Project Management

Prior and Proper Project Planning for Profitability

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Related Companies

There are some proven methods and approaches to reducing capital estimate uncertainties. Companies including Kuwait National Petroleum Co (KNPC), ConocoPhillips, and DuPont have demonstrated that front-end loading project scope to the estimating function coupled with the use of advanced model-based estimating approaches can significantly reduce variability and increase precision of estimates prior to authorizationfor-expenditure (AFE) on a project. By extracting project scope from the process simulation model as early as possible, the conceptual estimate will be more reliable.

Also, model-based estimating systems use first principle engineering models to build up scope without enumerating bulks or using inherently inaccurate factor-based approaches. Factor-based approaches do not work because they assume straight-line sizing relationships, while sizing of major equipment is usually discontinuous, and because their predictive ability falls apart when extrapolating beyond known cost numbers. ConocoPhillips in particular documented its experience in reduced estimating variability from 35 per cent to 12 per cent over a two-year period after adopting this approach, during the FEED phase of its projects, prior to AFE.

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Just-in-Time Project Team Training

A second key area is rapid ramp-up and training of project teams to be effective in the use of mission-critical technical software. A project manager is almost always given an assigned project team, sometimes split over several geographies (for instance, India, Philippines, London and Houston) and an extremely difficult schedule.

To meet the schedule, the project manager needs the team to be up and running almost immediately. The project manager’s dilemma is to select the best fit-for-purpose software tools to employ during a project, and at the same time mobilize the available project team, often geographically distributed. This requires key project team members to be fully productive on the key software tools immediately, or face getting behind schedule.

‘Just-in-time’ eLearning resources available within the process modeling software
‘Just-in-time’ eLearning resources available within the process modeling software
(Picture: Aspen Technology)

Traditional classroom training methods are inadequate to support these project managers’ requirements to meet schedules. AspenTech has been aggressively developing a rich set of ‘just-in-time’ online training resources to satisfy these needs. These include computerbased-training (CBT) courseware, available on-demand through conceptual modeling software tools, together with written tutorials, video tutorials, sample models and functionspecific video on usage. Use of these ondemand tools has been growing exponentially since their introduction 12 months ago. Preliminary data shows a strong relationship between use of on-demand training resources and engineers’ productivity.

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