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 organizational change. This means when new initiatives arise - and new initiatives are popping up more frequently than ever before - the organization 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.
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 a renewal of a lease, a sustainability investment, or a large real estate development project. This second category
requires capital project management to help the real estate and facility management teams to stay in control.
This blog takes a look into capital project management and its four phases. The blog also discusses the importance of having an integrated software solution in place that can support you throughout the entire process of capital project management.
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 typically have high costs compared to other investments, a structured approach is needed to control finances, planning, risks and the deployment of people.
Capital Project Management
This white paper explores the topic of capital project management and takes a deep dive into the many aspects and phases that project teams must manage in order to stay in control, such as funding, budget management, financial commitments, cashflow, and forecasting.Read more
This structured approach is defined in four phases that are part of the complete CPM process:
- Scenario planning: this includes the management or steering group that analyzes different scenarios and outcomes to define the best way to approach a project. During this phase, a large number of possibilities may be considered and compared with each other. There are often more ideas than available funds, which makes it essential to establish one central overview of all ongoing projects, their financial impact, and the expected contribution to the organization’s objectives.
- Project planning: the selected projects are further defined during this stage. It 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 an 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 finalizing 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 scaled 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 organizations 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 remodeling or enhancement of existing facilities.
The capital project management functionality in an IWMS can take advantage of the 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 the strategic elements to the operational details. An IWMS solution provides the management board, steering group, project leaders, and the internal and external project team members with a well-integrated tool that enables them to collaborate and maintain control of the planning and execution of capital projects that benefit the organization.
Ready to get control of your capital projects?
Are you currently looking for a solution that will help you manage your entire project portfolio? Download the white paper “Capital Project Management” to learn more about this topic.