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EXECUTIVE SUMMARY

This paper describes an approach to successfully aligning an organization’s facilities capital budget with its strategic business objectives. This process enables objective prioritization of competing needs in order to optimally allocate capital funds and deliver the greatest business value.

INTRODUCTION

Capital spending on facilities represents a significant investment for most organizations. How well these capital dollars are aligned with strategic business goals can dramatically influence an organization’s ability to deliver on its mission. Yet, the process of evaluating capital needs is usually subjective and political in nature, and it’s often difficult to effectively link spending to specific goals.

With a structured and consistent approach to prioritizing capital needs, using consensus-based criteria that support defined strategic objectives, facilities managers can effectively align capital spend with organizational goals. Defensible capital budgets for the next two, five, ten or even twenty years can then be developed, enabling intelligent decision-making and planning about facilities that will fully support the organization’s plans, aims and mission. This paper describes an approach to creating mission-driven capital budgets.

Today, facilities teams are successfully employing this process to recommend strategic capital investments that allocate funds based on mission and objectives. Additional benefits of a mission-driven capital budget include:

  • Greater understanding and support among the various stakeholders in the capital budgeting process, from executives to financial planners
  • Reduced time and effort to generate capital budgets and make adjustments when changes inevitably occur
  • Defensible budget requests to funding bodies, legislatures and boards of directors, based on well-defined, quantifiable criteria.

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Tags: facility capital planning, facilities preventitive maintenance, facility maintenance management, facility condition assessment