The Modern Rules of Capital Planning in Public Works and Utilities

Capital planning tends to rely on very manual processes involving complex spreadsheets with data from disconnected sources. This often translates to a slow and cumbersome process.

Optimizing the investment planning process requires clearly defined objectives and making tough trade-offs to determine the benefit of each capital investment project to the strategic objectives.

When making capital investment plans under uncertainty, it is helpful to have a decision framework that combines both quantitative criteria and subjective criteria. A thorough discussion of the various viewpoints of stakeholders is a unique and valuable benefit of the process. The judgment of the team in an organization is just as valuable, and may be more decisive, than the information stored in a static spreadsheet.

By determining the criteria that projects and investments are judged against, organizations can clearly define what “value” means to them and build the highest value portfolio possible.  

Once strategic priorities have been established by stakeholders, each capital asset project should be evaluated against weighted strategic objectives.

In Decision Lens, the “value” of a capital asset project can be described as a quantitative score based on how it enhances or burdens the achievement of the strategic goals. Since capital projects are funded over long periods of time, it is important that capital investments are not only optimized by benefit, but also sequenced to meet the restrictions of budget sources.

Building a defensible and repeatable capital planning process that aligns with strategic goals delivers projects that are not only cost-justified, but also high-impact.  

This white paper provides an overview of best practices for streamlining and optimizing the multi-year investment planning process:

Public Works and Utilities Whitepaper

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