You’ve thought through every detail and have full confidence that the solution you’re proposing is right for the business challenge or need at hand. But it doesn’t get approved for funding.
The answer can be complex. But it starts with the recognition that engineering projects and financial decisions are inexorably tied together. So while you may have made the right engineering choices, you just may have missed the mark on defending your business case.
Or, the real problem may very well be that your company has a flawed process in how it evaluates Capex projects to begin with.
That’s why making the case for an integrated capital investment management solution, including Capex approval, may be the best project you take on next
Recognizing that you are “competing” against other projects for funding, you have an obligation to make a clear and compelling case for what you are proposing. After all, capital is finite and there may be more project proposals than cash to pay for them.
This doesn’t mean you need a doctorate in business to present your solution effectively. Or that the processes in place, which do not promote “apples-to-apples” consideration, can’t be improved. So, let’s look at each of these.
Making the case
It’s a fact of life: good ideas get quashed and mediocre ones get approved. Among the reasons: manual processes don’t facilitate consistent and clear communication of the business case, and it makes it difficult to compare one proposal to another.
Moreover, if you’re submitting 10, 50 or 100 proposals every year, you know that each one of them takes time. A lot of it. Even if you want to be thorough, provide ample explanation, and do all the requisite math, it can be challenging just to keep up.
Start working within an automated, end-to-end Capex management solution like Finario, however, and all that changes:
- Creates a level playing field by standardizing the details (with templates) that are required before submitting a project proposal for approval.
- Makes it easy to pull in data and narratives from comparable projects, which also lends added credibility to key assumptions.
- Allows you to attach documents that help to substantiate your recommendation, and “travel” with the project proposal as it is viewed by others.
A repeatable framework also includes financial models. Make sure you put the same effort and thoroughness into the financials as you did the technical and business aspects of the project. This does *not* mean creating an overly optimistic scenario, just be honest. If you have questions, reach out to your local finance team or the corporate owners of the Capex process. Clear, easy to follow financials go a long way to selling a project.
By eliminating many of the barriers to a thoughtful proposal, you can focus on the business need you are going to satisfy, how your project addresses this need, and how the project will be delivered. You can then spend your time focused on what matters next, which is getting your project approved.
Capex approval for engineers
Left to manual processes and antiquated systems, getting a project approved can feel like playing a game of “telephone tag.” As each approver reviews the details, the story can seem to have changed.
Automation changes all that. Leadership creates business rules that dictate how projects must be approved based on project type, dollar amount, ROI projections or a combination of factors. Which means, you don’t have to worry about who to include in reviews and approvals. Also, it’s always easy to see where in the approval process your project stands and who will review it next. If a reviewer asks for more information, once you have added it to the project record in Finario, it’s available to all of the other reviewers, so no more “answering the same question twice, or three times….!”
What you do want to make sure of is that your proposal is clear, concise, and compelling. If the project requires an extremely technical discussion, be sure to have a “plain language” summary. Typically, you’ll also need to highlight cost savings, margin improvements, and strategic value to the business.
Selling it in
By now, you may be asking yourself, “Why don’t we have a capital planning solution like this at our company?”
As with many things, the answer to that is most often simply a matter of awareness and priorities. Your finance team may not be aware that there is a cloud-based solution purpose-built for Capex that will help engineers plan better and can easily be implemented enterprise-wide. It not-only handles Capex approval but also addresses all of their planning, budgeting & forecasting needs on a single platform. You can also help them understand how much value you can create with better information and project decisions and that the return on investing in a better Capex solution may be much higher than other systems projects they may be considering.
The path to implementation, as with your own project proposals, is to create a compelling case for consideration and gain the buy-in of senior leadership in finance, IT and even procurement. Get it done and you’ll be rewarded many times over!