Many IPA clients receive a great deal of added value from benchmarking their estimates early on in project definition. These benchmarkings may take place in Front-End Loading (FEL) 1 or FEL 2. In these engagements, IPA analysts will collect summary-level cost data and detailed cost data where applicable, although some engagements require only information about the project’s planned scope. The analyst will then process the data and use internal models to develop a cost benchmark as a way to measure the capital effectiveness of a project.
This type of analysis can benefit your organization in several ways. It is most commonly employed by project teams still evaluating scope alternatives. High-level cost benchmarking of several different options can help a team choose the most efficient scope to meet business needs. It can also help a team to evaluate early contractor estimates or bids. Other clients have used this service for insurance validation. Perhaps the most common use of this service, however, is to build or support business cases for projects, particularly when new technology, scopes, or market issues are present.