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Optimizing Capital Improvement Programs In Uncertain Times

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W H I T E P A P E R 800.580.9322 • 1 Hurdle Optimizing Capital Improvement Programs in Uncertain Times Is your capital improvement program built to survive changing times? Capital improvement programs are often fraught with overcomplexity and organizational limitations that can lead to poor execution. Unexpected or unanticipated events can turn seemingly strong multi-year efforts into a headache of delays and cost overruns. Capital improvement programs are a proven and powerful approach to identifying and prioritizing capital projects, particularly related to infrastructure and associated financing mechanisms while bringing public and private groups together. The economy is in an unprecedented period of economic expansion and prosperity and all seems good… until it isn't. As noted in the recent 2020 FMI Overview Featuring the 2019 U.S. and Canada Fourth Quarter Construction Outlooks report, there is uncertainty ahead and indications of decelerating growth. As well, labor shortages and cost/funding limits persist. The following outlines three ways to counter uncertainty…with a little help from technology. Bigger is not always better During the process, capital programs typically face one of two challenges: 1) more project demand than the funding can adequately support or (2) a dramatic increase in the budget as a result of economic growth or aging infrastructure. Limited funding requires an organization to make cuts in operations or project scope to stay within the boundary of a given budget. Compounding the issue, a runaway project that has either increased in scope or suffered from cost and schedule variance applies further pressure to a budget, pushing necessary projects further and further away from getting off the ground. Similarly, a doubling or tripling of a CIP budget can result in distracted priorities, project delays and schedule inconsistencies.

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