How to integrate your capital planning and project management

Capital is king when it comes to construction. That said, builders shouldn’t expect a blank check when an emergency arises or scramble to find an ATM on the jobsite for an unforeseen cost overrun.

“Build it and they will pay” is no way to fund a construction project. Sound fiscal decisions throughout the project lifecycle protect all involved—owners, delivery teams, and in the case of government-funded projects, taxpayers.

Yet despite a wealth of analytics and construction project management solutions available today, project bids too often remain based on best-case scenarios. There is something to be said for a contractor’s experience and intuition, but when millions and even billions of dollars are on the line and strict project deadlines are in place, there is no better resource than complete, current, and accurate data.

Sync up capital planning and project execution to build budget accuracy and cash flow predictability across your construction project portfolio.

Factoring in the variables

No doubt a multitude of factors affect every construction project. Weather or a natural disaster can shut down a jobsite for days and even weeks.

An estimated 1.2 million construction workers were predicted to leave their jobs in 2022, prolonging the acute lack of skilled labor available across all trades that hampers productivity and slows a project’s completion. Inflation and interest rates spiked last year, driving up the cost of materials and money. Reliable delivery of crucial supplies remains a constant frustration with continued supply chain disruptions.

Indeed, while capital is king, information is power. With the amount of data available today through easy-to-use solutions, there is no reason to disrupt a project because of poor planning or delayed response to unknowns. The result is costly delays that unnecessarily inflate the budget.

Read a new ebook to sync up cash flow between capital planning and project execution

In a new ebook now available on demand titled, “Optimize Capital Portfolios by Synchronizing Cash Flow Between Capital Planning and Project Execution,” you’ll learn about the benefits of syncing up cash flow data across the projects in your portfolio to provide planners with pinpoint accuracy to create and adjust budgets so they can pivot with confidence during challenging and unexpected events.

The ebook spells out how crucial it is for the planning team to know about project schedule changes immediately so they can assess the potential cost impact from fluctuating interest rates and not unknowingly overcommit funds to other projects.

It’s important for project planners to make informed, timely decisions when outside factors—be it changing interest rates or workforce disruptions—can influence spending on a project.

Build transparency with an integrated plan

Having integrated capital planning and project execution gives project planners the transparency they need to make those decisions immediately and confidently so projects can be prioritized to maximize budget spend. Synchronizing planning and project controls teams helps to create one connected operation from start to finish.

One goal of every construction project is to efficiently plan, build, and operate. But even the best laid plans can go awry. Without integrated planning and project execution, there could be a significant time lag between when the original conversation about a potential delay or cost increase took place and when the planning team finds out about the potential impact to the project. During that interval, planners could inadvertently overcommit funds.

There’s no question that a lot of pride, sweat, and soul is poured into a construction project. And rightly so. Emotions often play a role in decision-making as the project develops.

Yet it's essential to establish an objective, impartial system to manage funding allocation and keep projects on track.

Break down the silos with one connected plan

It’s no secret that capital planning and project execution traditionally exist in silos resulting in delayed access to cash flow actuals and forecasts and cast a negative impact on future planning and budgeting.

Remain confident in your budgets and costs as you rationally look at the factors influencing your project decisions. By synchronizing planning and project controls, teams create one connected operation from start to finish.

Check out the ebook to learn how the Oracle Smart Construction Platform can bring together your capital planning and project controls today.