project performance management
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TRANSCRIPT
Project Performance Management
Present and Future
Russ Novak
Director of Consulting
ARC Advisory Group
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Agenda
Why Rethink Project Performance Management
Owner’s Perspective of Project Performance Issues
Evolution of Project Performance Management
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Rethinking Project Performance Management
Plan Design Procure Build Operate MaintainRetire & Recycle
Project Performance Management (PPM)
Asset Performance Management (APM)
Project PerformanceManagement
(PPM)
Asset PerformanceManagement
(APM)
Asset & Project
PortfolioManagement
(APPM)
Handover
ModificationRequests
FundedProjects
New Facility
Requests
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Why Rethink Asset Lifecycle Management?
Riskier Business Opportunities
More Mandatory Investments
Limited Capital, Tough Capital Markets
Bigger, More Complex Projects
Global Projects, Global Project Teams
Escalating Labor and Material Costs
Poor Asset Utilization, High O&M Costs
Aging Workforce, Lack of Skilled Workers
Legacy IT Systems Constrain Improvement
Easy IT solutions can help
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Research Results: Owner Perceptions on Project Performance Management Issues
How do you accomplish Handover?
What about JVs and governance?
How does IT play a role in Governance?
Do you use GRC software?
Document management?
How do you approach governance and process assurance?
How well do you integrate Project and Engineering Systems?
Do you use Portals for project status reporting?
What about asset-centric information management?
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Governance and Process Assurance
Need well defined & governed CapEx delivery processes
Adoption by Top Tier Performers
Internal or External Controls & Metrics
Corporate/Enterprise versus Project/Engineering Workflow Perspectives
• Enterprise Issues Trump the Engineering Workflow Analysis & Lead to Corporate IT Involvement
• Continual Improvement
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Project Performance Management: O/O Activities Require Effective IT Strategy
PortfolioApproval
OperatingFacility
Process Design
Handover
Commission
Budgeting
Estimating
Construct
Project Mgmt
Finance
StartUp
Scheduling
Mgmt Reporting
Procure
Evaluate
InspectionEngineering
FEED
Permits
Training
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Project Performance Management: Reality, Constraints & Obstacles
Different Worlds: O/Os don’t fully understand the information requirements of E&D, EPCs, or Project Mgmt. … and vice-versa
IT Gaps: Asset-centric Approach vs. “Silos”
Interdependency issue is underestimated
“Workarounds” distort reliability of information
Increase in Size/Complexity/Costs: =>Unacceptable Risks with IT legacy systems
Failure to follow Best Practices/Governance omissions
Lean/Aging workforce (information transfer & retention)
Engineering Tools originally designed for E&D, not O/O
Evolution in format of information: Drawings --> Databases
Initial development of IT systems not focused on project execution
Not fully integrated with Portfolio Performance
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Project Performance Interdependency with Portfolio Assumptions
SPECIFIED Benefits, Risk,
Resources
Project Approval is based upon specific assumed levels of Benefits,
Risk, and Resources.
Project Performance Management for all projects must be
synchronized, standardized, and update the Portfolio Performance
Management base cases.
Portfolio Projects
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Evolution of Project Performance Management
Evolution of Project Performance Management is being driven in part by …
Adoption of Portfolio Performance Management
• Synchronizing corporate business objectives with selected projects
• Prioritization/ranking/selection of competing projects
• Competition for investment, people, resources,
• Alignment with strategic initiatives (sustainability, etc)
• Lifecycle of “project” becomes lifecycle of asset
• Increased emphasis of Risk Analysis
• Trend of executive access via dashboards, etc.
• Stakeholder community expanded (marketing, financial, sustainability, compliance, L-R planning)
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Project Performance Management: The Future - Optimal Case
O/Os fully understand the asset information needs of E&D, EPCs, and Project Management …and vice versa
Lean/Aging workforce issues resolved/compensated by emergence of knowledge worker and IT implementations
Engineering Tools evolve with inherent IT capabilities for both Project and Operations domains
Technology enables automation of IT strategy for PPM
IT and enterprise systems are totally in sync with the entire project space and portfolio management processes
All phases of project performance management is understood, accepted, and incorporated into normal business workflows
Seamless transfer of Project information to Operate and Maintain phases
Central governance and process assurance programs mature, but continue to improve
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Takeaways
ARC continues to expand its ALM research efforts in the Project Performance Management space.
Project Performance Management is evolving and will exhibit tighter integration with Portfolio Performance Management.
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Thank You.For more information, contact the author at
[email protected] or visit our web pages atwww.arcweb.com