ROI of a 2-Hour Meeting
I just read a nice article from McKinsey on how chemical companies can reduce costs by 15-30% on their small to midsize capital projects. It’s all about ensuring scope is well defined and managing risk.
Here’s a link to the article: “Small equals big: Unlocking savings in small to mid-sized capital project portfolios in chemicals“To quote the article:
“When speaking of their approach to managing smaller capital projects, most chemical-company executives we talk with describe a well-defined and effective process: projects are selected based on business logic, designed with optimal scope, and executed under stringent time lines with sufficient supplier engagement. Indeed, we observe that in many cases, these companies do have robust stage-gate governance frameworks with clear requirements in place that would, if followed, lead to capital projects that are well designed and executed.
The reality, however, is often vastly different. Time and again, we see business cases that overestimate returns while underplaying risks, and we see projects advance through stage-gate processes that are not followed or are applied with significant gaps. Despite having a robust paper process, project sponsors are usually overburdened by the large number of projects and have insufficient time and, in some cases, technical capabilities needed for truly stress-testing a proposed small to midsize capital project.“
This has definitely been our experience working with clients, and it’s why the Project Definition Rating Index (PDRI) was created and why it’s helped thousands of projects reduce costs and schedules.PDRI also helps ensure that the business case is right, that technology/design is appropriate and that the best execution approach is selected.
Structure of PDRI for Small Industrial Template
Benchmark results from CII’s have shown small projects applying the PDRI for Small Industrial Projects template achieve cost savings of up to 16% and schedule savings of up to 15%.
Not bad for a 2 hour meeting!