Considering project goal feasibility in decision-making during project execution in large industrial projects

Abstract

In current practice, the feasibility of the project goal is only assessed by project owners at the start of the project, up until the final investment decision (FID) is made. The final investment decision involves the decision of the owner to continue the project into the project execution phases. After the FID is made, the project goal feasibility is no longer assessed. Traditionally it is believed that in projects all decisions are made before the final investment decision and during the project there is no requirement for additional decisions. However, in practice during the project execution phase decisions need to be made partly because of project risks and uncertainty. During the project execution phase in which the actual engineering, procurement and construction is conducted, decision-makers only evaluate the impact of their decisions on time, cost and quality criteria (together called the iron triangle) instead of on the long-term project objective, the project goal. The project goal of industrial engineering projects is to deliver a product for sale, e.g. oil, natural gas and high-volume chemicals created by an industrial asset. The construction of the industrial asset is defined in this research as delivering the project output. The construction of the asset (project output) is thereby a means to an end (project goal). Whether the project goal is feasible or not depends on whether the benefits for the owner outweigh the associated cost.