Turning capital project and business data into valuable insights for performance improvement.

 

IPA benchmarks key elements of capital effectiveness, enabling companies to improve the performance of their capital projects, systems, and targeted functional activities.

What We Do

It is IPA’s unique competence to provide risk analysis and benchmarking services for capital projects and capital project systems based on analysis of industry data collected directly from owner organizations. Since 1987, IPA has studied the drivers of capital effectiveness, and we transfer that knowledge to our clients to improve the performance of their capital projects, systems, and targeted functional activities.

By collecting capital project outcomes for safety, cost, schedule, and functionality and examining drivers of project performance such as team effectiveness, Front-End Loading (FEL), and project controls, IPA establishes project benchmarks and compares them to industry averages. The nature of the comparisons enables teams to understand specific project risk and the likelihood of project cost overruns, schedule slip, and production shortfalls.

A database with inputs from more than 17,000 capital projects representative of the entire spectrum of extraction, manufacturing, refining, and processing industries enables IPA to deliver holistic and unbiased benchmarking and project risk evaluation services.

Why Benchmarking Matters. Quantitative benchmarking is used to determine the competitiveness of a company’s capital project performance and to help identify the strengths and weaknesses of the company’s capital project system practices. By periodically re-benchmarking projects and project systems, IPA helps companies understand whether their system performance has changed over time.

The breadth of the capital project and system data collected by IPA allows companies to also obtain specialized performance benchmarks, such as in organizational effectiveness and cost estimating, from an objective and trusted source of capital effectiveness knowledge.

Our Approach

Detailed data are the starting point for IPA's methodology. IPA’s Project Evaluation System (PES®) is quantitative, empirical, and objective in its approach, and provides an industry-wide benchmark for assessing and comparing project elements and results. Empiricism is necessary because project systems are so complex that it is impossible to understand every facet of a system on first principles. However, project histories that are contained in the databases act as clear guides to understanding and quantifying the relationship between project drivers and project outcomes.

IPA collects project information in interviews 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 the use of a standard IPA workbook involving the following major components:

  • General information (project location, type, size)
  • Technology (level of technical innovation)
  • Project management (contracting strategy, team integration)
  • Cost (estimated and actual costs, contingency)
  • Schedule (planned and actual by phase, changes)
  • Operational performance (planned and actual)
  • Project definition (site-specific factors, project execution planning, completed engineering)
  • Value Improving Practices (VIPs) (as applicable)

The underlying premise behind the PES® is that the outcomes of projects can be predicted by understanding the historical relationship between project drivers (characteristics, technology, and project management practices) and the project's final outcomes.

Capital Project Systems

Benchmarking a selected number of projects within a client’s portfolio allows the understanding of the effectiveness of the allocation of capital in addition to highlighting the opportunities for system improvements. The sample of projects for the system benchmarking is selected based the results of an evaluation of the company or business division strategy and organization, policies, work processes, and project estimating and accounting functions.

Clients recur to multi-project evaluation to better understand their system performance, set up a baseline for system performance measuring, get comparison with competitors and the industry, and draw the path forward to continuous improvements. IPA offers a full suite of services to support the individuals responsible for managing a company’s capital project system:

Quantitative Benchmarking
The first step toward improvement is establishing current performance. A Quantitative Benchmarking determines the project system’s competitive position along with its strengths and weaknesses. IPA can periodically re-benchmark the project system to understand whether changes made to address the weaknesses have actually resulted in better performance.

Re-engineering
IPA can help a company re-engineer its project system work process and project organization. The basis of the work is IPA research on Best Practices for each project phase, Organizational Assessment, and gatekeeping.

Organizational Assessment
IPA’s Organizational Assessment tool can help your project organization more effectively develop and implement its capital projects by examining your personnel, work process, and organizational structure to ensure Best Practices are being used.

Consortia & Committees
Both the IBC and UIBC provide independent forums for each participating company to view its performance against other companies' performance. The consortia also highlight Best Practices used and reinforce their use to improve capital effectiveness. The CEC and UCEC aim to improve business results by enhancing the project controls function through sharing practices and providing data for research and metrics.

Individual Projects

Using our proprietary Project Evaluation System (PES®), IPA performs capital project risk and benchmarking evaluations at every stage in the project life cycle. From early business planning to operational performance reviews, the PES product suite serves our clients’ needs by transferring our empirically-based knowledge of the drivers of capital project success and failure to a specific project context. Although the methodology employed for each product is the same, the timing and objective of each evaluation is different.

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An IPA Shaping Study focuses on activities, deliverables, and practices associated with the earliest stages of megaproject development. The two primary goals of the shaping process are to stabilize the project environment and to configure the project so it is profitable for all stakeholder-investors. IPA research has identified a series of steps the shaping process must follow to optimize the capital investment. Applied to a specific megaproject, an IPA Shaping Study reviews progress made in:

  • Defining the project context
  • Assessing the potential value
  • Reviewing the comparative advantage
  • Identifying and aligning all stakeholders
  • Evaluating issues pertaining to partner relationships

An IPA Shaping Study reviews the activities completed in shaping, basic data, and overall project development and identifies gaps in the process that must be addressed to minimize risk of project failure.


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A PES® Business Front-End Loading (BFEL) analysis is a quantitative assessment of a project’s business readiness factors (inputs) and identifies how those inputs pose risk to planned business outcomes (outputs). The BFEL assessment was developed from historical data correlating business success as measured by NPV with factors associated with early project processes and deliverables.

Key factors examined in a BFEL evaluation fall into these categories:

  • Business planning process and deliverables
  • The business/engineering interface
  • Conceptual engineering/facilities planning process and deliverables

The BFEL quantifies key risk factors for individual projects early in the project life. Specifically, the BFEL is as an indicator of the likely deviation from the project’s expected overall financial performance. Any gaps from what is historically considered the best business and early project planning position are pointed out and serve as the basis for recommendations. The business can then act to reduce uncertainty or formulate strategies to mitigate and manage those risks.


A Business and Engineering Alignment Meeting (BEAM) is the best available tool for improving clarity and gaining alignment of business and project objectives. IPA’s BEAM is a facilitated workshop that has been proven to be an effective practice for bringing together business and project teams to form a common understanding of the business needs and the project system’s response to those needs. For optimal results, the BEAM must be completed at the end of FEL 1, or as one of the very first activities in FEL 2. In addition, all stakeholders must be represented by people with the ability to make decisions for their area, and all issues raised during the workshop must be resolved and closed at the conclusion of the session. The product of a BEAM serves as a guide for the project team to make choices about the project design basis during the scoping phase of project development.

This 1-day workshop establishes key elements of project scope in a matrix and facilitates a discussion of the needs and tradeoffs around the quality required of each element in the BEAM matrix with the functional representation in attendance. At the end of the session, the group reaches alignment on the level of quality needed to produce a project that will fit the specific business needs and stay within the parameters of the business case.

If done at the proper time in the project life cycle, with the correct group of individuals for the specific project, and with the correct rigor, the BEAM will assist the project team in completing a project that meets all business requirements for success.


Project Team Optimization System (TeamOp) studies how projects produce, use, and move information from one party to another, a practice that is at the core of effective project development. Breakdown in this flow of information due to staffing gaps, structural issues, or team conflict jeopardizes project success. IPA’s TeamOp is a suite of services designed to help clients establish and strengthen their project teams. As a system, it provides the most comprehensive assessment of the project team, but each service can also be performed independently of the others. These services are available for large projects across all industry sectors.

The components of a TeamOp include:

Team Staffing: Do you have enough of the right owner people to effectively lead and execute your project?
IPA’s team staffing assessment identifies strengths and critical gaps related to staffing a project’s owner management team. This analysis provides quantitative staffing benchmarks for the owner project team across 15 functional families based on project characteristics. Data-driven insights and actionable recommendations are provided to help strengthen the project’s staffing and better set the project up for success.

Team Organizational Structure: Is your owner team organized to maximize effective communication and flow of information?
IPA’s team structure services help project leadership determine the most effective way to organize the owner management team based on the project’s characteristics. Employing our team database and internal expertise, this analysis provides insights and project-specific recommendations to enable effective and proactive decision making with respect to structuring the project team for success.

Team Functionality: Is your team aligned on the critical elements required to effectively define and execute your project?
IPA’s Team Functionality Assessment provides team members with a platform to express and quantify their perceptions of the project’s health as a well-functioning team to achieve what a collective of individuals cannot. Individual responses to a confidential survey are aggregated and compared to Industry to determine how well the project team functions.


IPA’s Front-End Loading (FEL) Workshop stresses the key project factors that drive ultimate project outcomes. Because excellent FEL is essential to project success, IPA offers a workshop that helps project teams improve the project’s business-effectiveness by achieving Best Practical definition at project authorization. The workshop’s primary objectives are to:

  • Clarify business and project objectives
  • Ensure alignment
  • Identify critical interfaces between projects
  • Develop a roadmap to reach Best Practical FEL before authorization

The workshop presents the fundamentals of FEL and brings the generic principles of project management and definition to the project-specific level. To provide project teams with further assistance, the workshop presents tools to improve a project’s FEL.
An FEL Workshop typically takes 2 days including IPA feedback on key project risks and a path forward to close gaps from Best Practice.


An Asset Optimization Workshop (AOW) is a specific product for capital investments in the oil and gas sector. The purpose of this workshop is to promote optimally scoped, functionally aligned, competitive, and business-effective assets. The focus of this workshop is the overall asset—reservoir, wells, and facilities—rather than a specific function. The objectives of the AOW are to:

  • Ensure clarity and alignment around business and project objectives
  • Assess the subsurface appraisal and, using research and predictive tools, quantify the effect of those decisions on asset outcomes
  • Quantify and discuss the functional effect of subsurface work (appraisal and reservoir FEL), especially on the well program
  • Evaluate the robustness of the asset scope using metrics and quantify functional tradeoffs and their implications, if any
  • Provide research around benefits and risks of facility component standardization
  • Quantitatively evaluate team alignment, integration, and functionality
  • Develop a roadmap to ensure Best Practical project definition before FEED
  • Provide an expected industry average duration of FEED for a project with similar characteristics

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A PES® Pacesetter (PAC) project risk evaluation provides insights to the project team and to the business sponsor on the competitiveness of planned outcomes and risks to successful project completion at a critical point in the planning process. A Pacesetter evaluation is performed at approximately the midpoint of the project definition phase of a capital project, also known as Front-End Loading (FEL). The second phase of FEL (FEL 2) begins with a business need and should end with a closed scope of work for the project that meets the business need and gives the corresponding cost and schedule targets. Typically, business decides at the FEL 2 gate whether a project’s business case is robust enough to justify the capital expenditure, and the Pacesetter evaluation identifies risks to inform that decision.

The objectives of IPA’s Pacesetter project risk analysis are:

  • To provide feedback on the project’s status at the mid-point of definition and determine whether the project objectives are clear, the team is well aligned, the scope is closed, and the project is ready to proceed into FEL 3/FEED. In addition, the analysis highlights key activities to be completed during the time remaining prior to sanction to finalize definition and, thereby, minimize risk
  • To assess a project’s estimated cost and schedule competitiveness and production forecast expectations and, in doing so, identify areas of risk
  • To present recommendations for reducing risk and improving performance

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A PES® Prospective (PRO) project risk evaluation provides the project team and the project system gatekeepers insights into the status of project definition and benchmarks for the project cost and schedule targets prior to the start of execution. This analysis measures whether key tasks have been completed prior to full funds authorization to ensure the best likelihood of project success. Outcome benchmarks allow the project team to evaluate how aggressive (or conservative) its goals are and to plan accordingly. In addition, evaluation Prospective evaluation identifies risks to project success and suggested mitigation strategies. As part of the analysis, IPA provides lessons learned from similar projects executed by other companies, which give the project team insights not available from any other source. Typically, the Prospective evaluation is performed just prior to authorization.

The Prospective project risk evaluation is designed to:

  • Measure the level of project planning and team development prior to the start of execution and identify any outstanding risks
  • Assess the project’s planned cost, schedule, safety, and early operability performance
  • Assess the project’s planned execution discipline
  • Identify specific project characteristics that increase or mitigate risk in achieving project objectives
  • Provide the project team and project authorization authorities with key recommendations before the project proceeds into execution

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A PES® Construction Readiness Assessment (CRA) provides an independent check to ensure projects are ready to begin the most expensive phase of capital project development. About 30 percent of capital projects begin field construction too early, and the number is increasing because project teams feel pressure to demonstrate progress by starting field activities as planned. Initiating construction too early results in costly inefficient execution. Very few owner companies have a process to verify that projects are prepared to begin construction.

The CRA is designed to:

  • Provide a quantified assessment of the status of engineering as it relates to the path of construction
  • Measure the status of procurement and its potential effect on construction
  • Assess the overall integration of engineering, procurement, and construction
  • Identify and quantify of gaps in project execution practices
  • Provide recommendations to rapidly close identified shortcomings

A CRA should be scheduled with enough time before the start of substantial construction—that is, before first foundations—so gaps can be closed, which may require delaying the start of construction. This often coincides with the final process hazards analysis (PHA) toward the end of detailed engineering.


A PES® Recovery Analysis is used when an organization finds itself with a capital project in mid-execution that is “off the rails”—experiencing significant cost overruns, schedule slip, and team development issues. A typical recovery analysis provides:

  • A root cause assessment to identify the specific practices that caused the project to run off course, so any lingering issues can be addressed to improve the results for the remainder of project execution
  • An assessment of the project’s current status including the reasonableness of target completion dates and a detailed (forensic) cost evaluation
  • An assessment of the project team’s functionality, organizational structure, and staffing
  • A set of actions, based on benchmarking and root cause analysis, that can be applied to the project to minimize further risk

The objectives of a recovery analysis are to get the project back on track and prevent failure moving forward.


A PES® Production Readiness Assessment (PRA) focuses on activities needed to successfully transition the facilities into to an operating asset that will achieve the approved business objectives.

Based on IPA research into the practices that correlate with shorter startup durations and higher production rates—asset readiness, people readiness, and logistical/support system readiness—the PRA helps minimize risk as project and plant personnel implement commissioning and startup plans.

The content of a PRA includes:

  • Benchmarks for startup duration and early operational performance
  • Assessment of specific practices correlated with startup duration, startup slip, and early operational performance
  • Comparison of production readiness plans with leading industry practices
  • Measurement of progress on over 30 production readiness activities and identification of gaps

The PRA is designed to identify and eliminate gaps in planning for an effective transition to operations.


A PES® Closeout (CLO) evaluation provides the individual project team and the overall project governance organization with an independent evaluation of the project’s actual performance versus plan and versus industry benchmarks for comparable projects. The analysis provides project performance measures for key outcome metrics such as safety, cost, schedule, and early operational performance (as applicable) and assesses how the project practices and execution discipline drove the performance.

The Closeout evaluation is designed to:

  • Provide benchmarks for the project cost, schedule, safety, and early operational bility performance relative to industry norms for comparable projects
  • Measure key project performance drivers at the time of authorization and link those drivers to project outcomes
  • Assess the project execution discipline maintained during engineering, construction, and startup
  • Identify specific project characteristics or events that also influenced project outcomes
  • Provide key project lessons learned and project system recommendations

A Closeout evaluation ultimately answers the question: did the project meet the business objectives?  The deliverable documents the project history and provides key metrics to measure progress in an organization’s drive toward capital efficiency and continuous improvement.


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A PES® Operability Study compares a facility’s production performance in the first year(s) of operation with that of comparable industry facilities. This product can be applied to any type of processing facility, from production attainment of offshore platforms to operational performance of chemical plants. The operability study provides:

  • A benchmark of the technical production as a percentage of nameplate capacity relative to comparable industry projects
  • A benchmark of the market-constrained production as a percentage of nameplate capacity
  • Identification of practices that affected the production performance
  • Root cause analysis on the drivers of below industry average production

Operational performance is on par with cost performance regarding the effect each has on project economics and, thus, should get equal attention. IPA’s Operability Study provides the final metrics for a more complete understanding of project success.

Key Contacts

Rolando Gachter

Rolando Gächter
Regional Director, Asia-Pacific & Australia

 Contact-Me

During his 17+ years at IPA, Rolando has held various roles across the company, including Business Area Manager for both IPA’s Mining, Minerals, and Metals and Exploration and Production business areas. Although he specializes in energy and minerals extraction projects, Rolando has also performed large-scale project system benchmarkings for major oil and natural gas producers and reviewed over 100 major capital projects worldwide in the petroleum exploration and production and mining sectors covering over $5 billion in capital expenditures. He also serves as a Senior Instructor of the IPA Institute and has presented at various conferences and seminars across the globe.

 


nekkhil small

Nekkhil Mishra
Regional Director, Europe, Middle East, Africa, & Russia

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Nekkhil Mishra has been serving as IPA’s Deputy Director of Exploration and Production for the past two years. Since joining IPA in 2007, Mishra has reviewed more than 60 large-scale projects worldwide for major U.S. and international gas exploration companies.

 


astor smallAstor Luft
Regional Director, Latin America

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As Regional Director of IPA's Latin American operations, Astor Luft is responsible for continuing to strengthen IPA’s relationship with global and local clients in the region, with a focus on developing and improving the effectiveness of their capital project systems.

 


Phyllis Kulkarni2Phyllis Kulkarni
Regional Director, North America

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Phyllis Kulkarni oversees IPA’s North American operations, which serves clients in the United States, Canada, and Mexico. Prior to becoming Regional Director, Phyllis served as Manager of Plant-Based Systems. She has been with IPA since 2002.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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