Capital Planning Process Research Articles

The determinants of effective inter-organization information sharing in the health capital planning process.

This qualitative study examines the determinants of effective inter-organization information sharing in the Health Capital Planning process (the process), primarily in the final stage of the process which focuses on the review of final expenses and release of a holdback. Using thematic analysis and building off a scoping review that was conducted in preparation for this study, we provide a framework for effective information sharing during the process. We interviewed 17 leaders from the Government of Ontario and hospitals across the province. The results of the interviews indicate that the most essential determinants of effective inter-organization information sharing in the process: organizational characteristics; reducing complex bureaucracies; preserving human resources and expertise; clear and standardized information; reducing policy changes; networks; negotiation abilities; information technology; training; record retention; and early planning. This study confirmed the need for effective intra-organization and interpersonal information sharing to achieve successful inter-organization information sharing.

AERB: developing AIRB PIT–TTC PD models using external ratings

The use of credit rating agency (‘CRA’) ratings in a credit institution’s lending practices has been directly criticised since the financial crisis, as these ratings and observed risks have diverged. Some regulators do not allow the use of external ratings as direct inputs to a credit institution’s internal PD/ratings model and hence the capital planning process as regulators prefer the use of internal assessments generally. However, regulators allow for the use of CRA’s long run average default rates (‘DR’s) to benchmark an institution’s internal PD model output. A recent study conducted by us shows however that indiscriminate use of such benchmarks can introduce important biases in credit lending. Even with these criticisms and new regulatory constraints, one can still make use of the rich CRA data available to create regulatory compliant PD models. In this paper, we propose a class of ‘Agency Replication’ style models which make use of obligor information and CRA long term DR information. Such models are extremely useful in cases where a credit institution has limited default samples where a purely internal default based model could be potentially erroneous, and where in contrast, agencies have plenty of data supporting development of robust models. In this paper we show how one can use this class of models for modelling portfolios such as Large Corporates, Banks, Insurance, etc. We discuss our experience developing approved, AIRB models augmented by external default data and hence colloquially call them Advanced External Ratings Based (‘AERB’) models. We show various simplifications of the formulation and show how they can be used in PIT-TTC based credit rating systems.

Achieving Vision Zero: Data-Driven Investment Strategy to Eliminate Pedestrian Fatalities on a Citywide Level

San Francisco, California, completed a robust, data-driven process to define and prioritize pedestrian safety improvement projects. The goal of this process was to identify the lowest cost and most effective strategy to meet a citywide goal to eliminate traffic fatalities. A team of planners, engineers, and epidemiologists examined longitudinal pedestrian collision data to identify the major factors that corresponded with pedestrian– vehicle crashes in San Francisco and focused on locations with the highest frequency and severity of pedestrian injuries. Collision profiles were developed to classify the most frequent types of vehicle–pedestrian collisions at each intersection. Corresponding pedestrian safety countermeasures, selected for their relatively high effectiveness and low cost, were matched with applicable collision profiles. A scenario planning process was used to formulate a final investment strategy: a prioritized pedestrian safety project list that targeted the specific needs at priority locations. The data-driven capital planning process helped to secure funding commitments to implement pedestrian safety projects at 195 intersections over the course of 5 years, which moved San Francisco closer to its policy objective to eliminate pedestrian fatalities. All cities face a challenge in the employment of rigorous analysis to select and prioritize improvement projects with limited funding. This study created a new, streamlined approach to capital-constrained project development and prioritization that is applicable to all types of safety improvements across any jurisdiction.

Opportunities for Programming Suburban Multimodal Transportation Retrofits through the Maintenance Program

Half of Virginia's population lives in a jurisdiction with fewer than 1,000 people per square mile. Low densities, segregated land uses, and a lack of multimodal infrastructure limit opportunities for non automobile transportation options. In those locations, the incorporation of nonautomobile modes into the capital programming process is difficult without dedicated funding sources, advocates who fully understand the programming schedule, and mechanisms with which to compare fairly the benefits of such investments with traditional highway investments. This paper examined an effort to bring one type of nonautomobile investment–-bicycle accommodations–-to a suburban corridor in metropolitan Richmond, Virginia, a location that would not otherwise appear conducive to alternative modes. The catalyst for considering bicycle accommodations was the maintenance process rather than the capital planning process. Five case study characteristics made this consideration feasible within the suburban context: ( a) information exchange between members of a county board of supervisors and the leadership of a state department of transportation; ( b) staff willingness to interpret recent design guidance carefully to adapt available infrastructure for use by other modes; ( c) a realization that the maintenance program yields an opportunity to implement new multimodal infrastructure; ( d) an ability to present multiple multimodal options, because any project development process consists of many decision points and a preferred option may later become infeasible; and ( e) robust consideration of findings from previous work that may influence the relative safety of possible options. Although the case study focused on bicycle accommodations, these characteristics may be of interest to others using the maintenance process to improve accommodations for other modes.

Protecting Human Capital through the Intersection of Architecture, Engineering and Worker Safety

Prevention through Design (PtD) is intended to protect workers by eliminating hazards at work.  Capital Project Planning is a process that businesses follow to improve facilities. Human capital is protected when safety management is given co-equal consideration with architecture and engineering throughout the capital planning process.

Questions and Answers From IRI's Members

Q: Do shared service centers work? Our company is considering moving to a shared service center model for several of our functions. We would like to hear from individuals with experience of shared service centers. What are the pros and cons? How long have their shared service centers been up and running? Would they consider them to be successful? Manager, information technology services company Answers: We have used shared services for Corporate Engineering for around 8 years. Engineering gets their priorities through the stage-gate process or through our capital planning process. Engineers are assigned projects and then put their hours into SAP so they are directly charged out to the appropriate business unit. When resources in engineering aren't sufficient to cover all the needs, engineering fills the gaps with external engineers who also are charged directly to a business via SAP. The biggest advantage is being able to leverage skills and expertise across business units (for example, we have one civil engineer who is shared across the company). In addition, everyone is working off of one set of engineering standards, project management process, drawing and equipment filing system, etc. It's been so successful that we've been rolling out this approach to Research and Development, Quality Assurance, and Analytical Methods Development. We're gradually getting everyone access to SAP and including projects of all types. Linda M. Hicks, Vice-President Corporate Engineering and Technology Vertellus Specialties Inc. In this space, we will occasionally publish queries and answers from IRI's email-based community forum. Questions and responses are selected for completeness, relevance, and interest and edited for format and grammar and to fit the available space. The community forum is available to IRI members via the IRI website; from the home page, select Collaboration Center, then Community Forum. For more information about IRI membership, visit our website. http://www.iriweb.org I manage a shared facilities services organization across four sites. We created this organization in 1999 after working with several consultants and considering all options, such as total outsourcing. With the shared services concept and the use of LEAN methodologies, we continue to drive our overhead cost down. We eliminated many redundancies and used the pay as you need concept. Standardization of procedures, including safety, has proven to be a great benefit. The shared services concept worked so well that it grew into IT, HR, Library Services, and Analytical. Mostly pros, one con; if possible, organize your shared services organization under one group from a headcount standpoint so everyone can be treated the same. Gary Hyek Manager, R&D Facilities Services PPG Q: How do you establish dual career ladders? I am looking at establishing dual career ladders within R&D. I am particularly interested in how the responsibility for managing people on the managerial and managing technology on the technical is made equivalent within the organization. Kathleen O'Leary Havelka, Sr. Director Global Research Dev. & Engineering Diversey, Inc. Answers: To have a viable dual career path in an R&D organization, you need: 1. A similar career structure in the business units of the company or a way for the R&D people's status to be understood and acknowledged by their business unit peers. 2. Job descriptions and rewards that are matched to the skill sets and personality profiles of the most productive types of people on the different paths. This comment comes from the perspective of Hughes Electronics (and Hughes Aircraft). Hughes had a well-established triple career ladder in its business units-line management, technical specialists, and project/ program management. …

Framework for Innovative Public Spaces

The New York City Department of Transportation (DOT) is experimenting with creating new public spaces quickly in the public right-of-way. Through the use of painted asphalt, planters, folding chairs, rotating public art, and other temporary materials, construction time and costs are minimal. This innovative strategy allows the department to create immediate neighborhood change while formalized design and construction move through a longer capital planning process. Five reclaimed spaces were analyzed, and the way that people interact with these plazas, each other, and traffic while they enjoy new view corridors and experiences in the city was evaluated. Goals of this research were to understand how plaza design elements affect plaza use and to provide recommendations for informing development of plazas in other cities. This project was conducted in collaboration with Project for Public Spaces. Observational data were used to gain information about physical aspects of the site and patrons’ patterns of use. Each site was filmed from a bird's-eye view during peak periods of weekday plaza use. Video data were used to analyze site geometry and features and to conduct activity mapping, spot counts, and user path tracking. User surveys provided direct feedback on aspects of the plaza. Study findings provide guidelines for reallocating street space for pedestrians to maximize use, safety, and appeal. The New York City DOT provided report feedback but did not participate in the development of the analytical approach, the data collection, or the analysis.

A Collaborative Capital Planning Process for Departments of Radiology

Having the right capital equipment available by both type and capacity is essential to establishing and maintaining a successful and sustainable radiology practice. Acquiring capital equipment for imaging has become increasingly challenging as the scope and magnitude of imaging services have grown over the past two decades and therewith the magnitude of funding required. Here we describe a comprehensive approach to the problem that depends on, and at the same time promotes, simultaneous investments in both human and social capital.

Balancing Risk and Funding: Risk-Based Capital Program Management

Balancing Risk and Funding: Risk-Based Capital Program ManagementMany utilities have discovered that fine tuning their capital planning process to integrate asset management concepts and tools can yield cost savings and performance improvements. The Birmingham Water Works Board (BWWB) made the decision to kick off their asset management efforts with a business oriented and financially driven Capital Investment Plan (CIP) process that focused on project...Author(s)Richard JacobsSonny JonesT. Carter JasonDavid SklarSourceProceedings of the Water Environment FederationSubjectSession 18: Risk Based Approaches for Asset ManagementDocument typeConference PaperPublisherWater Environment FederationPrint publication date Jan, 2010ISSN1938-6478SICI1938-6478(20100101)2010:1L.468;1-DOI10.2175/193864710798286155Volume / Issue2010 / 1Content sourceUtility Management ConferenceFirst / last page(s)468 - 478Copyright2010Word count221Subject keywordsCapital planningrisk managementproject prioritization

Asset Management Program Implementation: What a long, strange trip it's been

In response to concerns about aging infrastructure, the Water Resources Department (WRD) of Asheville, North Carolina, developed a comprehensive asset management program beginning in mid‐2003. Elements of WRD's existing practices were evaluated to guide program development, WRD's business processes were mapped to identify key practices and improvements, and asset management principles were incorporated into WRD's capital planning process.

Centralized Capital Planning Process Prioritizes Needs

45 At many healthcare organizations, the capital planning process is a decentralized affair, with decisions on medical equipment purchases made on a case-by-case basis, often swayed by heavy lobbying from medical departments. Efficiency and cost effectiveness are typically not well served by such a system. When the Group Health Cooperative (GHC) found itself in a financial crunch in the mid-1990s, senior management decided that they needed to do a better job at capital planning. They created a centralized system to prioritize needs, save money, and improve planning across the system.

Measuring and improving the capital planning process

Much research has been done into capital planning approaches on both sides of the Atlantic over several decades, but it has tended to be one‐dimensional – focusing almost exclusively on the application of financial appraisal techniques. Meanwhile little has been done to examine either the efficacy of other elements of the process or executives’ satisfaction with the way the process works. Members of Cranfield School of Management’s Centre for Business Performance, sponsored by Accenture, set the record straight with both literature and practitioner research into the capital planning process that also presents a new framework and develops best practice principles.

Capital planning and the private finance initiative: Cost minimization or health care planning?

This paper looks at the process of Private Finance Initiative (PFI) planning in the UK National Health Service, and addresses the extent to which it ensures the adequacy of service provision. The Private Finance Initiative is intended not only to substitute private for public financing of healthcare facilities, but also to produce efficiencies in the operation of these healthcare services through the introduction of innovatory private sector practices. The paper contrasts the traditional capital-planning process within the health service, which was based on estimates of service need, with the PFI planning framework, which is finance led. PFI planning also has to be seen in the context of other organizational and financial reforms within the health service which have increased the pressures on health trusts to operate like commercial businesses and to rationalize service provision to meet financial targets. Drawing on a series of interviews and documentary sources, the paper shows how these pressures, coupled with the tendency of PFI to increase capital costs, have led to drastic actual and planned cuts in services not only in the facilities directly affected by a particular PFI but also in other areas of local healthcare provision which have not been justified by detailed analysis of projected healthcare needs.

Integrating Public Transportation Facilities and Equipment Management Systems into Capital Improvement Planning Process

A Public Transportation Facilities and Equipment Management System (PTMS), as proposed in the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), is a tool to assist in the management and utilization of transit facilities and equipment so as to ensure the efficient and effective use of resources. A framework for the application of PTMS elements in the public transit capital improvement planning process is proposed. By using a PTMS as a part of the capital planning process, broad concepts such as needs fulfillment and performance improvement may be embodied in a systematic process to program transit bus capital investments. With data from the Federal Transit Administration’s National Transit Database (NTD), the practical applicability of this framework is investigated in the context of the capital planning process employed by the regional transit authorities and the state transportation agency in Massachusetts. Vehicle replacement needs for a Massachusetts regional transit authority are estimated for a 5-year planning window using the NTD data in conjunction with predictive condition models. These models, developed by Purdue University and the University of Massachusetts at Amherst, use easily quantifiable and objective measures such as age and mileage to predict the future condition of a vehicle. NTD data are also used to identify opportunities for performance-based capital incentives among the Massachusetts regional transit authorities.

Prospective payment for capital: An examination of current issues

Congress has suggested that a prospective payment system for capital should permit the continuation of cost-based reimbursement for certain projects. A study was conducted to examine the components of the capital planning process used by eight hospitals and the effect of this process on completion of capital projects.