Capital Projects - What Every Executive Needs to Know to Avoid Costly Mistakes Make

A real-world framework for driving capital project success
 
Capital Projects provides an empirically-based framework for capital project strategy and implementation, based on the histories of over 20,000 capital projects ranging from $50,000 to $40 billion. Derived from the detailed, carefully normalized database at preeminent project consultancy IPA, this solid framework is applicable to all types of capital investment projects large and small, in any sector, including technology, life sciences, petroleum, consumer products, and more. Although grounded in empirical research and rigorous data analysis, this book is not an academic discussion or a conceptual dissertation; it's a practical, actionable, on-the-ground guide to making your project succeed. Clear discussion tackles the challenges that cause capital projects to fail or underperform, and lays out exactly what it takes to successfully manage a project using real-world methods that apply at any level.
 
Businesses report that 60 percent of their projects fail to meet all business objectives, and IPA's database shows that projects' final average net present value undershoots initial estimates by 28 percent. This book provides concrete, actionable solutions to help you avoid the pitfalls and lead the way toward a more positive outcome.
* Avoid the missteps that make capital projects fail
* Learn the specific practices that drive project success
* Understand what effective capital project management entails
* Discover real-world best practices that generate more value from capital
 
When capital projects fail, it is almost always preventable. Inefficiency, underestimated timelines, and unforeseen costs are the primary weights that drag a project down--and they are all avoidable with good management. Capital Projects gives you the insight and practical tools you need to drive a successful project.

List of contents

Acknowledgments ix
 
1 Falling Short of Expectations: How Executives Struggle to Deliver the Value from Their Capital Projects 1
 
Background and Basis for the Book 5
 
Capital Projects Create Value 6
 
Most Projects Create Less Value Than Expected 7
 
Results Apply to All Types of Projects 7
 
Sources of Value Erosion Are Not Limited to Cost and Schedule Overruns 8
 
How to Deliver the Value Promised 10
 
2 Why the Stage-Gate Process Is the Best Tool Executives Can Use to Get the Most Value from Their Capital Projects 15
 
A Necessary Process 19
 
How Does the Process Work? 20
 
What Is the Role of Executives in the Process? 25
 
Stage-Gates and Executive Control 29
 
3 The Project Frame: Understand the Opportunity before Starting a Project 31
 
Typical Contents of a Project Frame 34
 
Unlock Value by Finding a Better Option 35
 
How to Develop a Project Frame 37
 
Use the Frame for Executive Alignment and Endorsement 45
 
4 The Critical Project Sponsor Role 51
 
Who Is the Project Sponsor? 56
 
Overview of Project Sponsor Role 58
 
Assign a Project Sponsor as the Initial Business Case Is Developed 59
 
Requirements for a Strong Project Sponsor 59
 
Choosing the Right Project Sponsor 69
 
5 The Single Most Important Thing an Executive Can Do to Make Any Capital Project Succeed: Define Clear Objectives 75
 
Business Objectives versus Project Objectives 79
 
Developing Clear Objectives 79
 
Communicating the Objectives 84
 
Prioritizing the Objectives 87
 
6 The Executive's Role in Building and Supporting High-Performing Project Teams 91
 
Executive Leaders Lead 94
 
Invest in a Strong Owner Project Team 96
 
Why You Need a Functionally Integrated Team 97
 
Help the Project Manager Get the Resources for a Functionally Integrated Team 99
 
Do Not Outsource the Owner Team Role 100
 
More Experienced Project Teams Do Better Projects 102
 
Strategies for Coping with Staffing Shortages 102
 
Executives Working Together to Support the Project 104
 
7 Project Definition: The Fundamental Capital Project Concept Every Executive Must Understand 107
 
Strong Project Definition Preserves Value and Produces Better Assets 112
 
Executives Control the Quality of Project Definition 115
 
Understand the Cost of Weak Project Definition 116
 
Be Careful When Trading Fast Schedule for Strong Project Definition 118
 
Reduce the Number of Schedule-Driven Projects 122
 
More Project Definition Is Not Necessarily Better 122
 
8 It's Going to Cost How Much!?! A Guide to Help Executives Avoid Capital Cost Surprises 125
 
Key Concepts to Understand about Capital Cost Estimate Accuracy 128
 
Factor the Cost Estimate Range into Decision Making 129
 
Improve Project Definition to Narrow the Cost Estimate Range 136
 
Follow These Rules to Get Contingency Right 140
 
9 Using a Project Steering Committee to Improve Executive Decision Making 147
 
How to Build a Strong Steering Committee 150
 
Who to Include in the Steering Committee 152
 
Run the Steering Committee Efficiently 154
 
Make Decisions at the Right Level 155
 
Do Not Dilute Project Sponsor Accountability 156
 
10 Risk Management: A Mechanism to Understand Project Risk and Decide What to Do 159
 
Risk Management: Identify, Analyze, and Manage Individual Risks 164
 
Practices for Getting the Most from Risk Management 166
 
Scrutinize Risks to Decide Whether They A

About the author

PAUL BARSHOP, Director, IPA Capital Solutions, provides hands-on support to companies who are seeking to realize more value by enhancing their capital project development and delivery systems. Previously, he served as both IPA's chief operating officer and director of its Europe, Middle East, and Africa region. He has authored numerous articles for industry trade journals and IPA subscription newsletters.

Summary

A real-world framework for driving capital project success Capital Projects provides an empirically-based framework for capital project strategy and implementation, based on the histories of over 20,000 capital projects ranging from $50,000 to $40 billion.

Product details

• Authors: Paul Barshop, Paul H. Barshop, Ph Barshop
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 25.10.2016
• EAN: 9781119119210
• ISBN: 978-1-119-11921-0
• No. of pages: 224
• Subjects: Social sciences, law, business > Business > Management; Ratgeber Wirtschaft, Business & management, Wirtschaft u. Management, Business Self-Help, Wirtschaft /Ratgeber