Helping Business Leaders Make The Best CapEx Decisions

Assumptions are made at every level, often not intentionally, so they slip through unchallenged. It could just be an internal bias to keep doing things a certain way. It’s often just different experts seeing the world through different lenses, with different objectives and outcomes. Or the parameters of today are assumed to be fixed. There’s gold to be found when assumptions are brought to the surface and challenged, unlocking a different perspective that leads to different opportunities and optimised solutions.

Engineers deliver to precise engineering outcomes. But adding in imprecise variables and the many layers of future unknowns means that solutions become over-specified to mitigate the risk of falling short of future performance demands and results in excessive levels of redundancy. Over-specification adds complexity and cost, requires longer delivery times making the solution less able to adapt to future changes in the business environment. It’s exactly the opposite of what the business will be looking for over the coming years when inefficient supply chains and outdated project delivery systems will already present enough challenges. These technical decisions aren’t usually clearly visible to those working on the business side of the equation, but they need to be controlled as a business decision.

In an ideal world, business outcomes, the operational plan and business model would be shaped in tandem with the engineering outcomes, each challenging and sharpening the other. These are two distinct sides to the equation that have to be tuned together. But since there isn’t enough ‘common language’ or understanding between the two sides, there’s very little collaboration or alignment in outcomes.

Each option delivers different business outcomes, risks, assumptions, constraints, opportunities and probabilities. Typically, options presented to the business leaders are either over simplified or over complex and detailed. The result is the same, the key decision making criteria is obscured. Decisions are made without decision makers properly understanding the assumptions made. The wrong choice is made and future scrutiny may leave them unable to defend the decision. Options must always be designed to clearly and accurately frame the business impact using consistent and comparable criteria so each can be reliably weighed and compared.