We help our clients improve the return on their CapEx investments in four specific ways:
We work closely with owners/developers and contractors to achieve higher lifecycle returns for their large capital projects, in less time and with greater predictability, by moving from traditional activity-focused project and contractor management to a value maximization approach for end-to-end project delivery. We achieve this with expertise and support across the entire project lifecycle in the following key ways.
We ensure the project is fully optimized before construction begins with a sharp view on value and risk by:
We prepare for and maintain flawless execution with world class functional expertise by:
We ensure all the necessary supporting capabilities are in place by
To help companies apply the same analytical rigor to capital projects as they do to mergers and acquisitions, McKinsey has established a new approach to conduct due diligence on major capital projects. At the heart of this due diligence approach is the MIRA, which evaluates five dimensions of a capital project (technical issues, execution requirements, market factors, political and regulatory concerns, and organizational capabilities) against five readiness criteria (degree of project definition, degree of project optimization, quality of risk assessment, maturity of planning for the next stage, and adequacy of resources).
The outcome of this diagnostic is a heatmap that shows our clients exactly which parts of their projects are sufficiently advanced and which require further work. The heatmap ensures that decision making is more transparent and based on accurate facts since it highlights the critical gaps that must be addressed before the project is ready for successful execution.
Small and medium sized capital projects of less than ~$100 million can represent 20â€“40 percent of the total CapEx spend in capital-intensive industries and can represent more than 80 percent of all capital projects, yet they often receive insufficient management attention. We find that better management of this â€œsmall CapExâ€ portfolio with a rigorous value focused approach, stretching from business case and concept development all the way to execution and ramp-up, can translate into 2â€“4 percent ROIC improvement. Together with a better value maximization approach on large projects this is also a crucial prerequisite for better capital allocation at the corporate level.
Our expertise, proprietary tools, and databases that support our work are based on more than 100 capital projects engagements we do each year and a detailed understanding of best practices of the most successful Asian companies.
Additionally, we bring the full weight of our functional and industry expertise to bear on behalf of our clients, including: