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Nine practices for better capital-investment management

McKinsey&Company’s latest article on capital-investment management, see, shows how Executives can improve performance by mastering several practices and adopting a capital-portfolio-management system powered by a comprehensive digital application. The nine practices they recommend are:

  1. Make the capital portfolio a priority by using a clear capital-allocation strategy to build winning portfolios, and linking strategic imperatives to a target capital portfolio
  2. Tap the organization’s collective wisdom by sourcing project ideas from experts across the business
  3. Set clear investment objectives and compare even seemingly disparate projects by combining qualitative and quantitive assessments
  4. Scrub the business case for each project multiple times throughout the life cycle of the project
  5. Use ROI throughout the investment life cycle including postcompletion reviews
  6. Streamline approvals and make contextually informed decisions in which approvers need to answer three key questions
  7. Forecast more frequently to enable tactical shifts utilizing digital tools to enable more frequent reporting and forecasting
  8. Implement a unified cross-platform approach by adopting a capital-portfolio-management system that is unified across the investment life cycle, from project inception to postcompletion review
  9. Adopt a culture of continuous improvement organizations need to identify past errors and correct course.

The authors of this excellent article - Matt Banholzer, Ashish Chandarana, and David Straden - finish with, “In our experience, most organizations can institute a far more efficient and effective project-management process in four to six months and see project and portfolio NPV improvements of well over 10 percent within a year.”

CTMfile take: Well worth a read.

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Investing Short-Medium Term Surpluses

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