Benchmarking, Investment Analysis and Front-End Planning

To continue my series of blogs on benchmarking, for my first of three professional examples I will focus on benchmarking of project practices.  I have three complementary benchmarks of project best practices to share – they are front end planning, team alignment and project complexity.

Project Practice – Front End Planning –  the first example is the Project Definition Rating Index (PDRI) – a tool developed by the North American Construction Industry Institute (CII) to benchmark the quality and completeness of front end planning. This was an area of research I was deeply involved in as a company representative and co-leader of the industry working group. The PDRI measures shows the progression of development of front end plans through the early project stages.  The level of progression is measured by a finely tuned checklist of over 70 elements weighted by importance covering three sections – Basis of Project Decision, Project Design and Execution Approach.  A lower score is better and the there is a range of acceptable score against outcomes determined by research based on a large sample size of completed projects.  The research has shown that proper front end planning and measured by the PDRI leads to more predictable cost and schedule outcomes. For more on the PDRI

Project Practice – Team Alignment – the second example of is the team alignment.  The tool is called the Team Alignment Thermometer also developed by the CII.  There are several dimensions to project team functionality that have been proven to be important to project success.  There are four main dimensions that are measured by a team member questionnaire – with the collated results discussed in a team workshop.  The four dimensions are Culture – leadership communication and behaviours; Project execution processes; Information on clear project priorities and objectives and fourthly Team working processes and behaviours.   The exercise of measuring alignment in a workshop greatly aids team development by identifying gaps and fostering an environment of openness and collaboration. For more on the Alignment Thermometer

Project Practice – House of Complexity – the third example is a measure of complexity developed with Massachusetts Institute of Technology (MIT) in Boston, USA and tested on a portfolio of International and oil and gas industry projects  – The House of complexity has three main dimensions – technical, (the technological challenge for the project) institutional (the political, geographical and organisational context for the project); and architectural (how the project is set up) – which can add significant complexity when there are distributed project teams and complicated governance arrangements. For those of you interested to read further, here is an academic paper from Engineering Project Organization Journal

Front End Planning, Team Alignment and Complexity have been proven by the CII and others to significantly impact project performance in terms of cost, schedule and outcomes.

Project Practice – Evidence of Schedule Slip v Team Alignment and Complexity There was an important insight from the analysis I undertook on around 20 oil and gas industry projects. I found that there is a the linkage between schedule outcomes and the combination of project complexity and team alignment.  Charting the data shows on the y axis schedule slippage from low to high and the x axis the function of combining project team alignment with project complexity;  the clear result is that greater the project complexity combined with lesser team alignment – the more likely is schedule slippage.  The analysis indicated a strong trend – with a statistical R2 correlation of 0.74 of the data-points and the calculated trend.

Put another way the schedule slippage is lower for less complex projects and most importantly is reduced by greater project team alignment and functionality.

That completes my tour of project best practices and the complementary benchmarks for front end planning, team alignment and complexity.

I am sure you will have your own professional examples of Benchmarking where data helps you in achieving business goals, please share any that you think would be of interest to this community.  Over the next month I will share my second and third professional examples of benchmarking at work, particularly in the context of projects and project management.