- Do you have too many mandatory projects, such that the remaining discretionary budget is too limited to be able to funnel it towards investments that will help you achieve your goals?
- Are there enough reliability-focused projects selected for funding to allow you to meet your targets? Or, for that matter, even enough proposed for funding?
- Do you have so many high-risk investments that you can’t fund them all within the budget constraints?
If you find yourself answering ‘yes’ to any of the above questions, you might be interested in the solution UMS Group has to offer.
For most companies in asset intensive industries, difficult investment planning decisions are made each budgeting cycle. Following asset management best practices, company strategies and objectives should be aligned to the investment decision-making process and a rigorous process for investment analysis and optimization of the proposed portfolio of investments should take place. With the large capital and O&M budgets and the numerous investments that are proposed each budget year, an investment optimization tool is usually required to best analyze the complex trade-offs that occur when deciding to fund or not fund each proposed investment. The struggle is that most companies either don’t have a unified tool suite in place to support all phases of the process OR the processes are not well enough established to support the consistent use of existing tools/applications.
UMS Group’s Spend Optimization Suite (SOS) application and process is fully aligned with current asset management philosophy and can provide solutions to these difficult risk and investment planning problems. The application is divided into 4 linked modules which provide decision support for the strategic planning, risk management, and investment planning and optimization processes.
Strategic Alignment (SA) Module: The SA Module is the starting point for the SOS Application. Company Strategy is defined and the relative priority of each objective is assigned. This strategy is incorporated into all decision making stages in the subsequent modules.
Risk Identification and Opportunities (RIO) Module: A detailed needs assessment phase, aligned withcompany strategy, should take place via a Risk Register and Analysis tool. Our application uses the RIO module to capture, score, and prioritize business level risks and opportunities that can be mitigated or addressed via proposed investment solutions.
Investment Definition and Scoring (IDS) Module: After the risk management/ needs assessment phase, proposed investment solutions and comprehensive investment scoring of each solution need to be captured. The IDS module of the SOS application captures proposed investment information and scores investments across all success criteria elements of company strategy across two different dimensions, value and risk of deferral. As each investment is analyzed during the investment planning process, there is a key decision to be made: fund the investment or defer the investment for one (or more) budget cycles.
Investment Optimizer (IO) Module: Investment Optimization is critical to analyzing the trade-offs of investment funding decisions. UMS Group’s SOS application utilizes the IO Module to perform these optimization functions.
Back to our questions…Too Much Mandatory Investments, Reliability Goals are Not Achieved, and High Risk Investments Not Funded? If you struggle with these issues and do not have the necessary decision support tools in place to provide adequate investment analysis and solutions, a portfolio evaluation and optimization tool might be a worthwhile investment.
Our Spend Optimization Suite (SOS) application is a web-based solution offered to the asset intensive industry that can help you solve these problems. Interested? Register for our webinar here