Decision-Support-Package-Guidelines.pdf

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Decision Support Package Guidelines

© 2012 Chevron Corporation - All rights reserved. Company confidential - for internal use only. Page 1 of 12

Project ResourcesCompanyDecision Support Package Guidelines

Date Description Revision By

8/27/12 Original upload to CPMS SharePoint George DeVore

Document Control Number

Project Area Discipline Type Originator Package Sequence Sheet

MCP 4600 PD_ MAN PRC 0000 00407 00

© 2012 Chevron Corporation - All rights reserved. Company confidential - for internal use only

This document contains confidential and proprietary information for use by employees and authorized agents ofChevron Corporation and its affiliates (Company). No other use is authorized without prior written permission fromChevron Corporation or its appropriate affiliate.





Decision Support Packages

The purpose of this section is to provide guidance regarding development of appropriate

Decision Support Packages (DSPs) for Major Capital Projects. A DSP summarizes

project deliverables to support key project decision making, such as whether to move a

project into the next CPDEP phase. The key customer is the project Decision Executive(DE). A DSP also summarizes the work completed, the key decisions made, and the

rationale for those decisions, which are useful for purposes such as onboarding newDecision Review Board (DRB) members.

This material has been updated (see date in filename in footer) and is the source forsection 4.6 on DSPs in the PM Handbook.

When Does the Project Need a DSP?

Major Capital Projects generally need a DSP for the key project decisions that will bereviewed by the DRB and made by the DE, including:

1. All phase-gate decisions.

2. Other key milestones and strategic decisions, for example, the selection of the

preferred alternative in Phase 2.

The project manager should have a discussion with the DE, agreeing which decisions will

require a DSP and clarifying expectations regarding what information the DE and DRB

will need to support those decisions.

Characteristics of a Good DSP

A good DSP is both clear and thorough. This means the reader will be able to understand

the information in the DSP without referring to other documents. Other documents will

be needed to provide more detail, but the DSP should stand alone as a document providing the key information to support decision making. In general, the DSP is not a

set of PowerPoint slides. Slides, while useful for presentations, are neither an adequate

nor an appropriate format for a DSP.

A simple and effective format is to present the DSP in three sections:

1. An executive summary that clarifies the decision(s) the DSP is addressing and

presents the recommendations with key supporting reasoning. This is typically no morethan about one page.

2. The primary documentation supporting key deliverables and decisions.





3. A list of supporting documentation and other deliverables for reference in case a

reader needs further information. For example, DRB members will typically need to dive

deeper into their functional areas.

DSP content will vary from phase to phase and with the size and nature of the project.

Examples of DSPs can be found on the CPDEP Web site. Project ManagementHandbook Section 3.5, Phase-by-Phase Description, provides a high-level listing of

phase-appropriate deliverables. Chapter 2, Chevron Project Management System,

provides a comprehensive listing of expectations by phase.

Developing the DSP

The following figure and discussion provide a high-level process for developing a good

DSP.

Development and Application of the DSP





Project Execution Planning and the DSP

As part of project execution planning, the project team is expected to identify all key

decisions, and the sequence of those decisions, needed in the next phase, as well as

identify deliverables needed to support the making of those decisions. With the Project

Execution Plan (PEP) objectives and strategies, the detailed plans, and the schedule, the project team will have a comprehensive set of plans to accomplish these deliverables.

Identify DE/DRB Level Decisions Which will Require a DSP

The project manager should discuss with the DE and agree which decisions will be made

by the DE, and for which of those decisions the DE wants to engage the DRB. Each of

these key decisions will require some type of DSP.

Outline the Information Needed for Each DSP

Early in each CPDEP phase, the project manager should engage the DE and DRB in

discussing and agreeing to the expectations for the DSP for the next phase-gate decision,as well as for intermediate DE/DRB level decisions.

Extract the Information Needed for Each DSP

As the work progresses, the project team can extract information needed from maturedeliverables into the DSP. With this approach, little “extra work” will be needed to

produce a high-quality DSP.

Keep the CPDEP principles in mind when preparing your DSP:

• Decision driven — Keep the DSP focused on the information that is necessaryand sufficient for the decision makers to make the required decisions.

• Focus on key value drivers — Focus the DSP on describing the potential value ofthe project, including the associated risks and tradeoffs. When including detailed

information and analysis, whether historical, technical, commercial, oroperational, make it clear to the reader how that information contributes to the

project’s value and understanding of the risks.

• Use of integrated multifunctional teams — The DSP represents the key results ofthe entire integrated multifunctional team.

• Effective input, communication and alignment between teams, decision makers,

and stakeholders — the DSP is a tool for communication and alignment.• Consistent use of best practices and tools — Demonstrate the use of these

practices and tools, especially in conjunction with the focus on value.

Review the GO-36 (Appropriation Request) documentation and examples when preparing a DSP. This is not to say that preparation of the GO-36 should be left until

DSP preparation. To the contrary, teams should be encouraged to make an early start in

GO-36 preparation, and hold a final review when the DSP is being put together.





Keep in mind that the DSP serves as a reference for project lookbacks, in both CPDEP

Phase 4 and Phase 5. By documenting the thinking and data behind a project decision,

the DSP will allow a lookback team to assess the quality of the decision relative to the project outcome. It will provide a means for interpreting when a good, or bad, outcome

is due to chance, rather than good or bad decision making. It will provide the basis for

decision process improvement and meaningful accountability.

DSP Content DSP content will vary from phase-to-phase and with the size of the project. This sectiongives guidelines for the minimum requirements for DSPs for major capital projects.

Example DSP table of contents are listed on the last two pages of this guide.

Phase 1 DSP Minimum Requirements

The key decision at the end of Phase 1 is about whether to proceed with generatingalternatives. We need confidence that the opportunity is framed well, strategicallyaligned with our business, and that the business case supports committing the resources

needed in Phase 2. The Phase 1 DSP needs to provide the information to support these

decisions and typically includes the following:

• Framing Document

A Strategic Framework Document summarizing the insights from discovery

(strategic fit, project complexity, and the business and competitiveenvironment)

A Framing Document summarizing the results from definition and structure (For suggested content, please refer to the Framing Practice Area on the

CPDEP Web site.)

• Preliminary Assessment

An alternative to serve as the basis for the Phase 1 economics

A reference case which reflects the current operating plan for the asset or business without the investment proposal (to correctly estimate the value

created by an investment proposal)

Preliminary economics, including cost estimate and revenue estimates

A summary of the lessons gathered from relevant projects (such as analogs to

other assets)

• Preliminary Overall Plan

Sequencing of project strategic decisions

Preliminary overall project schedule





PEP for Phase 2 as a reference

• Summary of the key issues regarding the Project Execution Plan for Phase 2, suchas staffing and resources

• Other optional components

Summary of the Phase 1 PReP Assessment


The key decisions at the end of Phase 2 are about whether to approve the selection of the

preferred alternative(s) and to proceed with development of the preferred alternative(s).

The Phase 2 DSP needs to provide the information to support these decisions andtypically includes the following:

• Framing Document reflecting any revisions made during Phase 2

• Description of the short list of alternatives that were given significantconsideration (depending on the number of alternatives considered, you may wantto provide a list of all alternatives considered)

Consistent level of detail in the cost estimate for each of the viable alternatives

considered to ensure consistent evaluation

• Description of the rationale for the selected alternative(s)

Summary of the deterministic and/or probabilistic analyses of the alternatives

sufficient to support the selection of the preferred alternative

Other less-quantitative analyses (e.g., stakeholder analysis, market analysis, fitwith base business)

Preliminary Basis of Design for the preferred alternative

Summary of risk and uncertainty management plans describing key factors that

could significantly affect project outcomes with planned mitigations

Documentation of the team’s perception of decision quality (DQ Spider

Diagram), along with a description of the gaps, and why this level of decisionquality is appropriate for this decision, specifically address the quality of the

data affecting the top few uncertainties from the Tornado Diagram

• Preliminary Overall Plan

Sequencing of project strategic decisions

Preliminary overall project schedule





PEP for Phase 3 as a reference

• Class 2 cost estimate on the preferred alternative

• Summary Estimate and Schedule Assurance Review findings,

•

Summary of the key issues regarding the Project Execution Plan for Phase 3• Project Management Practices and VIPs

Summary of efforts to seek and incorporate lessons learned

Summary of the phase 2 PReP Assessment

Peer Review Report (including team’s responses)

Summary of the key VIPs applied and the benefits


Peer assist information, if peer review was not required

Results of an FEL Pacesetter evaluation, if one was done

Subsurface Technical Review results, if needed


The key decisions at the end of Phase 3 are about whether to approve funding and proceed with execution. The Phase 3 DSP needs to provide the information to support

these decisions and typically includes the following:

• Fully defined scope reflected in the Basis of Design Lockdown

• Class 3 cost and schedule estimates, along with summary findings of the Cost andSchedule Risk Assessment

• Project Management Practices and VIPs

FEL Assessment and cost & schedule benchmarks

Summary of efforts to seek and incorporate lessons learned

Summary of the phase 3 PReP Assessment

Summary of key VIPs applied and the benefits

• Sequencing of project strategic decisions

• Summary of the key issues regarding the Project Execution Plan for Phase 4,including a description of the contracting strategy

• Summary of the integrated project plan and schedule for Phase 4






Outcomes of any pilot projects

• Phase 3 Peer Review Report

• Reference Documents:

PEP for Phase 4 GO-36 funding request and supporting documentation

Economic analysis as required in the Corporate Investment Analysis Manual

Summary of the decision analysis

Summary of risk and uncertainty management plans

Phase 2 Peer Review Report, with summary of actions taken to close

identified gaps

Documentation of the team’s decision quality (DQ Spider Diagram), along

with a description of the gaps, and why this level of decision quality is

appropriate for this decision

Phase 4

The key decisions at the end of Phase 4 are quite different from earlier phases. At the

end of Phase 4, we need documentation to support the handover to operations, to support project lookbacks, and to close out the project. These documents do not constitute a

DSP; rather they meet specific needs for which you will find more information in the

Project Management Handbook.





DSP Table of Contents Example 1, organized by the 6 elements of DecisionQuality

The example below is appropriate for Phase 2 DSPs, and DSPs for most intermediate decisions.

Table of Contents Description Page

1. Executive Summary Purpose of this DSP – the decisions to be madeProject team recommendations

2. Frame Summarize the information needed to demonstrate that theproject is appropriately framed, and provide a link or referenceto the full project framing document.

If this DSP is for an intermediate decision, provide anyadditional information needed to frame the specific decision(s)to be considered.

3. Alternatives Summarize the alternatives considered to demonstrate that anadequate range of creative, doable alternatives have beenconsidered. Summarize each alternative sufficiently to enabledecision makers to understand the scope of each. Provide a link

or reference to full descriptions of each alternative.

4. Meaningful, ReliableInformation

Summarize the information most relevant in the analysis, anddemonstrate that the appropriate level of meaningful, reliableinformation was used, including the key uncertainties and risks.

5. Values and Trade-offs

Summarize the results of the evaluation to clarify (and quantifywherever possible) the tradeoffs. This includes rationale for therejection or acceptance of the alternatives, presentation of cost& schedule, NPV & DPI, s-curves, etc.

6. Logically CorrectReasoning

Summarize the analysis and the analytical models todemonstrate that:

• The DA model is reliable, appropriately modeling the

opportunity.• The ranges of inputs are appropriate and unbiased.

7. Commitment toAction

Provide information to demonstrate the level of commitment toaction of the key stakeholders.

8. Project TeamRecommendation:the PreferredAlternative

Provide further information regarding the Preferred Alternative,as appropriate.

9. Project ExecutionPlan

Summary of the project execution plan, including the projectexecution planning approach, the road map, the objectives &strategies document, the project schedule, project organization

and resources.Provide a link or reference to PEP documents, including detailedplans.

10. Project Assurance Summary of project assurance activities, and information toindicate how findings have been adequately addressed.

Appendix As needed, link or reference to other project documentation






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DSP Table of Contents Example 2, organized by topical area, for Phase 3 DSPs


1. Executive Summary Purpose of this DSP – the decisions to be made

Project team recommendations

2. Project Frame Summarize the project frame, and provide a link or reference tothe full project framing document.

3. Project Background Summarize the background and history of the project up to thispoint.

4. Description of theRecommendedDevelopment

Summarize the recommended development scope. Include theintegrated basis of design and a description of each element ofproject development scope.

5. Concept Selection Summarize the alternatives considered, the rationale for therejection or acceptance of each alternative, and project teamrecommendations regarding Phase 3 development decisions.Provide sufficient information for decision makers to assessdecision quality.

6. CommercialAgreements

Summarize the status of commercial agreements, as appropriatefor the project.

7. Marketing Summarize the status of marketing arrangements, asappropriate for the project.

8. Development Costs Summarize the project development costs, along withinformation to clarify the class of estimate and the ranges ofuncertainty.

9. Schedule Summarize the project schedule, along with information toclarify the ranges of uncertainty.

10. Economics Summarize the project economics.

11. Risks &Uncertainties

Summarize the project risks & uncertainties.

12. Project Approvals Summarize the plans for attaining project approvals & fundingfrom all partners, as appropriate for the project.

13. Project Assurance Summary of externally conducted project assurance activities,and information to indicate how findings have been adequatelyaddressed.

14. Project ExecutionPlan

Summary of the project execution plan, including the projectexecution planning approach, the decision map, the objectives& strategies document, and the project schedule.

Provide a link or reference to PEP documents, including detailedplans.

15. OrganizationalCapability

Summarize the project organization and resources for Phase 4.

16. HES Management Summarize how the project will execute an incident and injuryfree project.

17. Operations Summarize the plans for effectively transitioning the project toPhase 5 operations.




© 2012 Chevron Corporation - All rights reserved. Company confidential - for internal use only. Page 12 of

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Appendix As needed, link or reference to other project documentation.