Benchmarking the Value

of
Best Practices

Annual Conference
Keystone, Colorado

Edesio Finol

Mayo 2003

Session Participants
Moderator
J ohn Tato - U.S. Department of State
Panelists
Bob Ogletree BE&K
Charlie Green Aramco Services Company
Bob Herrington J acobs
Steve Thomas - CII

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Mayo 2003

Goals of this Session

Highlight recent Benchmarking &
Metrics Program improvements
Present key findings from the
the
program
Illustrate the value of benchmarking
Address barriers to
to benchmarking

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Mayo 2003

If we dont change our direction,

we might end up where were
headed.
Chinese proverb

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Mayo 2003

Q: Are you currently benchmarking your projects?

NO
26%

YES
74%

Reasons for not benchmarking:

Lack of time and other resources.

Project management reporting

process not formally established.
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Mayo 2003

Q: Do you have a data collection infrastructure that

facilitates the collection of data essential to an
effective benchmarking system?

NO
50%

YES
50%

Reason for Noresponses:

No in-house system

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Mayo 2003

Q: Are you satisfied with

with your benchmarking program?
YES/NO NA
4% 2%

NR
7%

YES
30%

NO
57%

Reasons for No responses:

No program has been implemented
More consistency/standardization needed in

benchmarking projects
Benchmarking efforts need to be focused on other types

of projects
Data systems should be more flexible/automated

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Mayo 2003

Our Charter
Establish common definitions.
Establish metric norms.
Determine value of best practices.
Provide members a basis for self-analysis.
Support CII research and implementation

activities through feedback.

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Mayo 2003

Our Customers
Member Companies
Research and Implementation
Funded Studies
Alliances
Benchmarking Participants Program (BMPP)

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Mayo 2003

Questionnaire
Questionnaire Development
Version 1

Performance
Metrics

Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance

Version 1
Best
Practices

Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques

Metrics
First version

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209 Projects

$ 11.47 Billion

Mayo 2003

Questionnaire Development
Version 2

Performance

Version 2

Metrics

Best
Practices
Metrics
Refinements
Addition of Two practices

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Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance

Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques
Project Change Mgmt
Design/Info. Tech.

442 Projects

$ 25.95 Billion

(Cumulative)

(Cumulative)

Mayo 2003

Questionnaire Development
Version 3

Performance
Metrics

Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance

Version 3
Best
Practices
Metrics
PDRI
For Buildings
(part of PrePre-Project Planning)

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Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques
Project Change Mgmt
Design/Info. Tech.

745 Projects

$ 39.88 Billion

(Cumulative)

(Cumulative)

Mayo 2003

Questionnaire Development
Version 4

Performance
Metrics

Version 4

Best
Practices
Metrics
Electronic/Web
Questionnaire

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Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance

Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques
Project Change Mgmt
Design/Info. Tech.

906 Projects

$ 49.68 Billion

(Cumulative)

(Cumulative)

Mayo 2003

Questionnaire Development
Version 5

Performance
Metrics

Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance

Version 5

Best
Practices
Entire PDRI - (part of PrePre-

Metrics

Project Planning)

Materials Management
Planning for Startup

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Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques
Project Change Mgmt
Design/Info. Tech.
Materials Management
Planning for Startup

988 Projects

$ 52.15 Billion

(Cumulative)

(Cumulative)

Mayo 2003

Questionnaire Development
Version 6

Performance
Metrics

Version 6
Best
Practices
Metrics
Project Environment
Quality Management
Construction Productivity Metrics

Edesio Finol

Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance
Construction
Productivity Metrics

Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques
Project Change Mgmt
Design/Info. Tech.
Materials Management
Planning for Startup
Quality Management

1037 Projects

$ 54.19 Billion

(Cumulative)

(Cumulative)

Mayo 2003

Questionnaire Development
Version 7

Performance
Metrics

Version 7
Best
Practices

Major Upgrade !!!

100% Review/Rewrite &
32% Reduction in Basic
Questionnaire

Edesio Finol

Metrics

Cost Performance
Schedule Performance
Safety Performance
Change Performance
Rework Performance
Construction
Productivity Metrics
Pre-Project Planning
Constructability
Team Building
Zero Accident Techniques
Project Change Mgmt
Technology Auto. / Integ.
Materials Management
Planning for Startup
Quality Management

1037 Projects

$ 55 Billion

(Cumulative)

(Cumulative)

Mayo 2003

Questionnaire

Custom
Customers
Member Companies
Research & Im
plementation
Implem
Funded Studies
Alliances
BMPP

Edesio Finol

Questionnaire
Metrics

Cost & Schedule

Safety
Best Practices
Environment
Data
Productivity
?Construction
?Engineering

Mayo 2003

Questionnaire Streamlining Process

October 25-26, 2001

December 11-12, 2001

January 17-18, 2002

Diagnose

Data Analysis
& 1st
Revision
Workshop

2nd
Revision
Workshop

February 5, 2002

March 4, 2002

March 4 April 30, 2002

Analysis/Value
of Best
Practices
Workshop

Final Revisions
&
Reprogramming

Power User
Workshop

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Mayo 2003

The Results
Section

Description

Question
Delta

Percent
Change

Front End

Participant Data, Cost, Schedule, Safety,

Project Environment, Changes, & Rework

-38

-24%

Best Practice

PrePre-Project Planning

0%

Best Practice

Constructability

-5

-39%

Best Practice

Team Building

0%

Best Practice

Zero Accident Tech

+2

+12%

Best Practice

Project Change Management

-1

-7%

Best Practice

Materials Management

-39

-74%

Best Practice

Quality Management

-7

-36%

Proposed Best
Practice

Planning for Startup

-26

-65%

Other Practice

Design/Information Tech - Tech Auto/Integ

Auto/Integ

-15

-34%

0%

PDRI
Total

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-Project Definition Rating Index

-32%

Mayo 2003

Process of Determining Value of Best Practices

Determine
Practice to BM

Revise Practice Use Questions or Drop Practice

Failed
Add Practice
to BM&M
Questionnaire

Survey Practice Use

&
Performance

Perform
Preliminary
Analysis
(Correlation)

Preliminary
Assessment

Passed

Continue
Data Collection

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Perform
Comprehensive
Analysis

Report
Output

1. Recommended
Status as BP
2. Value of BP

Mayo 2003

Cost Performance
(Project Budget Factor)

1.03
1.01

4.8091
0.9941

4.5081
BF
CNT

0.97
3.8769

5.5
5.0

0.99

0.95

6.0

0.9682

4.5
4.0
3.5

Constructability

1.05

Cost Performance (Project Budget Factor)

vs. Constructability

0.9525
0.93

3.0

0.91

2.5
<= 6 yrs

Project Budget Factor=

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7 -12yrs

>12 yrs

Actual Total Project Cost

(Initial Predicted Project Cost + Approved Changes)

Mayo 2003

Safety Performance (RIR)

vs. Zero Accident Tech.

Safety Performance
(RIR)

9.0

8.4769

10
9.1021
9

8.0988

8.0

8
RIR

7.0
7.0572
6.0

4.9222

5.0

5
3.4775

4.0
3.0

4
3

<= 6 yrs

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ZAT

Zero Accident Techniques

10.0

7 -12yrs

>12 yrs

Mayo 2003

Preliminary Analysis
Expected Correlation

Project Cost Growth

Project Change Management vs. Project Cost Growth

0.6
0.5
0.4
0.3
0.2
0.1
0.0
-0.1
-0.2
-0.3
-0.4
-0.5
-0.6
0

10

Project Change Management

Actual Data

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Mayo 2003

Preliminary Analysis
No Correlat
ion
Correlation

Project Cost Growth

Practice X vs. Project Cost Growth

0.6
0.5
0.4
0.3
0.2
0.1
0.0
-0.1
-0.2
-0.3
-0.4
-0.5
-0.6
0

10

Practice X
Constructability
Notional Data

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Mayo 2003

Comprehensive Assessment
Best Practices Aggregate
vs Project Performances Aggregate

Project Performances Aggregate

0.4

Respondent : Owner
Cost Category: All
Project Type: All

Location: Global
Industry Group: Heavy Industrial
Project Nature: All

0.3

0.2

0.1
Potential for
Improvement

0.0

-0.1

-0.2
4th Quartile
Low

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3rd Quartile

2nd Quartile

Best Practices Aggregate

1st Quartile
High

Mayo 2003

Cost Savings
Project Cost Growth vs. Standardized Practice Index

.10

Respondent: Owners
Cost Category: All
Project Type: All

Database: Global
Industry: Buildings
Project Nature: All

Project Cost Growth

.08
.06
.04
.02

8.5%

-.00
-.02
-.04
-.06
-.08
-.10
4th Quartile
n=32

3rd Quartile
n=33

2nd Quartile

1st Quartile

n=30

n=33

By Standardized Practice Index

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Mayo 2003

Cost Savings

$10.9MM Cost of average building project

x 8.5%
Cost growt
growth savings
$926K

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Potential savings for typical

project

Mayo 2003

Schedule Reductions
Project Schedule Growth vs. Standardized Practice Index

Project Schedule Growth

.60

Respondent: Owners
Cost Category: All
Project Type: All

Database: Global
Industry: Buildings
Project Nature: All

.50
.40
.30
.20

31.7%

.10
0.00
-.10
-.20
4th Quartile

3rd Quartile

2nd Quartile

1st Quartile

n=28

n=30

n=29

n=22

By Standardized Practice Index

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Mayo 2003

Schedule Reductions

28 Month Total duration of average building

project
x 31.7%
Schedule growth savings
8 Month

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Potential savings for typical

project

Mayo 2003

Gap Analysis

Project Cost Growth

Project Outcome
0.10
0.05
0.00
-0.05
Opportunity

-0.10
-0.15
-0.20

Ver 1
1996

Ver 2
1997

CII Average Practice Use

CII 1st Quartile Practice Use

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Ver 3
1998

Ver 4
1999

Ver 5
2000

Ver 6
2001

Time

Questionnaire Version and Year

Mayo 2003

Comprehensive Assessment
Impact on Cost Performance

The Effects of Best Practice Use by Industry Sector Project Cost Impact

Owner

Best
Practices

Contractor

Bldg.

H.I.

Infra.

L.I.

Bldg.

H.I.

Infra.

L.I.

Pre Project
Planning

High

High

Low

High

Low

Med

High

Low

Constructability

Med

Med

Med

High

High

Med

Low

High

Change Mgmt

High

High

High

Low

Low

High

Low

Low

Design / Info
Technology

Low

Low

Low

Low

Low

Med

Low

Low

Team Building

Low

Med

Low

Med

Med

Med

Med

Med

Zero Accident
Techniques

Low

Low

Low

Low

Low

High

Med

Low

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Mayo 2003

Comprehensive Assessment
Impact on Schedule Performance

The Effect
s of Best Practice Use by Industry Sector Project Schedule Impact
ects

Owner

Best
Practices

Contractor

Bldg.

H.I.

Infra.

L.I.

Bldg.

H.I.

Infra.

L.I.

Pre Project
Planning

Low

Med

High

Med

Low

Med

Med

Low

Constructability

Low

High

Low

High

Low

Low

Med

Med

Change Mgmt

Low

Low

High

Low

Med

Med

Low

Low

Design / Info
Technology

High

Med

Low

Med

High

Med

Low

High

Team Building

Low

Low

Med

Low

Med

High

Low

Low

Zero Accident
Techniques

Med

High

Low

Low

Low

Low

High

Low

Edesio Finol

Mayo 2003

The Results
Safety Performance
Recordable I ncidence Rate

16

Owners & Contractors

14.30 14.20
13.00 13.10

14
12

12.20

I ndustry

11.80
10.60

10
8

9.50

8.80

8.60

8.30

7.19
6.12

9.90

Est.
7.28

5.32

CI I

4.31

3.44

3.00

2.66

2.30

1.60

1.59

1.67

1.03 1.02

0
1989 1990
325

413

Note: Industry based on OSHA

SIC 15-17

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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
477

497

527

613

644

770

518

765

995

936

2001
1,115

Year and Work-hours (MM)

Mayo 2003

Benchmarking
Is critical to continuous improvement process.
Requires senior management commitment.
Requires continual analysis and assessment.
Requires a structured approach.
Is not resource-intensive.
Is available now.
Is important
portant to the bottom
bottom-line.

Edesio Finol

Mayo 2003

Get Involved
Measure Your Performance
At
tend
Att
end a Benchmarking training
training session to
to get
your password
o Project Cent
ral CII
password tto
Central
Benchmarkings website
Add your project data
o Project Cent
ral at
data tto
Central
htt
p://cii-benchmarking.org
http://
Assess
Evaluat
e your performance
Evaluate
Det
ermine tthe
he gap
Determ
Improve
Use tthe
he Benchmarking and CII tools to improve
Edesio Finol

Mayo 2003

You Need To Benchmark!

Edesio Finol

Mayo 2003