ARC's Russ Novak Project Performance Management Presentation @ ARC Industry Forum 2010


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ARC's Russ Novak Project Performance Management Presentation @ ARC Industry Forum 2010 in Orlando, FL.
Project Performance Management Present and Future
Why Rethink Project Performance Management
Owner’s Perspective of Project Performance Issues
Evolution of Project Performance Management
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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ARC's Russ Novak Project Performance Management Presentation @ ARC Industry Forum 2010

  1. 1. Project Performance ManagementPresent and FutureRuss NovakDirector of ConsultingARC Advisory
  2. 2. 2© ARC Advisory GroupAgenda Why Rethink Project Performance Management Owner’s Perspective of Project Performance Issues Evolution of Project Performance Management
  3. 3. 3© ARC Advisory GroupRethinking Project Performance ManagementPlan Design Procure Build Operate MaintainRetire &RecycleProject PerformanceManagement (PPM)Asset PerformanceManagement (APM)ProjectPerformanceManagement(PPM)AssetPerformanceManagement(APM)Asset & ProjectPortfolioManagement(APPM)HandoverModificationRequestsFundedProjectsNewFacilityRequests
  4. 4. 4© ARC Advisory GroupWhy 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
  5. 5. 5© ARC Advisory GroupResearch Results: Owner Perceptions onProject Performance Management IssuesHow do youaccomplishHandover?What about JVsand 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 andEngineering Systems?Do you use Portals for project status reporting?What about asset-centric information management?
  6. 6. 6© ARC Advisory GroupGovernance and Process Assurance Need well defined & governed CapEx deliveryprocesses Adoption by Top Tier Performers Internal or External Controls & Metrics Corporate/Enterprise versus Project/EngineeringWorkflow Perspectives• Enterprise Issues Trump the Engineering WorkflowAnalysis & Lead to Corporate IT Involvement• Continual Improvement
  7. 7. 7© ARC Advisory GroupProject Performance Management:O/O Activities Require Effective IT StrategyPortfolioApprovalOperatingFacilityProcessDesignHandoverCommissionBudgetingEstimatingConstructProjectMgmtFinanceStartUpSchedulingMgmtReportingProcureEvaluateInspectionEngineeringFEEDPermitsTraining
  8. 8. 8© ARC Advisory GroupProject Performance Management:Reality, Constraints & Obstacles Different Worlds: O/Os don’t fully understand the informationrequirements 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 withIT 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 projectexecution Not fully integrated with Portfolio Performance
  9. 9. 9© ARC Advisory GroupProject Performance Interdependencywith Portfolio AssumptionsSPECIFIEDBenefits, Risk,ResourcesProject Approval is based uponspecific assumed levels of Benefits,Risk, and Resources.Project Performance Managementfor all projects must besynchronized, standardized, andupdate the Portfolio PerformanceManagement base cases.Portfolio Projects
  10. 10. 10© ARC Advisory GroupEvolution of Project PerformanceManagement Evolution of Project Performance Management isbeing driven in part by … Adoption of Portfolio Performance Management• Synchronizing corporate business objectives with selectedprojects• 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)
  11. 11. 11© ARC Advisory GroupProject 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 byemergence of knowledge worker and IT implementations Engineering Tools evolve with inherent IT capabilities for bothProject and Operations domains Technology enables automation of IT strategy for PPM IT and enterprise systems are totally in sync with the entireproject 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 andMaintain phases Central governance and process assurance programs mature,but continue to improve
  12. 12. 12© ARC Advisory GroupTakeaways ARC continues to expand its ALM research effortsin the Project Performance Management space. Project Performance Management is evolving andwill exhibit tighter integration with PortfolioPerformance Management.
  13. 13. 13© ARC Advisory GroupThank You.For more information, contact the author or visit our web pages