EMG Blog

Score Big with Your Capital Plan

Posted by Kristin Rueber on 6/6/17 10:18 AM

Buildings need continual repair and maintenance. But you can’t play favorites. How do you determine which building(s) in your portfolio receive the time, attention, and dollars that they deserve (and need)?

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Let’s say you have a $5-million-dollar budget to spread across 10 buildings. Do you allocate $500,000 to each building? No. It’s time to move away from budget-based capital planning.

It’s time to move toward a more strategic Capital Planning process.

Capital Plan Scoring Tip Sheet

About Project and Data-based Allocation

In today’s business landscape, it no longer makes sense to distribute funds equally across your facilities. Creating a Capital Plan scoring system is a strategic financial decision that will carry into the future as part of a Master Plan.

EMG_Object_Icon_DATA MGMT (75x75).pngToday’s technology can make it easy and efficient to categorize your projects and gather data to present to stakeholders. Using an intuitive, facility asset management tool to help you score, track, and manage your assets, repair, and maintenance costs. This will allow you to allocate dollars effectively across your capital projects, adjust budgets on the fly as new issues arise, and communicate effectively to stakeholders and Facility Managers across your portfolio. The data allows you to demonstrate the details (best and worst of your buildings) with comprehensive reports.

Categorizing Projects to Move them to the Top of Your list

EMG_Object_Icon_PROJ PRIORITIZE (75x75).pngWe’ve come up with a list of 5 project categories (in order of how we would prioritize them) to help guide your prioritization of projects. While the needs of your facilities may differ, through our experience in Asset Management, Facility Condition Assessments, and Capital Planning, we’ve found these project categories provide the most impact per budget dollar.

  1. Life Safety Project
    • Life safety projects are typically considered top priority in a public setting.
  2. Code Compliance Project
    • Americans with Disabilities Act (ADA) falls under this category. A proactive vs. reactive approach to ADA compliance and barrier removal should be priority #1 for your capital projects.
    • DOJ requires, under Title III, than an ADA Transition Plan be in place.
  3. Return on Investment (ROI) Project
    • Prioritize projects that result in paybacks, energy savings, maintenance savings, and revenue generation (that’s something every Facility Manager / Director and stakeholder wants to hear).
  4. Standards of Service Project
    • As your buildings age, the demographics of your users change as well. Is the overall mission the same? It makes sense to allocate dollars to projects that keep current with technology and the demands of your target audience.
    • Does the building service the population? For example, in K-12 schools – does the current facility meet current and forward thinking educational specifications?
    • This category feeds into your overall Master Plan, and should not be ignored during the scoring of your Capital Projects and Capital Planning process.
  5. Opportunity Cost Project
    • Now vs. Deferred Cost, (aka Want vs. Need), and more widely known as Unrestrained Costs vs. Restrained Costs.
      • Capital projects that can demonstrate a cost differential performed in the near term, vs. deferred, fit into this category. For example, school districts must have a Capital Plan on file in order to receive funding. Can you effectively present a plan to stakeholders that shows cost differentials?

Score Big with Capital Planning

You have your categories, now it’s time to score them. These are used widely across a variety of industries when formulating a Capital Plan and overall Master Plan. Here’s a high level overview to score each project. For more in-depth scoring parameters, download our Tip Sheet.

  • Project is inconsistent with the Stakeholder’s Plan, etc.
  • Project is consistent with Stakeholder’s Plan but does little to advance strategic goals
  • Project is directly consistent with Stakeholder’s Plan

Winning with Data

Put time, attention, and dollars where they’re needed. Download our Capital Plan Scoring Tip Sheet for in-depth details on the 5 categories, and a scoring matrix that lays out the leverage needed to present a capital plan to win them all.

 Capital Plan Scoring Tip Sheet

 

Topics: Capital Planning, planned capital programs, capital projects, facility condition assessments, facilities master plan

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