Building More Value With Capital Projects: EPC Edition

Building More
Value With
Capital Projects
EPC
edition.
(EPC = „Engineering,
Procurement, and
Construction
companies“
Capital projects are somewhat digital
already… but companies struggle to
create value from data.
9 out of 10 3 out of 10
owner-operators and EPCs used of the companies reported success
average or good quality data for around many of the key performance
recently executed capital projects indicators
So clearly – there‘s more value to be had.

Where EPC companies are struggling:
Top challenges faced by EPCs while executing the most recently

completed capital project, by phase
Project phase Key challenges

Business Development Creating accurate schedule, cost and benefit estimates
Project & Contract Management Inability to integrate sustainability agenda with project partners
Managing engineering change impacts across project
Design & Engineering
supply chain
Strategic and operational issues to pursue process
Procurement
automation robotization
Fabrication Fabrication facility equipment availability issues
Construction & Commissioning Limited ability to monitor productivity and verify time monitoring
Manually intensive process to manage data exchange, validation
Handover to Operations
and loading into operational systems
Lack of feedback of asset performance back to design
Operations & Maintenance
and engineering
So, what are they
missing?
Our research points to two imperatives:
• Institutionalize data ownership and sharing; build

the right operating environment to turn shared
data into shared insight – and then into
collaborative action.
• Operationalize data and technology for decision-
making as well as delivering projects on time, and
on budget.
Our findings also indicate that most companies are

struggling with both.
How could they improve?

Introducing
„CAPSTONE“:
An action-based framework for

building more value from capital
projects through successful
data-driven digital
transformation… derived from
the best practices of the highest
preforming companies in our
sample.
Delivering up to 5.8% higher operating margins
Our data shows how +5.8%

"CAPSTONE" improves
operating margins:
0.7% 6.4%
Impact of data-driven digital 1.7%
transformation on EPCs’
operating margins:
0.5%
0.8%
2.1%
0.6%
No actions Data- Data-sharing Data- Incentive- Combined Total

committed infrastructure centric based effect
C-suite and capabilities talent contracts
Capstone part #1
Data-committed c-suite
60%
of EPC Outperformers make their CEO
or COO responsible for data-driven
digital transformation of capital
projects. Meanwhile, only 15 percent of
the EPC “Others” (companies other
than the Outperformers) adopt this
approach.
Capstone part #2
Data-sharing infrastructure and capabilities

EPC Outperformers concentrate
their investments in technologies FIGURE: Capabilities for improved efficiency and visibility
Top 2 advanced digital capabilities deployed for executing capital projects by
that allow them to make the most Outperforming EPCs
of the data foundation put
together by the owner-operators. Project phase Top two digital capabilities deployed
across project stages
The top technologies where they
Business Origination | LCOE optimization
invested over US$10 million each
| Bidding & tendering automation
during the period 2015 to 2019
include: IIoT tech and sensors, Engineering & | Cognitive supply analytics
Procurement
design automation, cloud, | Software verification of design
robotics process automation. Project & Contract | 4D/5D planning & monitoring
Management
| Automated period-end/close-out
Their key digital capabilities by
project phase: Constructive & | Drone reality capture/automated progress
Handover to Operations detection
| Material track & trace
Capstone part #3
Data-centric talent
Outperforming-EPCs ready an
army of digital coaches who work FIGURE: Tackling strategic issues using data-driven insights
Top 2 types of data leveraged by project teams from Outperforming EPCs
closely with their office-based and
on-ground teams to help them
Project phase Data types used to generate insights
effectively deliver and execute
the project efficiently with data-
Business Origination | Cost
driven insights.
| Skills
Our survey also shows that as Engineering & | Historical reliability

many as 60 percent of the EPC Procurement
| Equipment specs
Outperformers entrust their
Project & Contract | Schedule management
contract managers with the Management
| Lessons learned
responsibility of upskilling the on-
ground workforce and nearly 45 Constructive & | Cybersecurity incidents
Handover to Operations
percent give this responsibility to | Productivity
their project managers.
Capstone part #4
Incentive-based contracts
What’s in it for EPCs?:

Given that incentive-based contracts require EPCs
Our survey shows that to get on board early in the project, they can start
over a fifth identifying and cementing data-driven partnerships
with suppliers and sub-contractors aligned to the
of the Outperforming EPCs
currently engage in incentive-
project goals. EPCs can form a focused and aligned
based contracts. project network, committed toward delivering the
financial KPIs of the project, and the broader
environmental or societal goals to be achieved by
the owner-operator.
Intrigued by CAPSTONE?
Read the full report!
PDF link
Authors About Accenture
Tracey Countryman Accenture is a global professional services company with
Strategy & Consulting, leading capabilities in digital, cloud and security. Combining
Industry X Europe and Digital unmatched experience and specialized skills across more than
Manufacturing & Operations Lead 40 industries, we offer Strategy and Consulting, Interactive,
Technology and Operations services—all powered by the
Raghav Narsalay world’s largest network of Advanced Technology and Intelligent
Operations centers. Our 506,000 people deliver on the promise
Accenture Research,
Industry X Global Research Lead of technology and human ingenuity every day, serving clients in
more than 120 countries. We embrace the power of change to
create value and shared success for our clients, people,
Andy Webster shareholders, partners and communities.
Strategy & Consulting, Visit us at www.accenture.com
Industry X Capital Projects Global Lead
Preeti Bajla
Accenture Research,
Industry X Associate Principal
Franz-Josef Pohle
Strategy & Consulting,
Industry X Capital Projects ASGR Lead Building

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Building More

So clearly – there‘s more value to be had.

Top challenges faced by EPCs while executing the most recently

Project phase Key challenges

• Institutionalize data ownership and sharing; build

Our findings also indicate that most companies are

How could they improve?

An action-based framework for

Our data shows how +5.8%

No actions Data- Data-sharing Data- Incentive- Combined Total

Data-sharing infrastructure and capabilities

Our survey also shows that as Engineering & | Historical reliability

What’s in it for EPCs?:

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