Working in capital projects for the past decade, Enstoa has developed a suite of metrics to help capital-intensive companies: 1. To better understand how well their capital program is delivering value. 2. To provide insight into performance trends. 3. To identify areas of improvement we use ROCE as a proxy for measuring project excellence in organizations and gauge a company’s capital effectiveness and efficiency. Looking at this in a little more detail, we see that increasing the overall ROCE can be impacted by many factors around a company’s asset base.

1. Capital Projects Efficiency
Maximizing Revenue From
Capital Expense

2. 2
Capital Projects
KPIs
Working in capital projects for the past decade, Enstoa has developed
a suite of metrics to help capital-intensive companies:
• To better understand how well their capital program is delivering value.
• To provide insight into performance trends.
• To identify areas of improvement we use ROCE as a proxy for measuring
project excellence in organizations and gauge a company’s capital
effectiveness and efficiency. Looking at this in a little more detail, we see
that increasing the overall ROCE can be impacted by many factors around a
company’s asset base.

3. Maximizing
Revenue From
Capital Expenses
Schedule performance of capital programs has a considerable
influence on a company’s ROCE, particularly on revenue and capital
expense.
Business cases around projects are built with certain assumptions in
mind, like:
• When the project will be completed, and the asset turned over to
operations.
• What is the revenue profile for the life of the asset produced by the project?
• How business climate and changing conditions can affect the assumptions of
the productivity of the asset.
• When a project’s schedule is delayed, it is not only the revenue stream which
negatively impacts ROCE delay, but also the changes to the in-service timing
and corresponding business environment can undermine the basis of the
project’s business case.

4. 4
Maximizing Revenue From Capital Expenses
Achieving In-Service Dates
• As a part of the Key Metrics and Predictors program, we look at how accurately an organization can forecast an asset’s
In-Service Date based on actual project performance.
• This metric is characterized by division and business unit, along with other project attributes to identify performance
standards for the organization.
• This data helps uncover opportunities for improvement in project excellence by introducing processes to reduce
variability and to improve performance.

5. About the author
Michael Goggin is a Director at Enstoa. His passion for analysis is grounded
in data and aims to uncover actionable intelligence in Capital Programs.
Connect with Michael here.
Read Key Metrics & Predictors for more insights.
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