Four Common Sources Of Upside In Capital Projects
Based on work improving over 30 large capital projects, these are the most common types of opportunities realized:
1) Improved Design Decisions
A physical change can be made to the design to yield more value while maintaining project objectives.
E.g. “An alternate pump selection enables a smaller pipeline size.”
56% of value realized
2) Improved Execution Strategy
A change can be made to the execution strategy of the project to drive more value.
E.g. “The resourcing peak can be reduced by re-sequencing these construction scopes.”
18% of value realized
3) Improved Estimate Accuracy
A numerical change can be made to the estimated economics of a design.
E.g. “New data shows that a lower unit cost for steel can be confidently applied.”
14% of value realized
4) Downsides Detected (and Mitigated or Offset Before it’s too Late)
An assumption in the project case is currently better than can be expected.
E.g. “The estimate includes fewer expansion joints than the latest study shows.”
12% of value realized
*Data from 35 Energy and Mining projects, 2009-2020
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