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 conducted 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:

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

(RT-DCC-07, in press)

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. The figure 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, in press).

Reference: (FR-DCC-07)

3 : Identifying management processes that affect Project Capital Efficiency

The research team identified 28 management processes that affect Project Capital Efficiency.

The team organized these management processes into two categories and four groups, shown in the figure below. Assessment of these management processes should be conducted during the business planning and feasibility phases of capital projects (FR-DCC-07, in press).

Reference: (FR-DCC-07)

4 : Developing the Project Capital Efficiency Scorecard

To assess the level of implementation of the 28 management processes that affect Project Capital Efficiency, RT-DCC-07 is developing the Project Capital Efficiency Scorecard.

As the figure shows, the scorecard provides an overall capital efficiency score for the project. It also allows the business and project team to review individual management process scores to identify strengths and gaps (FR-DCC-07, in press).

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

Key Performance Indicators


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


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