Environmental Engineering Reference
In-Depth Information
Table 5. Determination of the strategic index (SI): Project (i)
Corporate
Ranking (a)
Project strategic
score value (b)
(a) x (b)
Strategic benefit 1.
10
8.4
84.0
Strategic benefit 2.
10
5.2
52.0
Strategic benefit 3.
9
6.8
61.2
Strategic benefit 4.
8
7.9
63.2
Strategic benefit 5.
9
5.6
50.4
Strategic benefit 6.
10
5.2
52.0
Strategic benefit 7.
6
4.3
25.8
Totals 62 388.6
The strategic index [(a) x (b)]/a = 388.6/62 6.3
The corporate ranking is the weight placed on a particular strategic benefit by senior corporate management to reflect its corporate impor-
tance in relation to other strategic benefits. Each individual benefit is also given a 'project strategic score value', representing the benefit
level within a given project. Both the ranking and the strategic score values are on a scale of 0 to 10. The SI is the weighted average of the
CRs and PSSVs.
Project (ii).
The highest risk is in department
A at -3.1. The extreme risk impact is in
department A with respect of risk element
1 at 12.3, with a degree of variance in the
appraisal team members' individual values
of 10.1%. The profile also identifies that the
highest degree of variance in the values put
forward by the appraisal team members was
with respect to risk element 5 in department
E at 13.7%.
The benefits are then assessed against each other,
in order to determine a consistency of ranking - in
other words, to make sure that the laws of transitiv-
ity have not been violated. The figures in Tables 5
and 6 are based on the agreed values determined
by each departmental manager with respect to
the strategic importance of the seven strategic
benefits determined by corporate management.
The corporate ranking is applied to arrive at a
total strategic index.
The strategic indices of the two projects show
(see Tables 5 and 6):
The strategic importance of each project is
highlighted by the strategic index of 6.3 (measured
on a scale of zero to 10) for project (i), and 5.8
for project (ii). This shows that project (i) has a
measured higher level of strategic importance
than project (ii).
Overall, project (ii) shows a lower risk profile
than project (i), but the difference is not significant.
Strategic Issues
The strategic importance of the project is mea-
sured by the strategic index. Key strategic benefits
looked for in all capital projects are identified
by corporate management and a corporate rank-
ing (CR) of '10' is given to the most important
benefit(s). All other key strategic benefits are than
assessed against the CR of the 'first' key strategic
benefit by determining how
less
important they
are to the organisation in relation to that benefit.
Environmental Issues
Finally, the project is appraised on its environmen-
tal factors in a similar manner to the SI procedure.
Key environmental factors are identified (in this
case seven factors) and the five appraisal team
