The key components of agile Capex management
Somewhere in between sluggishness and runaway growth, there exists a goldilocks zone where the most successful companies optimize their business model and stand out from the rest. For these companies, speed is not the name of the game – rather, it’s agility. The companies that have developed an agile business model set themselves apart by clarifying roles and responsibilities, embracing innovation and sharing knowledge across the enterprise.
When it comes to agile Capex management, these practices also hold true.
Effective capital investment requires a great deal of collaboration and cross-organization communication, with stakeholders from finance and accounting, to procurement, operations, engineering and IT all involved in ensuring a capital project performs as expected. For investments to move fluidly from ideation to execution and review, clearly defined responsibilities across each of these groups must be established and adhered to from the start.
A common breakdown in this process occurs during the investment approval stage, particularly if there is no centralized solution for managing projects and or a way to easily observe project status. In an agile environment, however, such limitations have been addressed and solved for through innovation – either of a technological or structural nature (or both).
With the right players in place and the right tool at hand, your organization is then positioned to share important project information between parties and improve process visibility. Most importantly, however, by opening up new channels of communication, you’re enabling agile Capex management to take shape by allowing best practices to flow more readily between organizations. When a project performs, there’s now a clear audit trail, and cause and effect can be linked. This information can then be readily dispersed as needed to ensure success continues across similar investments.