BROADLEAF CAPITAL INTERNATIONAL PTY LTD

ABN 24 054 021 117

23 Bettowynd Road Tel: +61 2 9488 8477
Pymble Mobile: +61 419 433 184
NSW 2073 Fax: + 61 2 9488 9685
Australia www.Broadleaf.com.au [email protected]

Specialists in Strategic, Enterprise and Project Risk Management

VALUE IMPROVING PRACTICES

1 Background

The development and implementation of major projects makes increasing use of a range of formal
review and analytical processes that have been shown to improve the chances of achieving a
successful outcome. These are generally referred to as Value Improving Practices or VIPs. They are
most effective when implemented during the early stages of a project, usually as part of the Front End
Loading (FEL) activity.

Broadleaf offers support for several of the commonly recognised VIPs as well as:
− Additional processes for review and analysis during project development;
− Concept generation and review prior to the formulation of a business case;
− Overall business investment opportunity management processes.

This note describes the support Broadleaf can offer in these areas and provides an indication of the
approach we commonly recommend to implementing VIPs that will enhance business outcomes. In
addition to offering well tried methods and tools, Broadleaf’s team of senior personnel offer high
grade facilitation and process management skills that can be applied to a range of requirements.

2 Basic Principles

While the details vary with the characteristics of a particular project and the nature of the review or
analysis process being utilised, there are some basic principles that underpin the quality and value of
VIPs and related exercises. These include the following:

Table 1: Principles
Undertake the exercise at times that balance the availability of relevant information
and the need to ensure there is sufficient flexibility and time for the outcomes to be
Timing
used. The timing may also be driven by the need to succeed at the next project
approval stage.
Use a well-prepared and well-structured process, taking account of any relevant
Process Standards, to ensure that all facets of the project are covered with a balanced
application of effort and time to each one.
Use independent facilitation to enhance the rigour and integrity of the process.
Facilitation This also allows participants to devote their energy towards the content of the
exercise while the process is managed by the facilitator.
Engage the people required to ensure comprehensive coverage of all relevant areas
of the project, from the business vision to engineering, implementation and on into
Participation
operation, while promoting team integration and providing a viable group for a
workshop or other form of interaction.
Recording Ensure the conduct and outcomes of the process are recorded comprehensively.
Action Transfer the outcomes effectively into project design and implementation.

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3 VIPs for Enhancing Business Outcomes

An overview of the VIPs and other processes for which we offer support is set out in Table 2.

The timing of these exercises can vary. If the optimum point in a project has passed without being
able to conduct a review or analysis, value may still be gained by tailoring the approach to suit the
situation of the project when the opportunity to do so does arise. Figure 1 indicates what is likely to
be the most appropriate timing for each of the processes outlined here.

Figure 1: Timing

Project development

Prefeasibility Feasibility
Concept & Option FEL1 & FEL2 & FEL3 &
Development Business Case Scope Selection Detailed Definition

Opportunity identification

Strategic option modeling

Risk analysis

Risk modeling

Technology selection

Process simplification

Waste minimisation

Constructability review

Value management

Our strong facilitation skills are widely applicable and from time to time we are called upon to assist
in structuring and facilitating a process to meet special requirements. We are always pleased to
explore such requirements in addition to those set out here. We have a track record of providing
support that delivers sufficient rigour to ensure the integrity of the outcome, capitalising on the
experience and creative input of the participants without placing an onerous burden on them.

4 Contacts

If you would like further information about Value Improving Practices, or our other facilitation
activities, please contact one of the members of Broadleaf shown below.

Grant Purdy Dr Dale F Cooper

[email protected] [email protected]

Dr Stephen Grey Geoff Raymond

[email protected] [email protected]

Mike Wood Phil Walker

[email protected] [email protected]

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Table 2: Processes
Process Applications and outcomes
− Exploring the issues and the decisions available to the business
Strategic − Building strategic options associated with a market, resource or capability
opportunity − Identifying where analysis can be directed to resolve strategic decisions
identification − Overcoming the barriers associated with the scale and complexity of
business development
− Constructing cash flow and other models that balance the detail required for
realistic representation against the need for transparency and ready
interpretation
Strategic − Examining the uncertainty associated with cash flows, cash flow drivers and
option modelling timing, and incorporating this uncertainty into a quantitative risk model
− Using quantitative risk models to inform decision making by assessing the
main sources of uncertainty and comparing the forecast financial
performance of investment options
− Establishing priorities and directing attention towards issues requiring
attention in later work by structured identification and analysis of risks
Risk analysis
− Planning risk treatments to ensure that later activities include tasks that will
address major risks and opportunities and so enhance the eventual outcome
− Modelling the cost, schedule and cash flow of proposed investments
Quantitative − Establishing realistic targets, commitments and contingency requirements
risk modelling − Presenting outcomes to support requests for funding and approval to proceed
with further work
− Comparing technology options for system implementation using risk and
Technology opportunity review processes
selection − Identifying the relative strengths and weaknesses of alternatives to assist in
technology option selection
− Challenging the need for the unit operations, equipment redundancy,
flexibility and other ‘nice to haves’ as part of early design review and value
management exercises
Process − Mapping current processes and procedures, and testing and optimising them,
simplification through the use of operational breakdown matrices and Procedural HAZOPs
− Optimising processes through human error and task analysis
− Reviewing integrated recycles and examining alternative approaches that
will achieve the required outcome more cost-effectively
− Exploring options to eliminate, reduce, reuse or recycle material and energy
Waste wastes
minimisation − Identifying the real costs of wastes and justifying expenditure on
minimisation options
− Reviewing construction plans to identify risks to be resolved and
Constructability
opportunities to be exploited
review
− Identifying priorities for action to improve plans
Value − Reviewing functions to identify options for value improvement
engineering & − Using formal workshop facilitation and processes in compliance with
value Standards
management − Integrated assessment of options to prepare strategic improvements plans

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