nerdexam
Cisco

400-007 · Question #188

An enterprise has identified these causes for inefficient CAPEX spending: - CAPEX planning is driven by technology and not by business objectives. - The CAPEX planning team lacks the data it needs…

The correct answer is A. Build a financial control function that delivers high-quality reports on operational expenses for. Establishing a financial control function that produces high-quality reports directly addresses the identified root cause of the CAPEX planning team lacking the data required for due diligence.

Gathering and Clarifying Requirements

Question

An enterprise has identified these causes for inefficient CAPEX spending:

  • CAPEX planning is driven by technology and not by business

objectives.

  • The CAPEX planning team lacks the data it needs to perform due

diligence tasks.

  • The organizational structure lacks sufficient accountability and

incentives. Which corporate cultural change contributes to improving the effectiveness of CAPEX spending?

Options

  • ABuild a financial control function that delivers high-quality reports on operational expenses for
  • BCxO-level staff must have a full technical understanding but the should not trust their technical
  • CAdopt new organizational models that promote real accountability for ROI, not just revenue,
  • DMarketing and product management divisions must reduce their CAPEX budgets significantly to

How the community answered

(18 responses)
  • A
    61% (11)
  • B
    22% (4)
  • C
    6% (1)
  • D
    11% (2)

Why each option

Establishing a financial control function that produces high-quality reports directly addresses the identified root cause of the CAPEX planning team lacking the data required for due diligence.

ABuild a financial control function that delivers high-quality reports on operational expenses forCorrect

Building a dedicated financial control function introduces structured, data-driven reporting into the CAPEX planning cycle, resolving the identified gap where the planning team lacked the information needed to evaluate investment decisions rigorously. This cultural change shifts decision-making from intuition-based or technology-driven assumptions toward evidence-based analysis aligned with business objectives. It also creates an accountability mechanism by making financial performance visible and measurable across the organization.

BCxO-level staff must have a full technical understanding but the should not trust their technical

Requiring CxO-level staff to hold deep technical knowledge while explicitly not trusting technical staff creates an organizational trust deficit and removes subject-matter expertise from decision-making, which would worsen rather than resolve any of the three identified root causes.

CAdopt new organizational models that promote real accountability for ROI, not just revenue,

Adopting organizational models for ROI accountability targets the incentive and accountability cause but does not supply the underlying data infrastructure that the planning team needs to perform due diligence, leaving the most operationally critical gap unresolved.

DMarketing and product management divisions must reduce their CAPEX budgets significantly to

Arbitrarily reducing CAPEX budgets for specific divisions does not address the root causes of poor planning processes, data deficits, or misaligned incentives, and could restrict legitimate investment without any improvement in decision quality.

Concept tested: Corporate cultural change for effective CAPEX governance

Topics

#CAPEX planning#organizational change#ROI accountability#business objectives

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