The impact of a project system’s quality is enormous. A well-functioning project system provides a company with a competitive advantage in terms of capital and unit product costs, better quality facilities, and better responsiveness to business needs. As would be expected, a poor project system can have devastating effects on capital project performance. In fact, a poorly functioning project system can increase the total installed cost (TIC) by 20 percent. In addition, a poor project system will typically have longer cycle times that can reduce the project’s return on investment by 3 percent or more.
An IPA benchmarking aims to understand the effectiveness of the practices and procedures (i.e., your project system) employed by your company in planning, defining, engineering, constructing, and starting up capital projects. In other words, these studies help your company better understand how you actually conduct capital projects, how other companies conduct projects, and how your approaches and procedures compare with Industry.
IPA uses our Project Evaluation System (PES®) to conduct both qualitative and quantitative analyses that measure the effectiveness of a capital project system. IPA’s experience and approach to benchmarkings provide unique advantages, including:
Benchmarkings provide several benefits to companies, including:
While all personnel involved in the capital project development process will benefit from a benchmarking, we expect project engineers and business managers to benefit most.
IPA believes the best way to assess the effectiveness of a project system is to develop a database of projects to compare your company’s actual project results and practices with a crosscutting sample of industry projects. During an orientation session with the personnel that will be involved in the study, a sample of 20 to 25 projects of any type (add-on, expansion, process modifications, etc.) from the past 6 to 8 years will be selected. It is desirable to collect data on a few (three to five) ongoing projects to ensure the sample reflects the current project system.
Face-to-face interviews with team members from each project in the sample are then held to ensure the accuracy of the data. Typically these interviews last roughly 4 hours. Follow-up questions will be answered via telephone or e-mail.
IPA will prepare a written draft report about the analysis and recommendations. Presentations of the results will be prepared and delivered: one to the assembled project teams and one to the benchmarking team (and other possible groups to be determined).