Publications

This paper is a case study on improving decision quality with regards to project sanction, by improving the existing deterministic economic evaluation workflow to answer questions such as: Did we fulfill our promise, or were we miles off? What, no production? A write-off! How could this be? Do we give the project team a bonus this year? The methodology was to: Determine the insights needed by decisionmakers to improve decision quality at the time of project sanction, and post-project, to appraise the project teams performance. Enhance the existing evaluation workflow to deliver these insights. Measure the impact of the updated workflow in terms of project proposal quality and actual project outcomes. The improvements from the simple and inexpensive workflow include: Better decision quality for project sanction, as decision-makers fully understand the risks and uncertainties of each project. Fast and focused project look-backs. Projects whose outcomes fall outside the predicted range (Miles off projects) are easily identified, as are the specific project elements that fell out of range. Fewer and better project proposals. More objective evaluation of project team performance, by comparing actual project outcomes against the predicted outcome ranges. Conclusions from this project are: Improving project sanction decisions by use of a probabilistic method is straight-forward, involves minimal additional expense, and is applicable for any company, small or large. Illumination of the entire range of project outcomes benefits all stakeholders: o Project team members quickly identify key project drivers, allowing more time to investigate ways to reduce their uncertainty. o Decision-makers understand the full range of project outcomes, so can make better decisions. This workflow can equally be applied to quantify the uncertainty in budget forecasts such as production volumes and costs.