BIEPM.COM

  Budgeting, planning and forecasting processes are alreadyrecognised as some of the most neglected and underservedmanagement procedures when it comes to suitable systemssupport. So it should come as no surprise that the planning andapproval of Capital Expenditure (CAPEX), a more specialisedaspect of budgeting generally receives even less attention.Universally acknowledged by management of all levels as aproblem area, it is dogged by lengthy timescales, cumbersomeapproval procedures and inaccurate data, causing many toquestion the value of a process which absorbs so muchmanagement time.Yet the need to improve these processes is becoming morepressing by the day as management teams seek to shift theemphasis of reporting from a review of historic performance toa more forward looking stance that enables management andshareholders to better understand a company’s future prospectsfor success. Indeed, regulators around the world have urgedmore relevance, transparency and accountability in businessreporting and the preparation of forward looking statementshas been a constant theme of the regulatory and politicalagenda over the last few years. In the United States, publiccompanies have become used to more frequent quarterlyreporting and similar measures are planned in Europe with theintroduction of the EU Transparency Directive in 2007.The quality of management information systems is crucial tothe delivery of timely and accurate forecasts, yet for manyorganisations, the CAPEX process is over reliant on a labyrinth ofdisconnected spreadsheets and manual processes. In recentyears, a number of specialised software solutions haveemerged aimed at providing specialised functionality andworkflow capability in support of budgeting, planning andforecasting processes. These have had a profound affect onimproving the speed of budgeting processes, improvingcollaboration between user communities and enhancing dataquality and reliability.In view of this success and the benefits of broadly basedbudgeting, planning and forecasting functionality, attentionis now turning to the need for more specialised applicationssuch as Capital Expense Planning (CAPEX Planning). Thiswhite paper explores the special challenges and demands ofCAPEX Planning seeking to explain how a newer generationof emerging solutions will also transform the planning andmanagement of large scale capital projects into a moredependable process.