on May 14, 2021 in Capital Planning

Part I: Setting Up a Connected Capital Planning Framework

Whether you are just getting started or planning to update your existing process, a well-organized Connected Capital Planning framework may seem complex and difficult to institutionalize.

Mostly because it usually involves multiple business units or divisions, many people are involved in providing input and data collection is manual and untimely.  Other drivers may be the lack of a system to manage the process, dependency on manual spreadsheets and lack of transparency in the reporting process.  This blog provides a high level framework to get you started to enhance and improve your existing process.

Capital planning is an ongoing process of capturing capital expenditures over a defined period and aligning it to limited available capital.  It also involves ensuring investments are aligned to strategies, mitigating company risk and managing cashflows.  Some companies plan annually, while others plan continuously over multiple years.  Whichever approach you take, you will find this framework applicable.  The framework also allows for a crawl, walk, run approach so you can get started quickly and mature the process over time.  Additionally, the various processes can be implemented separately and at different times depending on the most urgent need.

No surprise, our framework is designed around people, process and tools.  All three are equally important to ensure a successful adoption.


Beginning with people, we recommend centralizing the process either at the corporate level or at the business unit level.

Having one governing body to oversee the process ensures standardization and governance.

It also provides a bird’s eye view needed to catch anomalies and to programmatically make changes.  At the corporate level we often see Corporate Planning or Financial Planning & Analysis (FP&A) functions take on these responsibilities.  In divisions such as technology, we see the COO or business management office manage this process.  Typical roles include executives such as business unit COO’s, finance leaders and analysts, project managers, and business analysts.  Before setting up this process we recommend developing a RACI to identify and assign roles.  We always recommend strong executive sponsorship and consistent communication to all stakeholders.


From a process perspective, we have outlined a best practice process that can apply to the most simple or complex organization.

Below is a framework the outlines the various parts of the connected capital planning process.  We will dive into these closer in Part II through IV of this series.

  • Annual or multi-year capital planning – A process that aligns CapEx investments to budget targets and availability of capital
  • Capital appropriation request – A process that manages the capture of new ideas, analyze the feasibility of the ideas, and workflow of the approval process
  • Performance management – A process that tracks CapEx investments overall spend, including both financial and non-financial benefits

Figure 1: Connected Capital Planning Framework


Finally, from a tools perspective, we recommend a solution that can serve as a single source of truth for the entire CapEx process.

There are many capital planning tools that are point solutions that only manage the high-level process.  These tools depend on spreadsheets to fill the data gaps, run analysis and calculate business impact.  Our view is to take a connected approach.  At Inpensa our solution is designed to manage the entire process without dependency to other systems or spreadsheets.  Our solution allows for direct data input.  This is advantageous because it makes collecting data much faster, allows for standardization and consolidation and analysis is done with a few clicks. No more waiting for emails with spreadsheet templates to come back via email with potential errors.

Data analysis happens in real time as data in captured simultaneously through the company or business unit.  Stage gating, which is common of capital planning processes, is managed by the system, allowing for opening and closing of the system, approval workflows and replanning to occur in an organized systematic way.  Lastly, the system can feed data directly into ERP planning tools or other forecasting/budgeting solutions.  This ultimately results in a frictionless process that is streamlined and produces more accurate results needed to run the business.  Tools like these are necessary to facilitate and manage the overall process and ensure integrity in the data.

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