Tips for Using Software Tools To Stop Losing Money in Capital Project Management
How efficient are your company’s capital projects?
According to business experts, about 30% of the costs involved in large capital projects are wasted. And the experts say this isn’t a baffling number, given the complexity and often changing nature of these types of projects (Wales and Sayavedra, “Managing the Complexity of Large, Capital-Intensive Projects”). That’s a lot of money to lose, though.
There’s got to be a better way to manage capital projects. One that helps your company make sure that a 30% loss when working on capital projects would be an exception rather than the rule.
Changing the way money is managed in projects involving capital expenses depends on your company’s strategies. But a large part also comes down to the tools you’re using. You might have the best strategy in the world, but if the tools you’re using to manage capital projects don’t give you total spend visibility and improve insight and control then you’re crippling yourself before you even start.
Process Automation and CapEx Project Management
Business process automation software (BPA) that’s specifically designed for capital expense (CapEx) projects gives your company important tools for taking control of project management. NextProcess’ Capital Project Management Software (CPMS)includes features to speed up, streamline, and ease collaboration for all your capital projects. These features include:
- Automation—like our other software, the CapEx module automates what were traditionally routine paperwork tasks. You can quickly create subprojects by automatically importing data. When projects are ready for review, the system automatically sends them to the right people. Plus, it does all this in alignment with your company’s customized settings for things like project type, region, and more.
- Budgeting Tools—these tools provide accurate, real-time reports on capital project budgets. Like other software features, you can customize this. Configure budgeting levels, set details to track, and customize target deadlines based on your company’s needs.
- Detailed Tracking—the system automatically logs every single change and event that happens for each capital project. At the beginning of a project, the software assigns each project a unique digital ID and it tracks everything that happens throughout the project. This makes both spend tracking and auditing much easier.
- Flexible Platform—the layout of the software system itself is even configurable to your company’s needs. When you implement our software (and if you want to change it later), you’ll work with our team to create a system that’s customized to your company’s exact needs and process. When your company grows, the software scales to your needs with no extra work on your part.
- Security and Access—you get full control over who can log in to the software and what each user sees. Your customization settings control which users can view, edit, and report on different projects. There’s also a setting that lets approvers delegate their authority if they’re away to help keep things moving.
- Total Spend Visibility—all of these automation, tracking, and control features result in a system that provides total spend visibility. You can quickly search for current and completed projects, view details with just a few clicks, and generate reports.
With all these features on a cloud-based software platform, you’ll have a budgeting and planning tool for managing capital projects that designated users can access anywhere. This makes it easy for employees to collaborate even if they work in different locations.
Plan How to Use the Software
We’ve gone over how useful Capital Project Management Software can be, but we all know from experience that great tools are only helpful if you can use them effectively. Simply implementing CPMS isn’t going to magically fix problems with capital projects going over budget. For that, you need a plan. In part, this starts with how you want to use the software.
Even if you haven’t purchased software to manage your capital projects specifically, you might already have ERP software like NetSuite, Sage Intacct, SAP ERP, or Microsoft Dynamics 365 Business Central. These sorts of ERPs can be a big help in managing company finances and streamlining business processes. However, most ERP systems on their own are not equipped to provide the reporting and analysis tools you need for capital project management.
NextProcess’s CPMS easily integrates with your ERP system. Our extensive experience integrating our software with ERPs makes for a seamless experience without bugs and glitches. ERPs aren’t usually easy to customize, so adding flexible software modules gives you a wider range of options. For example, NextProcess’s CPMS lets you control spend and report on your CapEx projects with far more detail than ERPs typically enable.
Of course, you can use CPMS software without integrating it with an ERP. Whether you use it on its own or alongside other software is up to you. The key is to make sure you integrate the software into your capital project management strategy in a way that enables successful collaboration, insight, and budgeting control.
Collaboration: The Key to Success
Large projects, particularly long-term projects involving capital expenses, are prone to change. New information comes to light, but a few people don’t read or don’t receive the email. Someone adds new documents to the project that a few of the collaborators never notice. More than one person updates the budget, and suddenly there are multiple Excel files and no one’s sure which is accurate.
Another thing that can cause problems is when project management rules get in the way. Rules and structures regulating capital project management need to be flexible enough that the team members can respond to changing information quickly. But they also need to be standardized enough to streamline work. That’s a challenging balance to maintain.
Structured collaboration with flexible standards helps teams in your company manage capital projects. It’s so helpful to have one centralized spot to manage all project data, updates, files, and communication. When everyone on the team is using NextProcess’s CapEx project software, all the information related to the project stays up-to-date and in the same place. No missing emails or confusingly redundant files. It all updates in real time on a collaborative software platform.
Like our other software modules, you can customize NextProcess’s software for managing capital projects. You can program company policy into the system, streamlining compliance. You can also customize who has access to which projects and the level of control for individual users.
If you’d like to see how our software can enable more efficient collaboration and detailed budget management for capital projects, contact us to set up a free demo. We’ll also be happy to answer any questions you have about how our software can help your company improve capital project management and save money.