The right spend at the right time:
Growth-oriented Capital Planning
Capital investment, when allocated to the right place at the right time, enables strong, viable business strategy and growth. Most companies believe they are delivering profitability and productivity through their capital budgets. Yet the average company misses its plan by at least 12 percent. Even sophisticated companies come up against this ‘capital monster.’
The capital monster can unintentionally inhibit growth unless companies:
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Develop an accurate, strategic capital budget
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Prioritize spending effectively
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Manage their spend with centralized oversight
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Execute spending consistently and holistically
Overspending obviously causes financial strain throughout your organization, raises risk and damages shareholder trust. But have you considered the risk of underspending? It may signal a worse problem lurking beneath the surface.
When money is held back rather than invested in opportunities like improvements, the impact on your future ROI, rents, and potential foreign investments should not be underestimated. The value of your portfolio is at stake.
US $8.8 billion
JLL research shows Forbes 1000 companies underspend by this much annually
> 30%
In some cases, informed prioritization—in which managers compare and rank projects—across categories can increase portfolio net present value
10 to 30%
Reductions in spending for non-major projects can enable reallocations for increased benefit.
Optimize your growth and meet your goals
If you’re consistently coming in under budget of your capital plan, learn what you’re missing out on.