Fluor Corporation, the multinational engineering, construction and project management firm, standardized on @RISK for cost estimation of refinery facility construction projects.
The cost of a refinery facility usually runs in the hundreds of millions of dollars but can go as high as $1.5 billion. Whatever the total costs, the budgeting for these enormous projects involves many complex engineering and materials considerations. To deal with the megabuck uncertainties in its estimates for clients, Fluor Corporation—the multinational engineering, construction and project management firm—has recently standardized on @RISK.
Waymon Lofton, who is in charge of global estimating for Fluor’s oil and gas business, says this change has brought three big improvements in the accuracy and efficiency of the global estimating process. The first is standardization itself. “Our estimators travel. They go from office to office, and the tools they would use in one place were inconsistent with the tools in the next. But their time is always valuable, and they’re always in short supply. Our goal was to have the estimators spend less time chasing around and more time estimating.”
Fluor
Next is the improved ease and speed of the model building. Before Waymon and his colleagues settled on a standard tool, they compared all the software packages on the market and found @RISK to be “the easiest with the most capabilities.” These qualities have now proved themselves over and over. The team has even used the software to develop a generic model by including what Waymon refers to as a “checklist” of costs and their variability. This has further streamlined the estimating process.
Finally, Waymon reports an unexpected benefit from standardizing on @RISK: “risk analysis within Fluor has moved up to a different level because of Palisade training on the software.” Fluor learned ways they could deal more accurately with the statistical aspects of their models. This of course made the models more accurate and reliable. Fluor can now feel confident that their second-round models leave room for only +10%, -5% error.
“We worked closely with Fluor to tailor their @RISK license to meet their needs,” says Randy Heffernan, Palisade Vice President. “Fluor is a great example of how Palisade corporate licenses can benefit many organizations – improved efficiency, greater analytical insight, and increased usage across the board.” What all these changes add up to is, according to Waymon, “a significant improvement over the way we used to do things.”