The objective of IPA’s Business Front-End Loading (Business FEL) tool is to help teams determine the “right” project to meet that need. The "right" project is one that best meets the business needs and meets or exceeds expected financial performance. The "right" project also provides an asset that fits the business strategy.
The Business FEL Index is normally measured at the end of Front-End Loading (FEL) 2 (Gate 2). However, this index can be used as a framework to quantitatively benchmark the processes and deliverables associated with early project planning. Large and complex investments typically apply the tool first at the end of FEL 1. In fact, our clients often find great value from a Business FEL analysis in combination with a Pacesetter Analysis.
If a project or company project system Closeout Analysis is done, Business FEL can be performed retrospectively either to a project or a group of projects, the latter case comprising a Business FEL Benchmarking analysis.
IPA's Business FEL tool assesses the level of definition of a number of critical items that are used to determine what, if any, asset should be built to meet a particular business need. To do so, the Business FEL Index evaluates three aspects of a project:
Business FEL analyses benefit project teams and companie as they help companies select the best project opportunities to move forward into process design. With limited project resources available and the constant need to gain competitive advantages, companies should be focused on defining those projects that have the highest likelihood of business success. By applying the Business FEL tool, your company can find out what the business and early engineering risks are so that management can decide whether to proceed―and how to proceed―with further study of the candidate project.
To gather the necessary data and information for the analysis, an IPA Project Analyst will meet face-to-face with project team members. The project team members interviewed usually include, as relevant, the project manager, the process and lead design engineers, the cost estimator, the cost and scheduling engineer, and research and development, operations, maintenance, and business representatives. Data are gathered by using a standard IPA workbook involving several major components, including general information (project location, type, size, etc.), technology (level of technical innovation), and project management (contracting strategy, team integration, etc.). In addition, specific information on the project’s business planning and deliverables, business/engineering interface, and conceptual engineering and planning deliverables is collected.
IPA delivers a report detailing the results of the Business FEL analysis, including the Business FEL Index rating of Best, Good, Fair, or Poor and the corresponding prediction for business success in terms of the expected level of deviation from planned net present value (NPV). We also provide data showing which elements within each of the causal factor categories are in need of improvement or present the greatest risks. The IPA report provides conclusions from the analysis and recommendations on what specific actions the business leadership or project team can take, if any, to achieve the best chances of business success.