Capital projects research on the topics of owner procurement, engineering lead competency, and the perils of pursuing schedule-driven projects are among those set for presentation at the 2018 meeting of the Industry Benchmarking Consortium (IBC), March 19-22, in Northern Virginia. In addition, quantitative research underpinning the key themes in IPA’s latest book, Leading Complex Projects, by Edward Merrow and Neeraj Nandurkikar, will be discussed at IBC 2018.
The IBC, a premiere group of the world’s leading industrial companies in the processing, refining, and mining and minerals sectors, meets annually to explore practices for individual companies to improve the competitiveness of their capital projects outcomes. Through benchmarkings of large and site-based systems conducted by IPA during the previous year, IBC member companies are given exclusive insights into how their capital project systems and outcomes stack up against their industry peers with respect to safety, cost, schedule, and operational performance. The 4-day event provides participants insights into the latest capital projects industry trends and performance hurdles. The research relies heavily on project data derived from recent project evaluations combined with IPA’s entire downstream database containing detailed project data from more than 18,000 capital projects.
The entire IBC conference is designed as a working meeting for delegates representing companies’ business and capital project functions. Several client and industry-tailored breakout sessions take place during the meeting. Networking opportunities are hosted as well. “IBC attendees not only assess the strengths and weaknesses of the capital project systems they support, they also are expected to map out a plan for improvement,” said IBC Director Andrew Griffith. Griffith noted that this year’s IBC continues to emphasize business decisions that drive better or worse project performance, owner core competencies, and the burgeoning need companies face in strengthening their site-based systems.
Of key interest to those attending IBC 2018 will be new research and a panel discussion on the role of the owner procurement function. IPA Project Research Division Director Michael McFadden and IPA Research Team Leader Swati Bhat have examined the disconnect in KPIs between procurement and projects personnel and how the role of the procurement function should be integrated into projects. “The procurement function’s ability to add or, conversely, erode project value is significant,” an abstract of the research study states. But “the procurement role on capital projects and how this function is staffed and defining its roles and responsibilities remains an issue.”
Other research studies being presented at IBC 2018 include an examination of what makes a good constructability review and the recent performance and pitfalls owners have experienced in delivering capital projects in India.
The IBC conference is the largest annual event hosted by IPA. A separate conference dedicated to increasing the capital effectiveness of projects in the exploration and production (E&P) industry, the Upstream IBC (UIBC), is held every fall. The IBC and UIBC each have a cost engineering subcommittee that also convenes annually to review updated cost and schedule data and new research to help project organization cost groups prepare more reliable project estimates.
Research and Presentation Summaries
Abstracts for the research studies and presentations mentioned above follow.
Competency Series: The Engineering Leader
Over the last two years, IPA has revealed how an individual’s specific attributes can facilitate success in various roles on a project team. IPA has shown, quantitatively, how these attributes can be linked to success. The first competency study completed in 2016 focused on the project manager. In 2017, construction manager competency was examined. The next function in the project team competency study series is the engineering lead. While past research set the framework for this study, the attributes and measures of success for engineering leads are bound to be unique to this critical team function.
Understanding the Owner’s Role in Procurement
The procurement function, in one way or another, influences the spending of nearly every dollar of a project whether it is the engineering, procurement, and construction (EPC) services or all materials associated with the project. This study looks into the different models the capital projects industry follows in obtaining procurement services and the pros and cons of each model.
Why Do We Drive Schedules?
As a projects community, IBC members drive schedule as the most important priority for major projects over a third of the time. We know from observation, common sense, and systematic study that schedule‑driven projects are much harder to deliver successfully than their cost-driven counterparts. This study dissects schedule-driven projects to understand exactly why schedule was deemed most important and by whom.
What Makes a Good Constructability Review?
IPA data show that about 60 percent of large capital projects conduct Constructability Reviews during Front-End Loading (FEL) and that the practice is correlated with better project performance. But IPA also sees a wide variation in how this practice is actually implemented. This study addresses what the objectives of a Constructability Review are as well as industry Best Practices for conducting effective Constructability Reviews.
The Role of the Project Management Office in Site Projects
IPA has long recognized different ways sites use central resources and different ways central project groups engage with sites. This study will attempt to define degrees of centralization and tradeoffs inherent in different approaches. We will investigate where central and site organizations should come together to optimize resources—in terms of personnel and tools/processes—to deliver more successful projects across the project organization.
Executing Projects in India: Pitfalls and Challenges Ahead
Project dynamics in India are changing. The Indian economy is expected to grow more than 7 percent in 2018, despite recent hurdles such as demonetization of higher value currency notes and the introduction of the countrywide Goods and Services Tax. In the near term, international companies are planning a number of capital projects in India. In this presentation, IPA will review the recent performance of Indian projects, compare that performance to global projects, and highlight challenges for the current round of projects in India.
Leading Complex Projects
In groundbreaking research that studied hundreds of project leaders, IPA Founder and President Ed Merrow and IPA Oil and Gas Practice Director Neeraj Nandurdikar reveal the personalities, habits, behaviors, and common tasks of the most effective and successful project leaders as defined by the track record of their projects. The research statistically links these habits, personalities, and tasks to various project outcomes and recommends an approach to selecting leaders with specific characteristics to increase the chances of a successful project delivery. The research is the basis of IPA’s latest book, Leading Complex Projects (Wiley, 2018) due out in May, on what it takes to deliver promised value in capital projects.