How to Choose A Feasible CAPEX Software Solution?

How to Choose A Feasible CAPEX Software Solution?

April 7, 2022 | Bitscape Team, Digital Solutions

Capital expenditure is usually referred to the investment made by the company on asset acquisition like machinery, vehicles, land, infrastructure, and other properties for company growth and ensured benefit. A CapEx solution is the one that facilitates the complete process of the Capex Management System. Starting from the request to review and finally getting it approved, a CapEx software solution streamlines and optimizes everything.

More is the efficiency of the CapEx software solution; better will be the course of justifiable investment. Hence to do so, one must first analyze the basic attributes that help you to choose your CapEx software solution feasible for your company.

Budgeting model: Think Before Choosing Your CapEx Solution!

The first thing that has to be kept in mind while choosing the CapEx software solution is budget. So, let’s bifurcate the two budgeting systems that must be kept in mind before choosing your CapEx management solution.

Bottom-up approach: 

It is particularly a project-driven approach in which the specific departments plan out the budget for their team as per their next year’s requirement. Be it the asset they require, programs they want to run, empowering the program that is already running, or hiring new employees for the department, everything has to be first determined by the company encapsulating different department lines.

Top-down approach: 

The top-down approach starts from the initiative taken by the upper management team. The upper hierarchy determines the budget of capital expenditure considering the requirement of various departments, operational performance, present market condition, and historical metrics of the previous year. Top-down capital expenditure can be termed as budget allocation because it is already drafted and allocated by the authorized body.

Hence, before choosing the CapEx approval software solution, you must first decide whether it will be a top-down or bottom-up approach.

Read More About Benefits & Overview Of Capital Expenditure (CAPEX) System

Best Practices for Choosing Your CapEx Management System

Besides determining the budget model, several best practices can be incorporated before opting for the CapEx management system. Let’s evaluate them:

Analyze the challenges and risks:

  • Check risk and challenges
  • Analyze the complexity of the project
  • Evaluate tour workforce and their skills
  • Check out the economic condition
  • Determine the availability of resources

Recognize the reason for failure:

  • Incomplete project review
  • Project loopholes and gapes
  • Deficiency of attention in detail
  • Lack of trust
  • Too late risk elimination

Define success and interest factors:

  • Budget completion
  • Scheduled delivery
  • Health safety & environment
  • Security risk
  • Compliance regulation

Execute assured success approach:

  • Tools for people engagement and investigation
  • Use proper safety measures
  • Initiate audits
  • Perform management reviews
  • Analyze performance trends

Evaluate the possibility of success:

  • Get clear metrics of success
  • Determine success indicators
  • Get lagging indicators
  • Find relevancy of the execution
  • Frequent calculation of possible success

Bitscape Plans to Automate your CapEx Management 

Being the frontline Gold Partner of Microsoft, Bitscape has come up with a remarkable strategy to automate your CapEx approval software solution. With an additional extension of fund management functionality, the technology designed and customized by our team of IT experts is capable of streamlining your finance at an advance and professional level.