Comprehensive list of our capital project effectiveness service offerings
Ernst & Young's objective is to be a business advisor, looking at the overall goals of the organization, determining how a given project aligns and what we can do to help it succeed.
First ask yourself: Are we ready for the next step?
All too often a business advisor is called in at the end of the project life cycle to conduct a post-mortem rather than at the beginning, during concept development and pre-planning.
The task of a good advisor is to help its clients do their jobs more efficiently and effectively, managing their risks and realizing their rewards. Asking focused questions such as these upfront can help avoid having to ask tough questions later:
- Is your capital projects program holistic, with a stage-gate approach?
- Have you clearly defined who bears the ultimate responsibility for the success or failure of a project — an individual, management or the steering committee?
- Does your approach realistically match your organization's capabilities?
- Is your capital project structured to balance the needs of various stakeholders?
- How will you measure and track progress?
- Do you have a plan for optimizing the performance of your suppliers?
- Do you have a realistic budget that factors in historical success rates in meeting projected scope, schedule and quality goals?
- Are policies and procedures in place to manage and mitigate project risk?
- Is there a common understanding of the strategic implications and financial consequences of project failure?
How Ernst & Young can help
Our objective is to be a business advisor, looking at the overall goals of the organization, determining how a given project aligns and what we can do to help it succeed. With that perspective in mind, we have designed the following offerings in the major capital projects area:
Capital project risk assessment
Our major capital project risk assessment offers the greatest ability to positively affect the full life cycle management of a project. Risk assessment efforts should focus on the issues with the greatest potential to impact objectives. Strategic risks include environmental considerations, investment and resource allocations and market dynamics.
|Operational risks ||Financial risks ||Compliance risks |
- Supply chain
- Individual performance of team members
- Information technology (IT)
- Safety and physical assets
- Market conditions
- Liquidity and credit
- Accounting and reporting
- International currency fluctuations
- Capital structure
- Code of conduct
- Legal and regulatory requirements
Our risk assessment approach looks at the interdependencies of these risks and how they are affected or mitigated by existing people, process and technology assets. When gaps between identified risks and existing controls are identified, we assist our clients in developing and implementing management plans to mitigate, transfer, or, when necessary, prepare for the acceptance of these risks.
As the project progresses in maturity, the opportunity to influence its design and performance is reduced proportionately, while the cost of making changes increases.
Our capital project risk and control services provide a structured review of the overall strategy, planning, procurement, design, implementation and completion of capital projects. The aim is to highlight performance weaknesses and determine future areas of risk and opportunities for improvement, while building business confidence and enhancing overall project performance.
Project contract management
The contract is the vehicle that largely defines and allocates responsibility for each of the parties' share of the project risks. In recent years, contractors and project owners have developed new, innovative and complex approaches to contract structure, pricing arrangements and risk allocations, which have included such elements as alliance agreements, incentive fees and hybrid pricing arrangements.
Depending on the relative sophistication of the contracting parties, their familiarity with the nuances of the contracting strategy, understanding of the associated risk allocation, and organizational capabilities to mitigate those risks, each may be inadvertently accepting more risk or risk that is different from what was originally planned.
We have broad cross-industry experience advising clients during the development of their contracting strategy, including advising on potential contractually required controls and remedies to mitigate the risk of the selected strategy
Supplier performance management
Oil and gas companies have been using suppliers to carry out a large part of their required field operations for decades. The days of oil and gas companies having their own captive fleets of drilling rigs and associated oilfield service capabilities are long past.
Owners are now deeply engaged with a supplier base that is both effective and mobile. However, with the increasing use of suppliers across the "build" and "operate" areas of their business, a new range of issues needs to be effectively managed.
We can help our oil and gas clients address this situation by assisting them in adopting a more holistic view of supplier performance management. Within our Advisory capabilities, we combine our competencies in a way that provides a tailored solution to address this client need, encompassing the areas of enterprise risk management, procurement transformation, technology enablement and contract compliance.
Capital project integrated project team
An increasing focus on capital life cycle management is beginning to emerge, putting more emphasis on the front-end planning for the larger program management effort. The management team typically tasked with this effort understands immediately that the project life cycle must be controlled at every level of the organization.
Our integrated project team (IPT) approach focuses on the functions that are crucial to the capital project that support the planning, development and execution of a portfolio of activities.
The IPT creates effective project oversight and control, minimizes project confusion and promotes greater project success, keeps management well-informed, improves integration of vendor and workgroup activities, builds project management expertise, and helps define and achieve near-term project objectives and the company's long-term, post-project goals.
Companies that try to manage projects via uncoordinated, disconnected efforts discover that risks and execution issues ultimately lead to widespread failure. Setting up an IPT can be challenging, but this is not uncharted territory. The road is well-traveled, and many organizations, large and small, are realizing the benefits that consistent control over projects provides.
Operating model development
Comprehensive list of our capital project
effectiveness service offerings
Our approach to organizational design sets us apart by delivering sustainable improvement in five ways:
- We deliver integrated designs by adopting a systematic and structured approach, aligning all interdependent components of an organization before completing designs.
- We confirm organizational designs are sustainable by building in flexibility and leaving an ability to refine the design with the client.
- We facilitate stakeholder collaboration throughout the project journey that helps make sure the solution is developed and owned by the client.
- We tailor the design to deliver a flexible and effective organization.
- We use a range of innovative tools and methods to bring designs to life in order to create a workable and pragmatic solution.