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May 17, 2010
Real Estate Software expert and Lucernex President, Joe Valeri (see Joe’s management summary here), discusses capital program and project management and its place in a Retail IWMS and Store Lifecycle Management solution (SLM).
What is Capital Program Management?
I have seen this particular set of functionality called capital program management and capital project management. While they are used interchangeably there is a subtle difference.
In general, capital program management is a set of features that provides companies with many locations a way to create and manage a capitally budgeted program across a number of like locations. Each location ends up with a capital project that ties back to the capital program.
Example 1: a hotel chain wants to renovate the lobbies of a set of hotels that are predominantly occupied by business travelers to add workstations and a self serve snack bar. It selects 56 hotels to renovate and gets capital budgeting for the program. This program is unlike a new hotel project or a single facility project in that it gets its budget from corporate and is typically managed as a program by a unique group of staff. The group managing the program will want to see a rollup of the schedule and budget for all capital projects and may also want to drill down into any one project to see more detail. They also want to maintain the history of the work done at any one location, on the location record for future review.
Example 2: a restaurant chain wants to pave all the parking lots for its 400 locations located on pad lots in the northeast due to degradation after a bad winter. They get capital budget approved for the paving work and assign it to 4 different service vendors that do asphalt repair. They will want to see a rollup of all budgets and projects in the program by state and by service vendor and may want to drill down into any one capital project to get more details. They also want to update each restaurants location record with the date of last paving and maintain a link to the paving project for each restaurant.
This type of functionality has always been important but has grown in significance over the past few years as companies have slowed or stopped new store growth and have focused on cost savings through renovations, remodels and dispositions – all of which can be managed more effectively as a Capital Program.
How Capital Project Management fits into SLM / Retail IWMS
Location Performance Management systems, like some SLM or IWMS’s, are the perfect home for Capital Programs and Projects. As a Location centric SLM or IWMS will be the master record for all locations, and will also be managing all projects, a well designed capital program management module can fit right into an SLM or IWMS and utilize the imbedded project management, budget management and real estate planning features while providing new roll-up features uniquely required for capital program management. Doing this will allow a customer to keep all of its assets and the history of all work performed on its assets in one system. It also allows for flexibility of change in the business model from new development to remodel to renovation and finally disposition – keeping the complete history of a location from conception to closing in one database.
There have long been best-of-breed solutions in the market for capital project management but with the emergence of SLM and IWMS solutions and the subsequent addition of these features to SLM and IWMS solutions, buying it best-of-breed makes very little sense.
Lucernex’s Lx Retail has provided capital project capability for over 5 years and in our upcoming release, we will be dramatically expanding this to include full support for capital program and project management across any number of locations and including any number of programs or brands. This set of features was designed with the assistance of two current clients who require the system to flexibly handle remodels, renovations and dispositions.
Previous related Blogs
What is IWMS anyway?
IWMS? It’s Location! Location! Location!
The Power of Location Management
IWMS – Why so expensive?
IWMS in the “Cloud”