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CapEx: Using Automation to Control Costs and Improve Forecast Accuracy
Capital projects can be a sinkhole for money if they’re not managed well. The problem is, it’s very difficult to manage large-scale projects involving capital expenditures (CapEx) efficiently. Traditional ERPs don’t typically have the tools to support complex capital project management on their own. You need an additional software solution, one that integrates with your ERP and provides robust CapEx management tools.
Experts say that about 30% of the costs involved in large capital projects are typically wasted (Wales and Sayavedra, “Managing the Complexity of Large, Capital-Intensive Projects”). That’s a lot of money to lose, but it’s not unexpected given the complex and often changing nature of CapEx projects.
To fix this, you need collaboration and standardization with a balance of structure and flexibility. Business process automation (BPA) software supports these goals by enabling real-time communication and data sharing, automating and standardizing common workflows, improving cash-flow visibility, and incorporating AI tools to improve forecasting accuracy.
Real-Time Tracking
BPA software for CapEx management helps track project budgets, change orders, and capital allocations in real time. Since capital projects involve working with significant capital investments, often over a prolonged period of time, accurate, real-time budget management tools are essential for success. You’ll be able to see current budgets, changes to the project, and where finances are going in real time.
NextProcess offers configurable layers of budgeting and reporting detail that you can customize to match your organization’s needs. Our Software-as-a-Service (SaaS) platform automatically centralizes CapEx management in a single system. The system updates in real time, so everyone involved in capital project management can access accurate and up-to-date information. This enables cross-departmental collaboration and improved data sharing.
Automated Workflows
With the rise of hyper-automation, traditional BPA software is working hand-in-hand with artificial intelligence (AI) tools, such as machine learning, and other business management software to automate entire end-to-end processes. BPA and AI technology of this sort isn’t meant to replace employees. Rather, it’s designed to make their jobs easier and provide more time for them to focus on the most interesting and value-added parts of their jobs. This shift in employees’ tasks will likely necessitate training and upskilling to prepare them for working with increasingly automated processes.
CapEx management benefits from these technology advancements with improved automation to take over and streamline routine workflows. For example, automated workflows can enforce approval chains for project funding and scope adjustments. This helps standardize procedures and automates that standardization so it’s much easier to ensure compliance.
In addition, BPA software, including NextProcess’s software modules, often incorporates machine learning technology. The longer you use our software, the more the software “learns” about your company’s preferences for managing capital projects. The automated workflows and other features become increasingly optimized as you continue using the software.
Cash Flow Visibility
With BPA software for capital project management, CFOs gain clearer visibility into cash flow impact and ROI across active and planned projects. You’ll get accurate, real-time reporting on capital budgets. With NextProcess software, you can view large projects, individual orders, or invoice details with just a few clicks. The more reliable and easily accessible cash-flow information is, the more control you’ll have over capital project management costs.
In addition, when you implement multiple NextProcess modules, the systems work together to provide end-to-end financial automation. Our software also integrates seamlessly with your existing ERP, providing a holistic view of company finances. When you expand your automation beyond the capital project module, you won’t just be limited to information about CapEx costs. You’ll also be able to factor in other financial information much more easily than in siloed systems.
AI-Assisted Forecasting
The benefits of BPA automation for CapEx management go beyond real-time project tracking, automated workflows, and cash-flow visibility. The same software processes that track data in real time also log that information. Accessible, accurate data is essential for long-term success.
As projects continue, you’ll be able to easily access information on how the project is progressing. Detailed reports can also act as an early warning system so you can notice if something changes before it becomes a big problem. The software also creates detailed audit trails.
This data is vital for forecasting how similar projects might go in the future. And analyzing data patterns is an area where machine learning excels. This type of AI can analyze and even interpret data, improving the quality of information available for decision-makers in your company. Possible machine learning applications in capital project management include faster identification of viable projects, reduced human bias in decision-making, and more accurate projections for estimated project timelines, budgets, etc.
NextProcess for CapEx Management
Implementing BPA automation helps control costs and improve forecasting related to capital projects. Real-time tracking ensures oversight and detailed control. Automated workflows help standardize processes and free up employees to focus on value-added tasks. With improved visibility, there’s more control over cash flows and simplified audits. And with modern BPA tools incorporating machine learning, you can improve forecasting through the power of AI.
Traditional ERP systems don’t have the functionality to manage complex CapEx projects efficiently, but NextProcess’s software modules fill the functionality gaps and deliver more efficient and focused capital project management. Our Capital Project Management Software seamlessly integrates with your existing ERP. Our software is highly configurable to meet your company’s needs. Our team will work with you to create a software solution that is tailored to your processes, grows with your company, and scales to your needs.
If you’d like to upgrade your company’s capital project management on a reliable, secure, and customizable software platform, contact NextProcess today. We’ll be happy to answer your questions and to set up a free software demo so you can see our software in action and learn about configuration options to support your company’s unique needs.
