Capital Expenditure

Bain Capex Impact - featured image

Herbert Blum, a partner with Bain's Telecommunications practice, discusses how companies can utilize the 4 S's of capital effectiveness to improve their strategic position and beat the competition.

The Bain Difference:

We will cut CapEx by 20% in the next 2 years... while still winning short and long-term. double-quote-close

- CEO, telecommunications industry

Bain approaches the capital planning process differently, with an end-to-end process that addresses the most common pain points and is facilitated by proprietary, field-tested frameworks, benchmarks, and software. Bain Capex Impact helps companies improve capital allocations, using the four S’s of capital effectiveness (Situation, Strategy, Spend, Structure) to rapidly diagnose poor capex decisions and bring into focus the best investment opportunities:

  • Situation recognizes that every company and market are different. For this reason, Bain Capex Impact is not one-size fits all, and defies a "cookie cutter" approach.
  • Strategy fixes the common mistake of spreading resources thinly. Hard decisions will be made and the result will be sufficient capex allocations to the geographies and customer segments where senior leaders have made an explicit decision to play to win
  • Spend dives into the details of specific projects to life its ROI beyond traditional procurement levers.
  • Structure improves the operating model, especially the capital budgeting process. Rolling reviews replace the typical annual capital budgeting planning processes, new capital project evaluations are introduced, and role and responsibility allocations are redefined.

CAPEX IMPACT Toolkit:

Bain Capex Impact combines a proprietary field-tested framework with benchmarks and cutting-edge software to facilitate a process for capital reallocation and deliver results. It includes:

  • Rapid CAPEX Diagnostic uses cutting-edge technology to translate a long list of projects into a standardized, executive level view. Its benchmark report ranks overspends versus peers and includes an initial list of potential opportunities to pursue focused on key problem areas.
  • Market Gameboard translates strategic priorities into market-by-market trade-offs, which help companies focus their capital expenditures on "guaranteed best" opportunities, instead of settling for simply "good enough." It includes a strategic fact-base on market value, business unit workshops to force trade-offs, and payout ratio (PoR) opportunity assessments.
  • Capital Allocator stops arbitrary allocations by using a combination of cutting edge technology, benchmarks and best practices. By setting meaningful outcome-driven targets, the leadership team can align to ensure that the plan is delivered on in full.
  • Capital Process Toolbox deploys a process and tools to create optimal multi-year capital plans with transparency and real accountability for delivering the promised benefits.

To learn more about Bain Capex Impact, download our brochure (PDF-255 KB).

Experts:

Bain works as an integrated part of your team, from frontline to C-suite, to deliver true results and make the changes stick. In addition to the leaders listed below, we have an extensive and diverse team of experts ready to serve the needs of clients worldwide. Please contact us to submit a business inquiry.

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