The world is facing a significant transformation in how it looks at capital investments, adding uncertainty to the already challenging exercise of capital investment planning. Although these investments are increasingly relevant, it will be some time before capital spending globally returns to pre-2008 levels. This perplexing scenario has elevated the topic of capital planning effectiveness to high-priority status for large businesses.
In this Executive Insights, we examine the factors that are infusing the landscape with uncertainty despite strong liquidity. We also provide a recommended approach toward capital expenditure (CapEx) effectiveness that sustains itself in four key elements of the capital processes in any given organization: capital allocation, portfolio optimization, megaproject optimization and enablers.