Why Calibration & Benchmarking Icarus KBase? 2005 User Group Meeting, Amsterdam ICEC.nl B.V. Independent Cost Engineering Consultancy Presentation Program 1. 2. 3. 4. 5. 6. Who is ICEC.nl? Why? 1. Why Calibration and Benchmarking KBase? 2. Estimate Tunnel What? 1. Definitions of Calibration & Benchmarking 2. Levels of Benchmarking 3. Benefits How ? 1. Scope of Calibration & Benchmarking effort 2. Define Design and Cost Basis! 3. Populate a Reference Project! 4. Change the estimating process from conventional into KBase! Results! 1. Effects of Calibration & Benchmarking 2. Effect on Overrun Allowance! 3. Are KBase Estimates Lucky Shots?1 Questions & Answers 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 2 Who is ICEC.nl Holding ICEC.nl BV Estimating Consultancy Strengthening through Competence Network 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 3 1 Why? Calibration & Benchmarking Icarus KBase • Improve quality, quantity and consistency of estimates in all project phases • Improve accuracy in all project phases • Cut down estimating effort (up to 50% or more) in all project phases 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 4 Why? Estimating Tunnel 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 5 What? Definitions of Calibration & Benchmarking Calibration of KBase is………. defining Client’s standard work practices, systems and workflow, using one of the default KBase locations Reference Projects are……… Process & Utility Systems loaded in Work Breakdown Structures for Client’s typical Production Facilities to be used as “Piggybacks” to develop new estimates Benchmarking is …………….. comparing at different levels the “Reference Projects” against history or alive projects to establish accuracy in all project phases 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 6 2 What? Levels of Benchmarking Conventional Model KBase Model Comparisons Low Level High Level 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 7 What? Benefits of Calibration & Benchmarking Today using conventional (excel) tools • High usage of resources • High costs • Inaccurate cost estimates at all phases of a project • Inconsistent estimates by different engineers After introduction KBase estimating: • Overall improvement of reliability and repeatability of Estimates • Reduce hours spend and response time • Consistent estimates in an integrated workflow • 15% accurate estimates at Identification Phase • 5-10% accurate estimates during FEL\FEED • Overrun allowance can be reduced 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 8 How? Scope of Calibration & Benchmarking Project effort • Define Client’s own workpractice, systems and workflow in Templates of Design and Cost Basis • Populate Reference Projects (“Equipment Baskets”) with Client’s core process for use as “Piggybacks” • Benchmark Reference Projects at different levels against history or alive projects to improve accuracy in all project phase • Calibration & Benchmarking report and procedures for QMS • Change conventional workflow into Icarus workflow • Deliver hands-on training for advanced KBase users 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 9 3 How? Define Design Basis! 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 10 How? Define Cost Basis! 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 11 How? Populate a Reference Project! Work Breakdown Structure Defined in: -Report Groups & -Area’s 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 12 4 How? Change the estimating Process from conventional! Black out Period 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 13 How? Change the estimating Process into KBase! Black out Period 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 14 Results! Effects of Calibration & Benchmarking TIC estimate Range (for same project scope) in million EUROS <10 > 10 – < 100 >100 – < 500 KBase Out of the Box 100 % 100 % 100 % Initial KBase Estimate 50,5 % 112,1 % 95,2 % After Calibration & Benchmarking 27,7 % 147,9 % 88,1 % Contractors Initial Target Budget 24,1 % 134,5 % 104,0 % Contractors FINAL Target Budget .. % .. % 78,9 % 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 15 5 Results Effects on Overrun Allowance! 90/10 Class 4 Screening Class 3 Budget Class 2 FEED +40% Overrun Allowance Class 1 Detail When using Reference Projects, the overrun allowance can be reduced in all project phases +30% +20% 90/10 +10% 50/50 Contingency Base Activity Allowance 15% 20% 10% 5% -5% 50/50 Base 10/90 -10% -5% 10/90 - 20% 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 16 Are Icarus KBase Estimates Lucky Shots? No lucky shots, but results of continuous improvement! 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 17 Questions & Answers 1. Is there interest in sharing forces/competences to establish more standard locations in KBase? (new workgroup) e.g. - Africa - Arabic Gulf - Eastern Europe - Scandinavian - Balkan - Russia 2. Other Q&A’s 2005 User Group Meeting, Amsterdam Why Calibration & Benchmarking KBase sheet 18 6