One of many types of plans that are developed by organizations to ensure responsible stewardship of their assets.
outcome of the planning process specifying a number of capital projects
to be developed in a defined planning horizon,
typically over a 5-Year
of the Plan
Listed below are the key components of a capital plan
A. The Context
B. The Asset Portfolio
- The PESTLE context
- Capital Planning Framework - A simple diagram that represents a conceptual model of the overall architecture of the capital planning process
- Capital Planning Goals
- Capital Planning Policies
C. Measurement & Evaluation
- Asset Inventory
- Prioritization Scheme
- Capital Project Lists
D. Reference Materials
- Data accuracy and reliability
- Trade-offs between departments
- Decision-making criteria
Attributes of the Plan
Listed below are the primary attributes of an effective capital plan.
- It is aligned with the organizations
policies and objectives
- It is integrated with the other plans
- It has the commitment of top management
- It is realistic
Architecture/Structure of the Plan
Listed below are some the key concepts associated with capital plans.
A. Physical Concepts
B. Financial Concepts
- Capital Asset
- Capital Project
- Planning Horizon
C. Governance Concepts
- Capital Needs
- Capital Expense
- Financial Capacity
- Replacement Reserve
|Timeframe||10yrs+||3 yrs||1 year|
|Purpose||Strategic choices about investment||Set shorter term priorities||Approve funding for projects|
Capital Plan in the Hierarchy
The organization's capital plan occupies one of the central layers of the inspirational-and-aspirational hierarchy.
Without an adequate capital plan the organization will
encounter difficulties when developing some of the other layers of
the aspirational-inspirational hierarchy.
Risks Associated with the Plan
Included below are some of the primary risk associated with the development and implementation of a capital plan.
A. Development Risks
B. Implementation Risks
- Lack of buy-in from certain stakeholder groups
- Disagreement over priorities
- Inaccurate capital estimates
- Insufficient funds
- Unexpected failures of assets
Process of Developing the Plan
Listed below are some of the key steps in developing the capital plan.
- Review the organization's policies and objectives
- Determine the organization's existing maturity levels on sustainability: a) depth of the framework, b) integration into AMS
- Review the PESTLE context
- Develop the capital plan framework
- Commission a Capital Needs Assessment (CNA)
- Conduct workshops with knowledge resources
- Prepare the draft plan
- Approve the plan
- Action the plan
- Track and measure progress/performance of the plan
- Review and update/refine the plan
Fig. Analyzing the approximate 27,0000 words inside ISO 55000/55001 to
reveal patterns in the requirements. Planning features prominently.
Planning must be iterative, dynamic and continuous. If it becomes
static it starts to look more like an old dusty blueprint rather than a
Fig. The hierarchy of plans in ISO 550001 from OCP to SAMP to AMPs.
The aspirational-inspirational hierarchy of organizations with plans represented as one of the layers.
Fig. Planning is the 3rd chapter of the seven chapters of ISO 55000/55001.
Some organizations struggle with "paralysis through analysis" (and
never feel comfortable to finalize a plan) and others who perhaps fail
to "look before you leap" (start too quickly).