Enbridge: 4 ways to better cost estimating & benchmarking

We have always been in contact with the cost engineering team at Enbridge – before and after they decided to implement a dedicated software system for their cost estimating and benchmarking. It has been an inspiring journey that is worth sharing. That’s why we asked Prashant Srivastava, Senior Cost Engineering Specialist at Enbridge about his experiences. In our conversation, Prashant mentioned 4 important improvements associated with the implementation of Cleopatra at Enbridge.

Background info: Why Enbridge needed a project controls software in the first place?

As a player in the energy market, Enbridge needed a flexible project controls tool in order to understand and adjust costs to remain adaptable to ever-shifting energy types and different political atmospheres. Enbridge searched for the ideal tool for almost 2 years. After investigating the alternatives, Enbridge decided to use Cleopatra Enterprise.

What has Cleopatra brought Enbridge since the implementation and what are the main benefits they experience?

1. Increased project performance through Cleopatra benchmarking

You can hear many project executives talking about the importance of learning from the past projects. However, most of them don’t capture lessons learned properly. And that’s why the number drops even further when it comes to applying lessons learned in the planning of the future projects.

*Regarding usage of lessons learned, Trevino, S. A. Anantatmula, V. S. (2008)

One of the biggest desires of Enbridge was to increase the ability to capture project information from executed and ongoing projects and use it as benchmark to compare the performances on an enterprise-wide scale.

‘Once you have stored information in your database, the question is how to use it. Comparing different projects and figuring out why the costs differ. It forces us to focus and investigate a bit more before we go to our executives. We found that a great share of our project accuracy is based on this review, which is benchmarking. There are not many companies that are doing this. A good database with good information is key.’

2. Expanded and well maintained cost models

Cost models are formulas and mathematical algorithms which allow you to calculate project costs. Another goal of Enbridge was to be able to align cost models to ensure they reflect the most recent project costs. Understanding and adjusting costs in an ever-changing market place has been found challenging.

‘With Cleopatra, refreshing a project or estimate which we have done 3 years ago is very easy. We’re able to compare what the dollar of the past is worth now.’

The solution enabled Enbridge to easily expand and maintain cost models, which are the frameworks in which all costs are recorded and allocated to the activities.

‘If the construction of your project lasts from 2014 to 2016, what was the indexation/escalation? It’s very easy to convert past costs to current costs. We’re able to change the quantities and labor rates from past to current in one click with Cleopatra. That saves us a lot of time.’

If you haven’t worked with cost models before, here is an example of a cost estimation model that uses a capacity scaling method. Below you see a screenshot from Cleopatra’s cost estimating software of a take-off sheet for estimating the cost of a new plant. After choosing the type of plant (in this case, for making Polypropylene), the model automatically determines the proper capacity scaling factor. After the user enters the cost of the reference plant and capacity, the model calculates the new project cost.

3. Improved project analysis with breakdown structures

In project cost management, breakdown structures are used to ensure high project performance. A breakdown structure is a hierarchical structure in which the scope of work is decomposed. This allows for better cost allocation to activities and resources. Multiple Breakdown Structures have enabled Enbridge to create reports and breakdowns by comparing data of multiple estimates.

‘If somebody wants to know why there are cost differences between Project A and Project B, with breakdown structures they can actually go and compare at a certain level and drill down to every line item. So, our analytical capacity has really increased significantly after implementing this modern software system for benchmarking, as well as cost estimating.’

4. Integrated project cost management and centralized data

Enbridge needed a tool which could integrate project cost management disciplines and centralize data among the project teams.

‘While using Cleopatra, everything is residing on a central location. We know who’s creating which project, who has done which estimate and when it was done. So it’s all in one place. Before Cleopatra, if you set up a SharePoint or a filing structure , people were still keeping information in their drive or email. Humans are humans. So, down the line in 2 months, 3 months or a year, you were searching for information about that same project. It was a nightmare and took up a lot of our time. Cleopatra really helped us to have everything all centralized.’

These 4 improvements show you some of the benefits Cleopatra Enterprise has to offer. Are you looking to improve project cost management within your company? Then don’t hesitate to contact us.