Our 4 tips for a Successful Investment Strategy

Maintaining organizations’ physical assets in good operational condition is a key challenge today, in the context of asset end-of-life cycle, as well as a reduction in financial and human resources. It is therefore increasingly important to make sure that the investments made (and to be made) are efficient. But how can we be certain to invest the right dollar, in the right place, at the right time?

The issue of investment strategy in public or private organizations revolves around two main issues :

• Capacity development, aimed at creating new assets and offering new services ;
• The maintenance of current ones, aimed at providing quality and continuity of services.

The current trend being rather to control and optimize the existing fleet, here are our 4 tips for a successful investment strategy.

Tip #1: Know the direction

First of all, you need to have a direction. All too often, major investments are made in buildings or infrastructure whose future within the organization is not guaranteed. The main question to ask is: is the investment program to maintain my asset base in line with the strategic and political intentions of the organization? To answer this question, one should ask oneself the following questions:

• The objectives and expectations of stakeholders external to the organization (shareholders, constituents, regulatory bodies, users, etc.) ;
• The objectives and development plans of the organization’s internal stakeholders (elected officials, board of directors, general management, etc.) ;
• Prospective analysis of supply and demand in terms of capacity and service offerings at the organizational level.

In certain cases, interventions related to the security of assets are imperative, but overall they must be limited to the strict minimum while awaiting a strategic positioning on the future of these assets.

Without a clear and shared strategic vision at the different levels of the organization, it is impossible to be sure to undertake coherent investments. It is the responsibility of top management to assert its leadership in this area and to ensure that all strategic directions are known and understood by all.

Tip 2: Target the main issues and identify the opportunities

Once the focus is known and shared, the question of what intervention strategy to adopt must be asked. It must be based on the organization’s top challenges. Carrying out a global inventory of fixtures, including technical, functional, occupational, and financial dimensions, will help determine them. Imperative needs are those deemed critical and which may generate risks to which the organization does not wish to be exposed. Other, more tolerable needs are those that the organization is prepared to deal with for a period of time.

The objective is therefore to size projects (global or targeted), to address these primary needs, and to integrate potential opportunities into them.

Take, for example, a boiler room renovation project in a building open to the public that includes outdated gas boilers. These boilers regularly malfunction, leading to a significant increase in corrective maintenance and a potential threat to operational reliability.

In this case, the organization will consider the replacement of the boilers as the priority requirement, so that a heating failure cannot occur.

Two types of opportunities should be considered.

• Is there a technological modernization opportunity to be seized?
• Is there an opportunity for the scope of interventions to be integrated into the project?

Technological opportunities usually lead to significant additional costs when implementing the technical solution. However, they can generate savings over the entire operating cycle of the equipment. Careful consideration of the overall cost of the operation must be undertaken to have a complete view of the implications of the different scenarios.

Seizing peripheral opportunities will allow you to take advantage of the downtime generated by the replacement of critical equipment. The organization will then be able to deal with the related issues and deliver a project that restores maximum utility to the overall system. Ultimately, the system will be able to start a new life cycle and the organization will have optimized the downtime.

Tip #3: Ensure that the available resources are aligned with the organization’s projects

The implementation of budget envelopes ensures that the financial resources are in line with the defined strategic orientations. However, the financial factor is not always the one that limits the conduct of projects. Often overlooked, a controlled resource management strategy (material and human resources) provides an understanding of the resource requirements for the smooth running of projects, both at the HR level (maintenance, project management, support function, etc.) and material level (procurement, inventory management, etc.). A poor resource management strategy can be problematic for project tracking, especially in organizations with complex assets (such as hospitals) where the issue of service continuity is paramount. Very often, day-to-day management takes precedence over the ability to monitor these large-scale projects, which have a strong impact on the organization’s development.

It is then necessary to take a step back to identify the adjustments that need to be made (in the scheduling of projects or the allocation of human and material resources) to enable the organization to be able to carry out its investment program.

Tip #4: Involve stakeholders

Generally speaking, organizations are structured in “silos”, which leads to a lack of cross-functionality in terms of the asset management and asset maintenance issues faced by project owners. Decision-making and accountability will be all the more effective if the various players share a common language and can interact based on reliable and objective data. The organization must therefore be structured in such a way as to drive a common dynamic around the organizational project and to ensure that the strategic and operational aspects are properly aligned.

It will then be possible to involve and empower the different actors in the decision-making chain by evaluating the impacts of the different investment choices in an objective manner.

Decision-making and accountability will be all the more effective if the different parties involved share a common language and can dialogue based on reliable and objective data.

The methodology we have developed helps to draw up an objective inventory and simple performance indicators that everyone can understand. Thanks to our experience, we can help you to build your investment strategy by responding to the different challenges of your organization.

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Keywords : Multi-Year Investment Plan, Strategy, Opportunity, Common Language, Project, Overall Cost

Article date : 09/09/2020

Editors : Camille ZYLBERYNG

Sources :

• Le coût global dans les projets de bâtiment, CEREMA – Septembre 2018
• Guide d’aide à la prise en compte du coût global de possession dans les marchés publics – 2012