Smarter Ways to Unlock Your Unused Contingency Budgets
- by Melissa Centurio Lopes
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Cash flow is becoming increasingly
important in the current economy; senior executives are looking for smarter
ways of unlocking unused funds for new or ongoing capital expenditure projects.
With project contingency budgets on average equaling 10 percent of overall
costs, are you confident that you can release this cash without risking
existing investments or the health of your overall project portfolio?
This is the central question posed in a new report from the EPPM board, Hedging Your Bets? Optimizing
Investment Opportunities for Great Cash Flow.
The board is Oracle’s international steering committee, which brings together
senior figures from leading organizations to discuss the critical role of
enterprise project portfolio management (EPPM). C-Level
Visibility Will Unlock Funds
In addition to exploring how unlocking your contingency funds enables you to
augment your cash flow (without resorting to expensive borrowing), the report
offers a number of suggestions on how this can be done in a risk-free way,
including
Building an effective
governance framework that
shows the demonstrable value of every project within the portfolio
Undertaking contingency planning
risk assessments that give you complete portfolio
wide visibility into all risk factors
Establishing executive
ownership of the portfolio
to promote a more realistic appreciation of the risk levels inherent in
the portfolio
Creating a chief risk officer
role that can review consolidated
contingencies and risks so they are not considered in isolation
The overriding
message behind the report—and the work carried out by the EPPM board—is the
need for increased C-level visibility across the entire enterprise project
portfolio to enable better business decisions.
Read the complete report in English, Chinese, German, or French.
Read more in the October Edition of the quarterly Information InDepth EPPM Newsletter
