Capital project success: Your roadmap

The complexity of today’s capital projects is causing a widespread loss of value and confidence due to project overruns. Projects are larger, more technical, and running at a faster pace than ever before. Yet decades-old project methodologies can’t keep pace. And that means it is time to rethink capital projects and transform these outdated strategies with digital technologies, high-end expertise, and the power of automation.

When it comes to the current capital project environment, research and experience show that over the past 10 years, 65 percent of capital projects valued at over $1 billion have failed—meaning they were either 25 percent over budget or 50 percent late. 

Not only is valuable investment capital being wasted, but company performance is also damaged—which drags down company profitability, shareholder value, and the ability to grow the business. 

To gain a better understanding of what’s been happening, Emerson worked with an industry benchmarking company and studied over 400 capital projects and found that Top Quartile companies completed the same project for half the cost and in half the time compared to fourth quartile companies. Two primary issues causing this type of variance are increased complexity and outdated methods.

Complexity of scope, challenging locations, and technical complexity may be obvious. But recognizing how “traditional” or outdated methods are holding us back is perhaps a new insight—especially when faced with creating a more sustainable business model in a rapidly changing landscape focused on competition, process pressure, and higher risk.

Leveraging automation to ensure on-time completion
A fresh approach for success in today’s market features digital technologies that can automate workflows—and wireless instruments that can eliminate field engineering and wiring costs. There are also new analytics that create smarter plants and of course the ability to build full digital twins of both the plant and the control system. 

Over the past few years, budgets have been increasing, but so have expenditures—and larger overruns often exceed those budgets. While best practices are helpful for bringing cost and schedule overruns back in line, they are not enough. 

But, what if automation could be leveraged to make the plant commissioning schedule shorter, more predictable, and ensure on-time completion? Making a fundamental and reset transformational of design, engineering, and project management can also have a dramatic and measurable impact on your entire project.

It’s time to digitally transform projects. So, where to start?
Begin by eliminating cost. By utilizing technology to automate steps in the process that reduce engineering hours, and using standard technologies to reduce design hours, construction materials, and labor, you can automate workflows and eliminate unnecessary work which can result in substantial project savings. 

Next you must reduce complexity. Projects are complicated enough, so you might start to simplify the project by using secure Cloud engineering to decouple supplier dependencies, work concurrently across functions with better interaction, and improve data and document management.

Your third imperative is having the ability to better accommodate changes. The most fundamental values technology can add to a project are speed and flexibility. What if you could end plant startup delays by better accommodating automation design changes during the project with less impact on the schedule?

All these benefits are possible with Emerson’s Project Certainty program, a transformational approach to achieving Top Quartile performance on capital projects. To take advantage of these and other innovative digital technologies and engineering approaches requires defining a strategy early in the project, during Front End Engineering and Design (FEED). After FEED, it’s too late.  

A foundational element to achieving the project performance you seek is to partner with a Main Automation Contractor, or MAC, to help design and implement the best digital transformation strategy for the project. It is a proven driver of project execution success and starts early—in Pre-FEED and extends all the way through commissioning. If done right, your automation partner will manage all aspects of the digital project and provide information at every stage; bring expertise to optimize design for performance versus cost; create value improvement programs; assist with standardization; bring dedicated teams with formal execution processes; and keep automation on track throughout the project, including during commissioning.  

By following more effective methodologies and adopting new digital technologies, you can digitally transform your project and set the stage for maximizing the profitability of your plant and ROI over the next 20-60 years.