As part of our series on Embracing the New Normal, we’ve been exploring how asset-intensive industries are changing their operating practices. In this article, we look at the importance of preparing applications for budgets and capital expenditure, and how it’s possible to go about them in a different way.
Managing budgets – especially capital expenditure – is a critical capability in asset-intensive industries. For managers and superintendents in particular, accessing the money you need to maintain your assets – and then effectively spending it – is almost always at the forefront of your minds.
The application for expenditure is the key input into a site’s budgeting and financial control processes. Whether it’s for the purchase of a new asset, the overhaul or replacement of an older asset, or a small capital or organizational project that requires the allocation of funding, it all begins with a sound business case.
In Bluefield’s experience, the application for expenditure is often a major source of problems, either immediately because it’s not detailed or complete enough to justify the expenditure, or later on because it leaves the project team short of funds. We’ve identified several key pain points:
Not understanding what the audience is expecting to see in the application;
Not being able to develop a sound financial case that’s supported by accurate, real-world information.
A lack of knowledge or training in how to write applications;
A lack of suitable templates to build the business case; and
Making them too lean by, for example, leaving out a contingency amount.
At Bluefield, many of our team have been involved in writing applications for expenditure for years. We’ve learned that writing applications for expenditure is a specialized skill, and one that can add enormous value to a client if done well, but it’s not necessarily a skill that’s needed 100% of the time. It obviously peaks before budgets are due!
Writing applications for expenditure has traditionally been thought of as an on-site activity. However, Bluefield is set up to enable remote working, which allows us to work from anywhere, collaborating both with our clients and with other members of our team using our internal technology capabilities. This means that we can bring in specific expertise whenever necessary to enhance the business case. Over time, we’ve also learned how to enhance business cases using our internal benchmarking information,as well asother toolkits such as our workshop capacity calculator.
To learn more about our approach to preparing budgets and capital expenditure applications in these changing conditions, and to contact us, click here.