1. Planning for Performance
Capital Planning Tradeoffs in Excel
2016 AMPO Conference
Fort Worth, Texas
Joe Zissman
October 27, 2016

2. Outline What are “tradeoffs” in capital planning?
Defining budgets, priorities, and metrics
Best practices and implementation
How can you perform tradeoff analysis?
“Bottom-up” selection
“Top-down” selection
Planning for Performance
Demo in Excel

3. Tradeoff Analysis

4. What is Tradeoff Analysis?
You have a set amount of resources…
How do you spend them to best achieve your objectives?
Resources:
Budget
Operating
Capital
Staff
Project managers
Support staff
Outside labor
Political Capital
Objectives:
Asset types
Bridges
Pavement
Bike lanes
Transit
Priorities
Safety
Customer service

5. What is Tradeoff Analysis?
You have a set amount of resources…
How do you spend them to best achieve your objectives?
Budget
Budget
Bridge
Pavement
Highway
Transit
Safety
Customer Service
Capital
Maintenance
Budget
Budget

6. What is Tradeoff Analysis?
Characteristics of Best Practice
Objectives defined by performance metrics
Data-based, measurable, comparable
All objectives managed by a single process
Implementation
Define objectives
Select metrics
Design a methodology
Select a tool

7. Methods of Tradeoff Analysis

8. Capital Planning Inputs
Projects
Data

9. How to Combine the Inputs?
“Top-down” Approach
Projects are bucketed by objective
Distribute funds into the buckets
Select projects within the buckets
“Bottom-up” Approach
Each project = multiple objectives
Overall score from components
Take top scorers until budget is gone

10. Choosing a Methodology
“Top-down” prioritizes your priorities
Useful when you don’t own the assets or projects
Works best with built-in buckets (programs)
“Bottom-up” unifies the playing field
Useful when you simply want rank-order alternatives…
…but, it may limit big-picture thinking
The best option probably combines the two

11. Tradeoff Analysis in Excel

12. Choosing a Tool Spreadsheet-based tools Dedicated software packages
NCHRP Report 806 – Bottom-up methodology
Planning for Performance – Top-down methodology
Dedicated software packages
Scaling and weighting of metrics
Computing and optimizing overall performance
Click-and-drag budget interfaces, visualizations
Many users: How much can I do in Excel?

13. Planning for Performance