IPA’s Early Cost Benchmarking tool calculates industry average cost and schedule benchmarks for a given project scope. This is a valuable tool that can be used both by gatekeepers and project portfolio managers. The benchmarks are developed using either IPA’s Cost Capacity or Cost Effectiveness models.
These analyses are often done prior to the alternative selection (FEL 2) gate for business to gain an understanding of the feasibility of a project. However, they can be done at point prior to authorization as long as the team has a general idea of the project size, location, and technology.
The Early Cost Benchmarking gives the business and project team early cost and schedule benchmarks for a specific scope prior to reaching the FEL 2 gate or another gate before authorization. This allows for better project portfolio management. In addition, the assessment will give business:
Early Cost Benchmarks have even been used by clients for insurance validation on particular process units.
The amount of data necessary for the analysis depends on the point in the project life cycle at which the analysis takes place. In order to perform an Early Cost Benchmarking, IPA will receive a detailed scope of work from the project team, which includes process flow diagrams, capacity/throughput per unit measurements, a list of the top five major pieces of equipment, the environmental regulations that must be met (level of ppm NOx reduction needed by unit), and the location of execution. For specific scopes for which IPA has developed an applicable Cost Capacity model, more specific information about unit size will be required via a Scope Checklist. IPA then will conduct a short teleconference with the appropriate process engineers to determine the accuracy of the information received (which usually lasts less than 1 hour).
The Early Cost Benchmarking will be delivered via a short form report that includes a description of the model (and or comparison dataset) used for the analysis, key cost gap ratios, an industry cost metric and bell curve to show the range of industry costs for a specific scope, and a description of the industry average cycle time of a similar project.