Fundamental Financial Management for Capital Construction Projects

Expert Insights - Keith O’Leary

A large portion of any organization’s budget is dedicated to capital construction projects. These projects often present challenges ranging from planning and prioritization, to allocating and reallocating funding, to managing costs and keeping the project on schedule. Many organizations have processes in place that attempt to manage these and other challenges, but they are often manual in nature and rely on disparate, legacy software solutions. Few organizations have highly effective processes leveraging technology that not only mitigates risk but also provides a comfort level for how capital construction projects are approved, funding is allocated, and capital is managed and tracked throughout the project.

In order to effectively track capital projects, many organizations tend to keep separate project budgets and attempt to consolidate the data into an aggregated spreadsheet to determine the total capital spend. It’s a process that is all too manually intensive, lacks real-time visibility, and is fraught with inherent risk. Project managers and finance managers must spend time gathering and entering data to support a disparate, time-consuming and inconsistent process of handling multiple spreadsheets. The dysfunction of such a process results in a lack of control and accountability required to optimize your construction capital, not to mention a potential misuse of highly skilled and compensated resources.

At the core of an effective solution is structured capital and project information that is accessible, up-to-date and highly accurate. With these attributes in place, decision makers have the information needed to ensure that data is analyzed and key decisions are made to maximize financial control of construction projects.

What’s the Solution?
The VFA.spendManager capital planning and spend management solution unites the requisite level of capital management and financial construction project management into a combined solution that provides an end-to-end project view. Both the financial manager’s capital concerns and the project manager’s project concerns are met and managed within the solution.

The VFA.spendManager solution delivers:

Capital Planning – Enabling organizations to centrally gather capital projects and provides views of the data for evaluation, scoring and prioritization against competing projects. It provides automated workflows, with task and email notifications, for review, input and ultimately the approval of planned capital projects.

Budgeting/Funding – Providing a financial hierarchy that gives organizations the flexibility and extensibility needed to manage multiple projects over multiple years. Funding sources can be established and budget allocations managed to support capital construction project needs. With this structure in place, institutions are able to establish budgets based on an unlimited number of capital projects and to manage how capital is allocated, managed and spent.

Capital Construction and Financial Project Management – Delivering tools to manage projects as they apply to capital, construction activities and the impact of those activities on capital. It unites the construction activity data with capital activity data to provide the most useful views for key decision makers in the process, from executives to financial managers and project managers.

With the VFA.spendManager centralized and automated solution in use, organizations have real-time financial and capital construction project management data visible and accessible to all interested parties including project managers, finance staff, and budget owners.

For more information on capital construction management, download the white paper “Capital Construction: Strategic Alliance of Project and Capital Spend Management”. You can also contact VFA at 800-693-3132 or at info@vfa.com.