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Capital Efficiency Scorecard for Downstream and Chemicals Projects

RT-DCC-07 Topic Summary
RT DCC 07

Overview

Strategic alignment between business and project teams improves project performance and capital efficiency. RT-DCC-07 developed a Project Capital Efficiency Scorecard to assess the level of implementation of the management processes that affect project capital efficiency. The team accomplished this by researching five steps:

  1. Define project capital efficiency and pinpoint capital efficiency key improvement areas.
  2. Identify the management processes that affect project capital efficiency.
  3. Develop descriptions and assessment questions for these management processes.
  4. Assess the relative importance of each management process and its respective assessment questions.
  5. Develop the Project Capital Efficiency Scorecard.
     

The team identified 28 management processes that, if implemented effectively, improve Project Capital Efficiency. The team then used surveys to identify the relative importance of these management processes and developed a scoring method to create a scorecard. The resulting Project Capital Efficiency Scorecard can be used to assess the implementation level of these 28 management processes and produce a Project Capital Efficiency score. It will also provide individual scores at the management process level, so the business team and the project team can capture strengths and gaps in their collaborations. By using the Project Capital Efficiency to assess these management processes and address gaps, business teams and project teams can achieve strategic alignment when they develop competitive capital projects and optimize the return on investment.

Key Findings and Implementation Tools

1 : Defining project capital efficiency

RT-DCC-07 defined Project Capital Efficiency (RT-DCC-07, p. 6):

“The measure of an organization’s ability to define, develop, and manage a competitive project that optimizes the return on investment over its lifecycle.”

 

Reference: (FR-DCC-07)

2 : Identifying key improvement areas for capital efficiency

The research team identified four capital efficiency key improvement areas: Investment, Returns, Development Duration, and Operation Duration. Figure 2 shows elements of these areas and how they trend.

If implementing a management process leads to a performance improvement in one of these areas or sub-areas, it can be concluded that this process affects Project Capital Efficiency (FR-DCC-07, p. 8).

Reference: (FR-DCC-07)

3 : Identifying management processes that affect project capital efficiency

RT-DCC-07 identified 28 management processes that affect Project Capital Efficiency. Then the research team organized these management processes into two categories and four groups, shown in Table 1 below. Business and project teams should assess these management processes during the business planning and feasibility phases of capital projects (FR-DCC-07, p. 10).

Reference: (FR-DCC-07)

4 : Developing the Project Capital Efficiency Scorecard

RT-DCC-07 developed the Project Capital Efficiency Scorecard to assess the level of implementation for 28 management processes that affect Project Capital Efficiency. As Figure 20 shows below, the scorecard calculates an overall capital efficiency score for the project. It also offers individual management process scores, which enable business and project teams to align to identify strengths and gaps (FR-DCC-07, p. 31).

Reference: (FR-DCC-07)
RT-DCC-07

Key Performance Indicators

Research Publications

Development of a Project Capital Efficiency Scorecard: Strategic Business-project Alignment in Downstream and Chemicals Projects - FR-DCC-07

Publication Date: 03/2022 Type: Final Report Pages: 88 Status: Tool

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Presentations from CII Events

Session - Driving Project Capital Efficiency: Strategic Alignment for Competitive Investment Decision and Effective Project Delivery

Publication Date: 08/2021 Presenter: Number of Slides: 34 Event Code: JC21

Tags

Knowledge Areas:
Business and Project Processes
Project Phase:
Feasibility
Project Function/Role:
Architects & Engineering, Business Development & Proposals, Commissioning & Startup, Construction, External Stakeholders, Health, Safety & Environmental, Operations & Maintenance, Procurement & Contracts, Project Business Sponsor, Project Controls, Project Management, Quality Management, Risk Management, SBU/Corporate Functions
Industry Group:
Heavy Industrial, Light Industrial
Regions:
Africa – South Africa, Asia – China, India, Southeast Asia, Australia, Europe – Scandinavia, Russia, Middle East, North America – USA, Canada, Mexico, South America – Central America, Brazil
10-10 input Metrics:
Organizing, Planning

Keywords

Project Capital Efficiency, Management Process, Business Team, Project Team, Strategic Alignment, Management Process Implementation, Key Improvement Areas, Business Planning, Business-Project Interface, Capital Investment/CAPEX, Corporate Capital Management, Capital Project Deployment, RTDCC07, DCC-07

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