In this article
In this article
Capital planning KPIs are not just for the accountants. When used right, these metrics help you cut through the noise, highlight which projects are worth funding, optimize your project portfolio, and track performance to plan.
The real value of capital planning KPIs is in their ability to help you make better decisions. From evaluating business cases to setting priorities, allocating budgets, and tracking progress, KPIs bring structure to an otherwise unpredictable process.
Unfortunately, too often they’re disconnected. Metrics are spread across disconnected spreadsheets and systems, making it hard to see what’s working (and what’s not) in time to act. Metrics are seldom continuously assessed to ensure that active projects, especially those over-running cost and schedule plans, are still justified.
Metrics are often not properly assessed post-project to evaluate actual performance and inform future decision making.
Without the fear of post-implementation reviews, projects are often justified on fanciful and optimistic assumptions, wasting precious time and resources.
In this blog, we’ll explore capital planning KPIs that truly move the needle, where they belong in your planning process, and how tools like Stratex Online can help turn scattered data into insights that you can use with confidence.
The 4 Pillars of Capital Planning KPIs
Capital investments aren’t quick wins. They stretch over years, distract key resources, and cost a fortune. It can take months to progress from your investment initiative, to project screening, to business case. However, capital investments shape the future of your organization and are essential to strategic success.
Without the right metrics being monitored throughout the project delivery lifecycle and being evaluated post-implementation, you risk making the wrong capital investment decisions.
Strong capital planning KPIs connect strategy to execution and results. They help you focus your investments, spot risks early, keep your plans on track and make better decisions next time when things go wrong.
At a minimum, every organization should track KPIs in the following four areas to succeed in modern capital planning, including the allocation of financial and human capital:
- Financial Health.
- Project Delivery.
- Strategic and Risk Alignment.
- Governance and Accountability.
1) Financial Health
Before you approve any project request, you need to know it makes financial sense. Financial health KPIs help validate a project’s potential upfront and track whether it continues to deliver value over time.
These metrics aren’t just about proving return on investment. They give finance teams and decision-makers the confidence to allocate capital wisely, compare competing proposals, and avoid costly surprises later on.
The Importance of Financial Health KPIs
With the right financial KPIs in place, approvals move faster, risks are easier to spot, and cash flows to the investment initiatives that truly impact the bottom-line.
How to Track Financial Health KPIs
Start with ROI, net present value (NPV), internal rate of return (IRR), and payback period. Ensure you embed these key financial metrics in business cases early, so that expectations are clear from the get-go. Once these capital planning KPIs are embedded in the business case, you can track them with real-time dashboards that compare forecasts to actual results.
Use Case
Let’s say you’re choosing between two infrastructure upgrades. With Stratex Online’s built-in ROI and NPV financial metrics, it’s easy to see which option delivers greater long-term value. Once the project is initiated, tracking capital expenditure and updating expected returns helps keep budgets in check and stakeholders aligned.
2) Project Delivery
Project delivery KPIs help you stay on top of progress, spot delays early, and make sure projects are delivered on time and on budget. These capital planning KPIs are the pulse of your capital program. They give project managers and engineering leads the visibility they need to manage timelines, resources, and risks as they arise.
The Importance of Project Delivery KPIs
Delays, resource bottlenecks, and scope creep can erode even the most promising project. By tracking project delivery KPIs, teams can course-correct quickly, provide meaningful information to stakeholders, and ensure the project stays on track to deliver its intended value.
How to Track Project Delivery KPIs
- Monitor forecast expenditure variances, schedule variance, and resource utilization.
- Generate Gantt charts and real-time status flags linked to your forecasts help maintain visibility.
Practical Use Case
Imagine a Program Manager is overseeing a portfolio of manufacturing equipment upgrades. With Stratex Online’s Gantt view, they can see that a project is falling behind schedule, prompting them to reallocate resources and adjust timelines. This degree of project oversight helps businesses save time and money, while also involving key stakeholders in the decision-making process, and optimizes your asset replacement budget.
3) Strategic and Risk Alignment
Strategic and risk alignment KPIs measure the performance of capital projects in relation to organizational goals and risk management. This subset of capital planning KPIs ensure that capital investments are aligned to business objectives whilst minimizing potential risk.
Why Alignment and Risk KPIs Matter
Executives and managers must ensure that every capital investment advances long-term objectives without introducing unnecessary risk. These capital planning KPIs objectively point out where to adjust priorities or rebalance portfolios as conditions change. This allows key decision makers to drive toward achieving strategic goals, proactively address risk, and justify decisions with clear, defensible data.
How to Track Alignment and Risk KPIs
One of the best ways to track these capital planning KPIs is through scoring models that reflect your strategy and risk appetite. You can develop an overview of this by using metrics like strategic fit score, portfolio risk index, and lifecycle return on investment.
Practical Use Case
A strategy team is reviewing next year’s capital plan. Using Stratex Online’s portfolio scoring model, they identify projects with high strategic fit but elevated risk. Subsequently, they can easily optimize the project portfolio to maintain alignment while reducing risk exposure.
4) Governance and Accountability
These capital planning KPIs focus on control and executive credibility. Governance and accountability KPIs track how well capital planning processes are controlled, documented, and responsive to change. But why do they matter?
Why Governance and Accountability KPIs Matter
These seemingly abstract metrics help you show that capital planning is reliable, even when things get busy or complicated. They make it easier to gain project oversight, lower the chances of problems during audits, and help ensure decisions can be explained and justified.
Governance and Accountability KPIs
Enhanced governance and accountability means less stress about compliance, the elimination of audit surprises, and greater confidence that any capital investment will survive internal and external scrutiny.
- Monitor compliance rate.
- Audit resolution time.
- Change order frequency.
These KPIs can also monitor the active use of:
- Workflow-driven approvals.
- Audit trails.
- Change impact alerts.
Practical Use Case
A compliance officer is preparing for an internal audit. With Stratex Online, they can easily access the history of approvals and change orders for a major project. The audit trail confirms that governance protocols were followed, which reduces risk and saves time.
Capital planning KPIs provide deeply valuable insights to numerous stakeholders throughout the project lifecycle. That’s why I’ve dedicated an entire article to this topic.
Why Spreadsheets Cannot Effectively Track KPIs
Did you know that 85% of SAP customers rely on spreadsheets for capital planning? It’s a shockingly high percentage of SAP users. Spreadsheets have their place, but they weren’t built to track capital planning KPIs across a large portfolio.
Spreadsheets and Excel were never designed to handle the complexity of modern investment decisions. When finance, engineering, and strategy teams are all working off static files, it leads to outdated data, disjointed insights, and plenty of room for error.
- There’s no single source of truth, everyone’s working off different versions.
- They don’t scale when you’re managing dozens (or hundreds) of projects.
- KPIs get buried in tabs and formulae, easy to miss and hard to trust.
- Instead of making decisions, teams waste time trying to piece together the big picture.
When your capital planning KPIs sit in disconnected spreadsheets, you lose the visibility and speed you need to act with confidence. Instead of driving strategy, your data ends up slowing it down.
How Stratex Online Uses KPIs to Improve Project Clarity
To get real value from your KPIs, they need to be part of your daily workflow, not buried in spreadsheets or dashboards that no one checks. Stratex Online is designed to give you greater visibility without adding complexity to your capital planning processes.
Bring your KPIs into Focus
- Role-based dashboards show the right level of detail for each user, whether you’re managing the whole portfolio or zeroing in on a single project.
- Embedded KPIs are built into business cases, project submissions, and scenario analyses from the outset, ensuring important metrics are recorded early and can be monitored throughout the project lifecycle.
- Drilldowns give users an easy way to move from overall portfolio summaries to detailed forecasts and delivery metrics.
- Pre-configured KPI repositories help you monitor and track projects quicker, with the ability to customize them as you go.
Stratex Online isn’t just about corroborating more data. It makes sure the right information is visible, easy to act on, and aligned with your strategy. Digital transformation revolutionized capital planning with the advent of AI. Advanced analytics, real-time data, and process automation are accessible with the use of Stratex Online, further enhancing the power of your capital planning KPIs.
Data-Based Decisions Drive Capital Planning Success
Moving beyond scattered spreadsheets is the first step toward effective capital planning. To achieve greater success, you should begin tracking the right capital planning KPIs at every stage of the business case process. From the intake of project ideas to project selection and prioritization, capital planning KPIs help you make better investment decisions, while also building evidence to justify decisions made.
With capital planning software like Stratex Online, your team can quickly address problems and start making informed, proactive decisions in real-time. This helps you to focus on the projects that matter most, and maximize value throughout the entire project lifecycle.
