How public agencies can optimize their capital planning process with what-if ana

1. How public agencies can optimize their capital planning process with what-if analysis When multiyear capital infrastructure programs are underway, it becomes difficult to predict future outcomes. Yet, by understanding the potential impact of different variables, capital owners can make better decisions about allocating resources and mitigating risk. Unexpected changes in crucial cost drivers can significantly impact construction programs. Consider a situation where a new highway construction project is taking place alongside another concurrent project, like bridge maintenance or the replacement of a water utility line. How would you determine the order of priority for these projects? How would you evaluate if the project timelines could result in conflicts or have an impact on each other?

2. The answer is what-if analysis. What-if analysis, also called strategic scenario planning, is essential to optimizing the continuous capital planning process. It involves two steps: 1.Brainstorming and analyzing different future possibilities 2.Evaluating the implications of those future possibilities for an infrastructure program Types of what-if analysis

3. Project prioritization analysis Project prioritization is a type of what-if analysis that lets owners identify the projects that will impact their organization the most so that they can ensure the efficient allocation of resources. With multiple long-term projects, owners can use what-if analysis to identify and rank projects based on importance, urgency, and the degree to which the organization may be affected by a particular change. Cost or cash flow optimization Cost or cash flow optimization allows public agencies to understand the correlation between cost and value in different scenarios and then choose the scenario with maximum business value. For example, when a public agency reviews a multiyear infrastructure program to be taken up for the fiscal year, it can perform a cashflow what-if analysis to identify and eliminate unnecessary expenses without sacrificing quality or functionality. This can be achieved by creating multiple cash flow scenarios.

4. Resource or capacity planning Resource or capacity planning entails assessing how the distribution of resources in one project can impact other concurrent projects. It focuses on ensuring that essential resources, including equipment and skilled personnel, are available at the right time. If critical resources are exclusively allocated to one project, it can lead to delays or the inability to commence other projects. It is crucial to consider interdependencies between projects. Conducting resource and capacity what-if analyses helps identify limitations and prioritize projects, promoting informed resource allocation. Ad hoc scenario planning Ad hoc scenario planning is a type of scenario planning that addresses unforeseen events. In construction management, ad hoc scenario planning helps owners identify and assess risks, develop contingency plans, and improve decision-making. For example, public agencies can consider the risks associated with infrastructure projects, such as changes in regulatory

5. requirements. They can also develop contingency plans to mitigate these risks. Conclusion What-if analysis can serve as an intelligent tool for owners responsible for delivering capital programs to meet their community needs. It empowers them to navigate uncertainty, optimize resource allocation, and respond effectively to unexpected challenges, enhancing project prioritization by leveraging scenario-based planning. With such strategic tools at their disposal, they can steer their infrastructure projects toward success while minimizing disruptions and improving overall project outcomes. Content source - Aurigo To know more visit https://www.aurigo.com/more-reads/how-public-agencies-can-optimize-th eir-capital-planning-process-with-what-if-analysis/