rooted in preferences, not optimization, standardization, or compliance.
If people have to say, “This is just the way we do things” to justify a particular process—such as approving unexpected work associated with an existing project—that process might be holding you back. It’s not uncommon for time-consuming (and unnecessary) projects to originate with an executive’s personal preferences. And these processes can linger for years after the executive moves on, slowing down work and causing delays for no one’s benefit.
We often find that enterprises can let go of about one-third of the processes involved in their capital program management, cutting the red tape and letting teams get more work done.
Difficulty seeing the big picture
Say you need to get milk from the grocery store. It’s extremely inconvenient, and the timing is terrible, but you make it work. When you get home, you discover that your roommate was already in the area and could’ve easily stopped at the store for you.
In capital program management, it’s easy to lose sight of where projects are in relation to each other and not see how teams can support one another. By planning around your locations, you can minimize the disruption to your business in the trade area, queue back-to-back projects with the same vendors, share equipment or personnel between stores, prioritize projects based on which ones will have the biggest impact, and make your whole program more efficient.
Geographic information systems (GIS) software lets you see your locations on a map and analyze their trade areas, so you gain a fuller understanding of how a construction project might affect nearby sites, as well as how to plan and coordinate simultaneous work on stores. Tango Projects brings this GIS mapping to your capital programs, so you can visualize each project and see the big picture.
Dependence on individual employees
Even in global enterprises, traditional capital program management is dangerously prone to bottlenecks. It’s a complex process that completely depends on one’s knowledge of the enterprise’s unique portfolio, systems, strategy, data, and capabilities. This and the lack of centralization can often lead to massive companies relying on a small handful of employees—sometimes even just one—who can perform the necessary analysis and actually execute the organization’s unique capital program management processes.
And with fewer points of failure, that obviously makes you very vulnerable. A single employee’s departure could completely disrupt operations you’ve invested hundreds of millions of dollars in.
That’s not a position modern enterprises should ever have to put themselves in. While some people will always be better at analyzing opportunities and overseeing projects, capital program management software like Tango Projects vastly reduces your dependence on them to keep programs running. The information you need doesn’t just live in their head or on their computer. Their analyses, strategy, processes, and other documentation all live in the platform.
Coordinating between internal teams and external vendors
You don’t want contractors combing through your location strategy or accessing your financial information. But over the course of a project, there are numerous areas where you do want external partners to be able to collaborate with your internal teams in the same systems. If vendors have to use backchannels, intermediaries, and informal systems to communicate and receive project information second-hand, that can bog everything down.
Tango Projects gives you complete control over who can access what. You can enable vendors to view only the relevant information to their project. You can also allow them to submit invoices, get paid, discuss options, and issue change orders through the same system your team already uses.
Inefficient use of finances
There are a few key ways that poor financial practices can interfere with your capital programs—and they largely stem from a lack of visibility and transparency.
The sooner you can free up finances for a new project, the sooner your teams can start the work. But when you’re managing dozens of projects, it’s not always clear when a project is complete—and until it is, you can’t use any of the leftover funds it may have. When every project is siloed, it’s harder to see when one is supposed to be done.
Tango Projects makes it easy to view project timelines using Gantt charts. See when a project is done and ready to be closed, so you can free up resources for the next one.
Projects rarely stay within their direct estimated costs. But when unexpected work arises or things cost more than expected, bureaucracy and process frequently causes unnecessary delays and exasperates construction managers. In addition to estimated costs, construction projects should have contingency funds—a “just in case” budget for change orders and additional work associated with the project. When a project doesn’t need it, the money returns to the pot and can be used for another project.
Despite common misconceptions, project managers are actually incentivized to use these funds sparingly—rolling it over to the next project helps them do more work with the same budget. And it gives them the autonomy and authority they need to keep their projects moving and their teams motivated.
Tango Projects equips construction managers to add notes and comments to budget documentation regarding changes to the current forecast. Managers can note how contingency funds are being used and request more if needed (with an explanation as to why). By making it easy to be transparent through documentation, Tango helps elevate trust and gives senior management the assurance they need that resources are being used wisely.
Project fatigue
People do better work when they’re passionate about a project. Unfortunately, the tedium of information gathering, in-depth analysis, repetitive communications, and unnecessary layers of process can quickly sap the motivation from your construction teams and management personnel. After wasting weeks simply trying to track down information and get your documents in order, you’re not thinking about how to do your best work—you’re just trying to get the project done any way you can.
Project fatigue doesn’t set in because people have done too many projects. It happens when people waste their energy fighting against your systems, processes, and bureacracy. They know there has to be a way to put the information and functionality at their fingertips, but they’re stuck working with the systems you have. So they burn out before the real work even starts.
At Tango, we believe part of what makes tools excellent is their ability to empower humans to be passionate about their work. Tango Projects strips away unnecessary processes and centralizes access to project information so that your team can fully invest themselves in the real work. It creates an upward spiral, where each completed project generates excitement for the next instead of dread.
Streamline capital program management
Tango Projects is a purpose-built capital program management solution for enterprises. Its functionality and capabilities are based on what your business needs to analyze, plan, and execute capital programs. It’s built around your locations and programs, not individual construction projects. Tango provides a single system for overseeing your projects and helps every decision maker see the big picture—so they can easily do their part.
Want to see what Tango Projects can do for you?
Schedule a demo of Tango Projects.