Consider a Cold Eye Review

Input from independent experts can bolster prospects for project success

By Brett W. Bailey, Pathfinder, LLC

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Almost all best-in-class plant owners and contractors now rely on a phase-gated project delivery process (PDP), as depicted in Figure 1, to maximize the benefits of capital spending. They make "go/no go/recycle" decisions at stage gates, especially the ones at the end of each of the first three phases, the front-end loading ones (FEL 1–3). These gates also often are linked to funding decisions, either partial funding to support the next planning/development phase or full funding, usually at the completion of front-end engineering, to authorize the execution phase of the project.

The gatekeeper plays a crucial role in the PDP — ensuring a project advances to the next phase only if it fully satisfies clearly defined requirements. Because of the broad technical and project management knowledge needed to make decisions, the gatekeeper in reality should be a team or committee that provides cross-functional expertise for a constructive critical review of a project's state of readiness to proceed into the next phase.

Because gates represent critical decision points that may lead to authorizing considerable funds for the next phase or for terminating a project or revising it to achieve PDP requirements, teams generally rely on industry-recognized metrics and practices to ensure the project deliverables are adequate in content and quality to move the project to the next phase. Many organizations have invested, often heavily, over the years in developing effective PDP systems, techniques and tools.

However, many companies today must contend with staffing and funding limitations that compromise effective gatekeeping. Tasks typically are assigned to the most experienced personnel, who usually have the least amount of time available to analyze all the dimensions involved. So, in many cases, the recommended practices have turned into "check the box" exercises, conducted half-heartedly or solely to satisfy corporate requirements to obtain funding for the next phase.

Quite often, this results in "penny wise, pound foolish" drills that produce inflated scoring, leading to questionable projects moving to the next phase, or that overlook opportunities for significant capital- or operating-cost savings or schedule enhancements.

The impact of "mailing in" these assessments can range from simply embarrassing if expected outcomes aren't achieved, to catastrophic if a key corporate strategic project fails, devastating profitability or causing gross violations of environmental and safety regulations.

Companies must retain the functions needed to exercise effective due diligence in planning and executing projects. However, that doesn't mean they can afford to put experts on gatekeeper teams full-time. Instead, many firms rely on "cold eye" reviews conducted or facilitated by independent objective specialists with the necessary expertise to properly carry out such exercises. This approach cost-effectively provides specific expertise for short periods.

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