This PPT slide, part of the 126-slide Capital Optimization Guide PowerPoint presentation, outlines various challenges that impede capital excellence across 3 distinct levels: project, portfolio, and organization.
At the project level, 3 key issues are highlighted. First, "Unclear justification" indicates that projects may lack a solid rationale, which can lead to misallocation of resources. Second, "Lack of front end loading" suggests that insufficient planning and analysis at the initial stages can hinder project success. Lastly, "Insufficient optimisation of individual projects" points to the failure to maximize the potential benefits of each project, which can result in wasted investments.
Moving to the portfolio level, 2 significant challenges are identified. "Missing portfolio optimisation" reveals that without a strategic approach to prioritizing projects, organizations may struggle to align their resources effectively across various business units. The second point, "Fragmented spend visibility at portfolio level," indicates a lack of comprehensive insight into expenditures, making it difficult to assess overall financial health and project performance.
At the organizational level, 3 additional barriers are presented. The first, "Complex SIB execution structure," suggests that the existing structure may not be conducive to effective decision-making, particularly in a matrix organization. The second challenge, "Indifference and lack of an ‘ownership mindset’ when spending capital," highlights a cultural issue where stakeholders may not feel accountable for financial decisions. Finally, "Current incentives drive sub-optimal capex-opex trade-off behaviour" indicates that existing incentive structures may encourage poor financial choices, further complicating capital management.
This analysis underscores the multifaceted nature of challenges in achieving capital excellence, offering insights for organizations seeking to enhance their financial strategies.
This slide is part of the Capital Optimization Guide PowerPoint presentation.
This framework was developed by a team of consultants for a large blue chip company and can be replicated across industries.
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