Achieving the Unachievable A Case Study on Aligning a Project with Stakeholder Objectives

Dr. Dan Patterson PMP | CEO & Founder Acumen

enterprise project analysis

S1: Build

S2: Critique

S3: Risk-Adjust

S4: Optimize

S5: Validate

! Acumen: Project Management Software Company ! Market leader in Analytics; 20 year legacy ! Oracle Primavera & Microsoft partner

Introductions

S1 > S5™ Framework Acumen Core Offerings

Risk Assessment Workshops

Acumen Fuse®

Software Training

! Case study: GasCom ! LNG Pipeline & Facility Owner ! Early FEED stage

! Project readying for sanction approval ! Investment board Dec 2013 P75 First Gas ! Gas Sales contract already established

! GasCom adopted Acumen S1>S5 ! Required contractors to achieve Fuse Schedule

Index™ of 75% ! Schedule developed in Primavera P6 ! All analytics conducted using Acumen Fuse

February 10, 2012

3

Case Study Introduction

S1 •  Schedule Basis •  Reflects latest scope/contractor updates

S2 •  Critiqued Schedule •  Structurally sound, no contingency, sound logic

S3 •  Risk-Adjusted Schedule •  Estimate uncertainty, risk events

S4 •  Optimized Target Scenarios •  Reduced hot spots, higher confidence

S5 •  Team Validated Scenario •  Buy-in on mitigation plans

February 10, 2012

4

GasCom S1 > S5 Approach

! Deterministic date of Dec 2013 ! Bidding contractors submitted their

schedules to GasCom ! GasCom needed to ensure sufficient

realism in the schedules ! Looked for means of compressing the

schedule to show that an earlier First Gas was achievable

February 10, 2012

5

S1 > S2 Schedule Review

! Metric Analysis ! Quality of logic ! Float analysis ! Realism of durations ! Contractor maturity/realism

! Based on the Fuse metric library

February 10, 2012

6

Schedule Critique

[demo of standard Schedule analysis]

February 10, 2012

7

Fuse Schedule Index™ Analysis by Contractor

! Bidder B failed Schedule Quality review ! Quality was less than 75% threshold

! Had to re-submit resolved schedule ! Used Fuse Schedule Assistant™ to fix

shortcomings

February 10, 2012

8

Schedule Analysis Results

February 10, 2012

9

GasCom Schedule Cleanse

Lags converted to activities

February 10, 2012

10 Impact of Schedule Cleanse

5 month slippage

! Use of FS, FF, SF, SS links ! SS links don’t account for durations ! Lags hide schedule detail ! Leads cause reverse dates ! Circular logic between projects ! Out of sequence updates ! Open start/finish: hidden open ends ! Logic Density™ ! Logic Hotspot™ ! Redundancy Index™

February 10, 2012

11

Logic Integrity

A

B

C

redundant

February 10, 2012

12

GasCom Logic Density™ ! Measure of complexity & soundness ! Dual-band threshold: 2 to 6… ! Determine Logic Hotspots™ in schedule ! GasCom the level of detail was lacking towards the end

of the project – mainly around interfaces & integration

More definition needed

! Test to ensure true path to First Gas ! Analysis showed that there was an error in

the schedule with a break in the path around Early Works

! As a result of fixing this missing path, First Gas moved to the right by 2 months

February 10, 2012

13

Driving Logic Analysis

14 Removal of Logic Redundancy

8% redundancy

Removal of redundancy led to a cleaner, more robust schedule

! S1 showed high float in early stage of project ! S2 resolved schedule showed the opposite ! Sanction acceleration opportunity went away

February 10, 2012

15

GasCom Float Analysis

0

20

40

60

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014 S1 Average Float S2 Average Float

Originally percieved opportunity for making up

lost time through float absorbtion in early stage of

project

Resolved schedule not offering early stage schedule

acceleration

! Bidder schedules all passed the Schedule Quality Index™ Assessment

! Missing logic was added ! Lags converted to activities ! Opportunity for schedule acceleration was

understood (back-end loaded)

February 10, 2012

16

S1 > S2 Summary

5 months S1: Dec 2013 S2: May 2014

! Objective: to determine a risk-adjusted P75 First Gas ! Risk workshop conducted ! True risk exposure was actually at end of project

February 10, 2012

17

S2 > S3 Risk Analysis

0%

10%

20%

30%

40%

50%

60%

70%

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Team Perception

Actual Risk Hotspots

! Hidden critical paths ! Risk hot Spots™ ! Determined that Land acquisition activities were

extremely critical yet weren’t identified in the schedule

February 10, 2012

18

Risk Insight

Land acquisition

! P75 risk-adjusted First Gas: Oct 2014 ! 10 months later than board expectations

! Key risk hot spots in schedule identified ! Long Lead procurement items

! Hidden path identified ! Driven by land acquisition delaying pipeline early

works

February 10, 2012

19

S3 Summary

5 S1: Dec 2013 S2: May 2014 10 S3: Oct 2014

S4: Getting back to December 2013… Risk Mitigation Plan

! Response plan identified for each key risk

! These plans became part of the overall schedule

! Enabled cost/benefit of the mitigation plan to be assessed

! $100MM investment to save 1 month

! LNG pipeline ready for hookup: Feb 2013

! LNG Facility ready to receive gas: Nov 2013

! Focus needed to be on accelerating the LNG facility

! Could even afford to slow down pipeline/field work by a couple of months…

February 10, 2012

20

Schedule Acceleration

! Drive acceleration ! Reduce duration

! More resources

! Changed calendars ! Contractor incentive

! Delay Train 2

LNG Facility Acceleration Criteria Set

LNG Facility

Script Objective “accelerate Facility by 6

months”

Step 1 Accelerate Jetty construction

Step 2 Delay Train 2 activities

Step 3 Introduce 6 day working week/larger camp

! CPM simulation ! Critical path focus ! Incremental push ! Prioritize

! Earliest/latest ! Longest durations ! Least resistance

February 10, 2012

22

How Did This Work?

! LNG Facility was able to be accelerated sufficiently so as to not be the driving path in the schedule

! Deterministic First Gas of August 2013 ! 4 months earlier than Dec 2013 but not a

valid comparison! ! Sanction board wanted a P75 date not a

deterministic ! Risk-adjusted S4 date of February 2014 ! Only 2 months later than target…

February 10, 2012

23

S4 Summary

! A further 2 months acceleration was still required… ! New mitigation plans developed based on the

updated risk analysis after the schedule compression ! Model showed that if the board would sanction a

further $500MM spend to sponsor the more aggressive mitigation plan, then P75 could be brought back to Dec 2013.

! Project team went to the board with both options and were duly granted the green-light for the more aggressive plan so as to achieve earlier production…

February 10, 2012

24

S5 Team Buy-in

February 10, 2012

25

GasCom First Gas Dates

0

1

2

3

4

5

6

7

8

9

10

S1 - base S2 - resolved S3 - risk-adjusted

S4 - accelerated S5 - mitigated

0

5

10

2 0

P75 S

ched

ule

Del

ay F

rom

Dec

2013 1

st G

as (

mon

ths)

Scenario

Resolved, risk-adjusted,

accelerated, mitigated

February 10, 2012

26

The End Result ! Fully vetted, bought-into schedule ! Risk-adjusted ! LNG Facility accelerated to align with pipeline ! Mitigation plan sponsored by board ! Sanction awarded!

February 10, 2012

27 Better Planning Drives Project Success

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pro

bab

ilit

y of

On-

Tim

e C

omple

tion

Fuse Quality Index™

28 Sample of Completed S1>S5 Projects

Top of bar represents sanctioned target completion date

Diamond represents actual/final forecast completion date

Vertical bar represents forecasted risk range

More information: White papers: www.projectacumen.com Software Trial: www.projectacumen.com/trial Twitter: @projectacumen

Email: info@projectacumen.com