A prominent airport, with a clear commitment to continuous project improvement, experienced significant declines in passenger volumes, prompting leadership to reassess the company’s business strategy. The capital project portfolio was adjusted accordingly, resulting in a significant decrease in projected capital spend for at least the next 2 years. As part of this client’s regular engagement with IPA, the airport had completed a benchmarking and site staffing analysis of capital project resources the previous year. This particular staffing analysis had revealed significant redundancies in staffing for certain functions, driven largely by the organization’s complex structure, which limited its ability to use resources across the portfolio efficiently. The airport was in the process of restructuring the project organization to address this issue when confirmation came that capital spending was set to decrease. The client knew this would affect resource levels, but how big was the effect? How could they realign the organization to meet business priorities, without cutting too much? The client needed answers, and it needed them fast.
The client approached IPA’s EMEA regional office to conduct a site staffing analysis to reflect the downsized capital project portfolio. The objective of the analysis was to determine the optimal number of project resources needed to plan and execute the portfolio, without putting project performance or continuous improvement initiatives at risk. And the timing was urgent. As the client had completed a similar analysis the previous year, IPA was able to optimize the data collection and assessment process to deliver an update quickly.
Based on planned capital portfolio characteristics for 2020 and 2021 as well as known information about the client’s project practices and staffing strategies, IPA completed a quantitative site staffing analysis to examine resource needs for 15 key functions integral to project development:
- Capital projects director
- Project management
- Cost estimating
- Cost control
- Construction management
- Contracts administration
- Commissioning & startup engineering
Individual statistical models, developed using staffing data from over 100 project management organizations across a wide variety of industrial sectors, were used for each functional group to determine the optimal levels of owner and third-party resources.
Within a 2-week turnaround time, the assessment was complete and a short, easy-to-digest slide pack summarizing the results was distributed to the client. The results showed that, although the total capital spend of the portfolio had decreased significantly, optimal staffing levels only decreased slightly based on future portfolio characteristics. To shape the new portfolio, the client had gone through a much more rigorous portfolio management process, resulting in a smaller number of higher value projects. The shift from many small projects to fewer larger projects meant resources would not be able work on as many projects simultaneously as before. In other words, resource demands on a per project basis were actually higher. These findings demonstrate the importance of ensuring resource levels are the right fit for your portfolio and the potential danger of assuming a direct linear relationship between total capital spend and resource needs. While cost‑cutting measures will always lead companies to look to resource cuts, cut too much and you run the risk of undermining other organizational goals, like continuous improvement and project excellence.
*Case study by Katya Petrochenkov, IPA Senior Research Analyst
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