Streamlining capital project delivery by sharpening organizational focus on process and oversight

Client's challenge:

A major utility prepared to invest more than $10 billion over five years for major capital infrastructure projects including the construction of new power plants, upgrades of existing facilities, and new environmental projects. These projects were not only ambitious for the client, but also for the entire industry. Most utilities had not funded capital projects to this extent at any time in the past decade. Adding to the complexity were new environmental regulations. Without an organizational structure or appropriate procedures in place for projects of this magnitude, it was no surprise that the utility’s audit committee of the board of directors called for improvements to be made in the capital project team’s ability to complete the large-scale billion-dollar program successfully and in a well controlled environment.

The utility turned to PwC to identify key risks facing the organization and for help in establishing more rigor around its capital projects policies, procedures, organization and methodologies. Though PwC’s recommendations focused on the capital projects at hand, they also would be applied to the utility’s overall capital program strategy.

PwC's Advisory solution:

PwC's Capital Project Services Team worked closely with the utility to break down project management into core components across the project lifecycle, including:

  • Procurement & Contracts
  • Schedule Management
  • Cost Management
  • Scope and Change Control
  • Human Resources
  • Risk Management

After the initial review, PwC assessed the key issues across each of these elements and tracked those throughout the cycle. In addition, we guided the client’s implementation of:

Cohesive internal structures.  The first process-improvement opportunity was the organizational structure. We recommended that the company establish a Corporate Oversight Group for capital projects management. This would integrate key management functions that, under the existing structure, were spread across the enterprise. Another consideration was that the client had both regulated and non-regulated aspects of the business which created a lack of consistency.

Operational efficiencies.  PwC recommended a more consistent and streamlined approach to the creation of policies, procedures and systems – specifically, eliminating unnecessary redundancies, establishing roles and responsibilities of the various offices – and setting a solid foundation for ongoing project management.

PwC participated in the planning, design, implementation, and operations of the utility’s capital projects process steps. And, at each point in the project lifecycle, PwC assessed the utility’s progress toward its short- and long-term goals.

Impact on the client's business:

A significant result of PwC’s work with the utility had been fostering a shift in organizational thinking about capital projects. With the company’s Corporate Oversight Group – comprising key stakeholders, skill sets, and roles – in place, the utility is now focused on aligning the right skills and leaders with the goals of capital projects. Now, the company sets expectations at all levels so those involved in the project are on the same page from the outset. What’s more, PwC guided the client’s management team toward an approach that includes careful thinking around policies and procedures and adequate consideration of risks at each point in the process.  PwC also had extensive interaction with the utility's audit committee of the board of directors during this project and provided an independent assessment to the committee with respect to the Utility's construction management processes and polices compared to leading industry practices.