PDRI Webinar Slides

WEBINAR

Achieve Capital Project Success

with Effective Front End Planning

June, 2015

Today’s Presenter

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Sara DeanFounder & Principal Consultant

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We implement front end

planning solutions that

dramatically improve

performance in capital

projects.

Webinar Objectives

• Relationship between front end planning and project

performance

• Introduction to the Project Definition Rating Index

(PDRI)

• How can you take advantage of PDRI in your

organisation?

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How does improved scope definition

deliver increased project performance?

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What is the leading cause of

capital project cost and

schedule overruns?

Poor scope definition

Front End Planning

Achieving sufficient scope definition to address risk and make a decision on committing resources to maximise the potential for project success.

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Simply, Front End Planning Is

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Front end

planning

Right project

Right product

Right way

Scope Definition:

Documenting the scope of work into an organised plan

Reasons for Poor Scope Definition

1. Pressure to get product to market faster

2. Restricting key resource involvement

3. Lack of in-house design/planning

capability

4. Overly optimistic leadership

5. Financial pressure to minimise planning

costs

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The Question

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If we had done a better job of scope definition, would we have improved

the performance of the project?

Cost-Influence Diagram

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Critical Success Factors

Defined front end planning process

Scope definition tools

Existing conditions definition

Contracting strategy

Alignment

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How do we put this into practice?

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Project Definition Rating Index

A methodology to measure the

level of scope definition

– Comprehensive review

– Identify gaps

– Take appropriate action

– Reduce risk in front end planning

Origin of PDRI

• Consortium of 140+ member companies

– Owners, engineering/contractors, suppliers

– Public & private sector

• Renowned for developing capital project

best practices

• One of the most successful is the

Project Definition Rating Index (PDRI)

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PDRI in Action

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Why is PDRI Critical?

• Improves capital project performance

– Benchmarked on over $96B in projects

• Increases stakeholder alignment

• Provides transparency on risk

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Cost savings of 6 – 25%

Schedule reductions of 6 – 17%

Application of PDRI

1 2 3

Early

Review

2i

Final

Review

Project Templates

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Infrastructure

Projects

Building

Projects

Industrial

Projects

• Greenfield & brownfield projects

• Small (less than $10M), large & mega projects

Structure of PDRI - Industrial

Basis of Project

Decision50%Basis of Design

42%

Execution

Approach8%

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Manufacturing Objectives

Business Objectives

Basic Data R&D

Project Scope

Value Engineering

Site Information

Process/Mechanical

Equipment Scope

Civil, Structural & Architectural

Infrastructure

Instrument & Electrical

Procurement Strategy

Deliverables

Project Controls

Project Execution Plan

Recommended Participants

• PDRI Facilitator

• Project sponsor

• Project manager

• Engineering design reps

• Key discipline leads

• Maintenance & Operations reps

• Procurement

• Project controls (cost, schedule and risk)

• Regulatory

• Environmental

• Construction manager

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Target Scores

PDRI 1 PDRI 2 PDRI 2i PDRI 3

Feasibility Concept Detailed Scope

(intermediate)

Detailed Scope

550 – 800 450 – 600 300 – 450 150 - 250

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Evolution of PDRI

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PDRI Spreadsheet

Paper Checklist

Carve for PDRI

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for Projects

Maximise the value of PDRI

for all project stakeholders

for Portfolios

Effective risk management

in front end planning

Implement a repeatable PDRI process

for PDRI

Fit-for-purpose Project Templates

Configuration makes project templates

fit-for-purpose to your organisation

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Business

units

Polices &

procedures

Gate

deliverables

Regulatory

requirements

Industry

terminology

Language

translation

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Project Template Configuration

Impact on Front End Planning

• PDRI is a proven methodology to improve scope

definition

– Improves project performance (cost, schedule, change

orders)

– Increases stakeholder alignment

– Transparency on risk

• Incorporates ALL of the critical success factors including

– Assessment of existing conditions

– Contracting strategy

• Supports continuous improvement in front end planning

26for PDRI

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Where do we start?

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120-day roadmap to

success with PDRI

Evaluate PDRI

Try it on a cross-section of projects

Initiate using a structured proof of concept

Achieve a visible success story

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Preparing

Initiating

Growing

Establishing

Benchmark

NeedsAnalysis

Evaluate change areas

Introduction of practice in a

proof of concept

Expansion of practice beyond

proof of concept

Marketing new process to

broad organisation

Initiating use of PDRI

Success Story120-day roadmap

Case Study – Major North American City

CONFIDENTIAL 30

Objective

• Demonstrate applicability of PDRI to

front end planning for the City’s major

capital projects

Scope

• Conduct multiple PDRI sessions

• Building & industrial

• Early review & final review

Success Criteria

• Deliver immediate value to each project

• Identify elements posing the greatest

risk to the overall capital program

Benefits of the 120-day Program

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Success StoryShowcase results and acquire

support for expansion of the practice

EducationPurpose-built training for all

impacted stakeholder groups

Immediate Project ResultsBetter scope definitionCost & schedule certainty

Team Alignment

Implementation RoadmapProven strategy to implement

change in process

A repeatable process based on best practices

Summary

• The level of scope definition is the greatest driver of cost and

schedule certainty

• Project outcomes is most easily influenced in front end

planning

• Project Definition Rating Index (PDRI) methodology

• The most successful open industry standard to improve scope definition

• Start realising the benefits of improved scope definition today

• Engage the support of Valency - PDRI implementation specialists

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How does improved scope definition

deliver increased project performance?

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Get started with PDRI today

1300 45 36 24

[email protected]

www.oliveprojects.com.au