The ultimate goal of any corporate real estate or facility management department is to support the core business. In order to do this, they must maintain a proactive approach to organisational change. This means when new initiatives arise the organisation must be prepared to act quickly and cohesively to plan and implement new projects. In practice, this means more projects for the real estate and facilities teams to manage.
White Paper - Capital Project Management
In many businesses the number of property and facilities projects are increasing, from operational projects such as structural adjustment or relocation, to large investments such as lease renewal or property development.
Projects can be small operational projects, such as a relocation, an event, or a minor structural adjustment. But, they can also represent very large investments, such as the renewal of a lease, a sustainability investment, or large real estate development project. This latter category requires capital project management to help the real estate and facility management teams to stay in control.
This blog explains capital project management and the four phases it comprises. After that, I will discuss the importance of having an integrated software solution in place that can support you throughout the entire process.
What is Capital Project Management (CPM)?
CPM deals with operational projects that require a high level of investment in order to improve capital assets. Since these projects have relatively high costs compared to other investments, a structured approach is needed to control finances, planning, risks and the deployment of people.
This structured approach is defined by four phases that are part of the complete CPM process:
- Scenario planning: this includes the management or steering group that analyses different scenarios and outcomes to define the best way to approach a project. During this phase, a large number of options may be considered and compared with each other. There are often more ideas than available funds, which makes it essential to have one central overview of all ongoing projects, their financial impact, and the expected contribution to the organisation’s objectives.
- Project planning: the selected projects are further defined during this stage, which involves detailed planning, risk assessment, and a defined budget linked to the available funds. A project team and a project leader are defined by the management board. Many people are involved and need access to the same information, which makes a central source of data essential for sharing information.
- Project execution: this is normally the most intensive and visible phase of a capital project. Depending on the scope of the project, many active members will report on risks and issues, exchange documents, and handle a constantly changing stream of financial obligations, work assignments, and requests for changes. There is a clear need for a single source of information so that the project team remains in control and can report to the management board in the appropriate way.
- Project closeout: this is the final phase of a project in which the results of the project, including all documentation, are transferred to management. The project is closed financially by finalising budgets and updating the balance sheet. Most importantly, this phase is used to identify the lessons learned for subsequent projects.
These four aspects need to be managed in such a way that large-scale projects remain within budget, are delivered on time, and in-line with the business case. This sounds like an ideal situation, but is it realistic? It should be your goal to aim for the optimum. So how can we support you in achieving this goal?
IWMS as integrated project management solution?
Many organisations use an Integrated Workplace Management System (IWMS) solution to support facilities services, space planning, maintenance management, and sustainability efforts. By definition, an IWMS also offers capital project management functionality for activities associated with the design and development of new facilities and the remodelling or enhancement of existing facilities.
The capital project management functionality in an IWMS can benefit from information already in the system relating to buildings, installations, contracts, and work assignments. In addition, existing processes can be used to generate budgets, make liabilities payable, and conclude contracts. An IWMS also provides insight into the entire project portfolio at various stages, the funds that are available for projects, and the project planning - from strategic elements to operational details. An IWMS solution provides the management board, steering group, project leaders, and the internal and external project team members with an integrated tool that enables them to collaborate and maintain control of the planning and execution of capital projects that benefit the organisation.
Ready to get control of your capital projects?
Are you currently looking for a solution to manage your entire project portfolio and which supports you with the planning and execution of all your capital projects? Download the white paper “Capital Project Management” to learn more about this topic.