Will the budget request duplicate already existing capacity?
Even smaller companies with minor operations away from headquarters can accumulate excess capacity. Today, this risk is especially acute with capital spending requests for new technology. Observes Copeland: “A company may discover that it has inadvertently created excess capacity in its server networks. How? Its field engineers, unaware that those designing the network had already built in a 30% extra server capacity, may install additional servers to ensure sufficient capacity.” Recommendation: Here, the solution lies beyond the capital budgeting process, with controllers fostering communication among decision makers and making sure they share information. There will then be fewer requests for capital expenditures that accumulate needless and overlapping capacity.
