Improving Site-Based Capital Project Systems With Tailored Services

Phyllis Kulkarni

Unfortunately, the performance of many site and sustaining capital project systems is struggling to improve. In fact, many of the systems that Independent Project Analysis (IPA) has benchmarked multiple times over the past decade actually declined in their most recent benchmarkings, suffering a dip both in practices (such as use of project controls and completion of basic engineering) and outcomes (such as cost effectiveness and cost predictability). Each site-based system has a unique set of issues, but the general theme can be summed as: chaos.

Over the past few years, we’ve seen a higher number of sites with dramatic changes, including change in ownership, change in contractor, change in contractor location (e.g., moving from onsite to offsite), wholesale turnover in site leadership, and more. What this turbulence has revealed is that even top performing systems can be quite fragile. Use of Best Practices is sometimes very much driven by specific leaders within the organization—and when those people move on, things can deteriorate quite rapidly. The key conclusion is that the value proposition for the site project organization must continually be refreshed and shared.

Any time significant turnover occurs, the site must revisit the fundamentals to ensure alignment on the use of Best Practices and solid gatekeeping. A robust framework for measuring and reporting Key Performance Indicators such as the Front-End Loading (FEL) Index and cost deviation can help ensure that new contractors and new owner staff adhere to the same set of expectations.

To address this situation and assist sites in rapidly turning things around, IPA offers a number of smaller, tailored services to address specific improvement needs. Some recent examples of work we have completed with sites include:

  • A one-day in-house training session to orient site leadership to gatekeeping Best Practices and what key deliverables to look for when making investment decisions
  • Special studies / reviews to compare new project cost estimates against norms for similar industry projects, to help companies set more competitive estimates at authorization
  • Participation in several internal FEL reviews to offer a cold-eye perspective on whether the site is accurately assessing its level of definition on current small projects and identify gaps that should be closed before authorization

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