Using Business Cases and Triple Bottom Line Analysis to Manage and Prioritize CIP Investments

Last Modified: Jan 17, 2019

Authors:

  • Aditya Ramamurthy PE, PMP, Russ Dalton PE, PMP - Hazen and Sawyer
  • Adrianna Dimperio PE - Newport News Waterworks

Newport News Waterworks desired a best-in-class CIP project prioritization and planning process that ensures a rational and sustainable CIP while responding to the business needs of both Waterworks and its key stakeholders. Waterworks has implemented an integrated, triple-bottom-line based business case evaluation-focused capital planning and prioritization process.

Newport News Waterworks is a regional water provider, owned and operated by the City of Newport News and serves over 400,000 residents in the Hampton Roads area. NNWW owns and operated two Water Treatment Plants and a distribution network (2,000 miles) including raw water and finished water pumping infrastructure.

This presentation will describe in detail the business case evaluation approach to capital prioritization and planning that Newport News Waterworks developed in 2018. This business-oriented and financially-driven CIP planning process focused on project prioritization through the use of detailed business case analysis and the utilization of cross-functional teams and committees to ensure a balanced perspective on capital planning and infrastructure management issues necessary to drive organizational change. The policies, procedures, and processes designed as part of this effort helped to ensure that optimal capital projects were selected and implemented consistent with quality asset management practice. Documentation and extensive staff training of the business case evaluation methodology ensured that this methodology was utilized in a consistent manner across all Divisions of the organization.

This project included numerous workshops with stakeholders from across the organization to ensure that all perspectives were considered in the evaluation and prioritization of capital projects. Eleven (11) evaluation criteria that incorporated both the probability of failure (Asset Condition) as well as the consequence of failure (Criticality) were identified and defined as part of this effort. The Triple-Bottom-Line framework enabled the business case evaluation methodology to evaluate all capital projects through a social, environmental as well as financial lens.

Key outcome of the effort was the development of a well-defined methodology and process through which Waterworks can plan and update its CIP on an ongoing basis using the tools, templates, and techniques learned and applied throughout the project.

  • Greater understanding of the long-term service level and cost implications of capital investment decisions
  • Greater understanding of the true life-cycle cost of capital projects
  • Establishment of a standard framework to evaluate treatment plant (vertical) as well as distribution system assets
  • Strengthened long-term financial decision making
  • Ensured that all stakeholder perspectives are considered.
  • Enabled effective change management
  • Fostering a culture of collaboration & communication throughout the organization.
  • Creation of improved trust, understanding, and transparency
  • Established to integrate with the proposed Project Management Enterprise System
  • For more information, please contact the author at aramamurthy@hazenandsawyer.com.

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