Development Projects: How Not to Leave Too Much Money on the Table
How improving your management practices will reduce the risk of suboptimal NPV / IRR
In the resources industry, a Development Project is the result of an organisation seeking to exploit a latent asset, usually a resource body.
To make such projects work, optimal business outcomes are required to satisfy all stakeholders involved. This is usually achieved during the feasibility study, when scenario modelling is conducted (sometimes referred to as options analysis).
But here's the thing: NPV and IRR are locked in very early and virtually impossible to influence once the feasibility phases have been completed.
Optimisation needs to be done at this very critical phase and there is no recourse for getting it wrong.
Flawless teamwork is not a nice-to-have, it is essential. Facilitating team collaboration using a combination of traditional project management and Agile Methodologies, Kanban boards and option trackers are the key. Furthermore, using cutting edge modelling platforms, which can efficiently calculate the most attractive scenarios from a host of options using Value Driver Trees (VDT), Monte Carlo Simulations and more is paramount.
These projects require the smooth integration of teams across a number of disciplines: engineering (mining, metallurgical, chemical, civil, electrical, mechanical and environmental), geosciences, finance and others. Anyone who has ever managed such diverse teams knows how hard that is.
This paper provides insight on these topics.