Identification of business-project management processes that improve capital efficiency of downstream and chemical projects

Abstract

An important performance measure to evaluate capital expenditure and return on investment (ROI) is capital efficiency. In the downstream and chemicals sector, capital efficiency becomes even more critical. Indeed, this sector is asset-intensive and capital projects carried out there can be large, complex and require significant investment of capital and time. Project capital efficiency can be impacted by how well the business unit aligns with the project unit, as they collaborate in the early project phases to determine how the project will be built and operated. This research aimed to identify business-project management processes that help improve project capital efficiency. The study assembled a 17-expert panel to define project capital efficiency with its four key improvement areas. The panel identified 28 management processes that lead to improvement in project capital efficiency if they are implemented effectively by business and project units in early project phases. A survey was used to determine the relative importance of these management processes. Researchers quantitatively analysed, ranked and compared the relative importance. Findings indicate that 23 management processes are very important to project capital efficiency and four of them are perceived differently in their relative importance by the two units.