A case study
“The transparency across our portfolio, from multiple perspectives, has given us the ability to deliver consistently on our strategic goals.”
– IT Manager
As a global mining and industrial group, operating in over 30 countries with multiple brands, project portfolio management is fundamental to business success.
And with revenue in excess of US$20 billion and an industry leader in sustainability, capital expenditure projects are part of their growth strategy. They had some unique challenges though, managing their CapEx through multiple spreadsheets.
Some of their issues were:
- Quickly surfacing insights and collating portfolio data.
- No trust in the data so everyone was always double-checking numbers.
- Lack of visibility on project prioritisation
- Potential missed risk triggers from no auditability or accountability for decisions.
The lack of visibility across the portfolio meant limited opportunity to meet organisational strategic objectives. Disjointed systems across industrial brands left them open to portfolio underspend when projects were deprioritised and resources weren’t reallocated. They knew they needed to vertically integrate their portfolio management processes, but how?
They had multiple project delivery systems in place - some already successfully supported specific business processes – but they lacked strategic alignment. Business practices included a combination of Excel, Microsoft Project and SharePoint to manage complex workflows and project approvals.
Across the organisation, commercial management representatives, engineering managers and the IT department wanted to streamline their capital portfolio management into one system, while also facilitating the different brand processes.
Achieving growth with capital portfolio management
Although visibility was the initial problem they were seeking to solve, it quickly became appealing to use a best-in-breed solution to prioritise projects and optimise their use of capital expenditure, allowing them to maximise efforts at a global level.
This position was the catalyst for change. A solution that could support their specific portfolio management framework, meant that risk assessments, top-down guidance and prioritisation assessments became the norm.
Insights available in real time meant they could take a dynamic approach to portfolio management. They also recognised that the flipside of this change was the potentially dire consequence of inaction and stagnant business growth.
The decision to partner with CAPEXinsights as a solution was both logical and strategic, given their knowledge in capital project design and delivery.
Consulting with them to establish a united capital portfolio management approach to underpin their strategic planning and decision-making, and ultimately drive more consistent and better commercial outcomes across each business unit.
The right portfolio composition through prioritisation
“The insights allow us to make informed decisions quickly. As our single source of truth, we can produce quality capex business cases” – Engineering Manager
What began as a solution to simplify their annual portfolio build process, led to effective prioritisation and insights for fast decision-making and strategic planning. Now they could choose the right projects, factoring in risk and strategy, and ensure commercial objectives were delivered, even in a dynamically changing environment.
At a more granular level, the Portfolio Build process allowed the mining giant to funnel capital expenditure where it should be strategically invested across multiple, interconnected businesses.
Rather than an individual brand overview, the business could get an overview of the capital project portfolio at a global enterprise level. This big-picture visibility supports the big-picture goal of them being carbon neutral by 2030.
When building the portfolios, the experience was that 47% of the original portfolio changed from what was initially envisioned.
That’s a significant change from what was proposed initially in the portfolio, signaling that constant portfolio monitoring is not just beneficial but fundamental to successful capital portfolio management.
None of these micro amendments and prioritisation activities would have been able to be carried out using a spreadsheet.
The path towards a better future
A dynamic capital portfolio management tool benefits multiple stakeholders. Before implementation, project engineers and finance managers were disconnected and had to duplicate information across multiple systems; a time-wasting exercise.
Throw in complex forced work-arounds, and it’s no wonder business leaders couldn’t get a ‘joined-up picture’ of the whole situation.
Now with CAPEXinsights, they are armed with insights, but also empowered to utilise that intelligence to make critical, strategic decisions, like project prioritisation, adding new projects throughout the year, taking out de-prioritised projects and managing carry-over projects to smooth cashflow – all while managing risk across the entire capital portfolio.
For more information on how CAPEXinsights can transform your capital portfolio management, just like this customer, please don’t hesitate to reach out to us.