WHITE PAPER

Introduction to the
Project Definition Rating Index (PDRI)

© 2015 Valency Inc.

 www.valencyinc.com

Table of Contents
Introduction  3
What is the Project Definition Rating Index? 3
Why is PDRI Critical? 3
Who uses PDRI? 3

PDRI Methodology 4
Structure 4
When to use PDRI 4
Assessment Process 5
Scoring 5

PDRI Templates 6
Industrial Projects 6
Building Projects 6
Infrastructure Projects 6

Project-Level Benefits 7
Improved Cost & Schedule Performance 7
Increased Team Alignment 7
Transparency 7

Portfolio-Level Benefits  8
Risk Monitoring & Classification 8
Continuous Improvement 8

Getting Started  9
Needs Analysis 9
Preparing for Change 9
Initiating a Pilot 9
Growing the Implementation 9

References  10

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Introduction
What is the Project Definition Rating Index (PDRI)?
The Project Definition Rating Index (PDRI) is a methodology used by capital projects to measure the degree of scope defi-
nition, identify gaps, and take appropriate actions to reduce risk during front end planning. PDRI is used at multiple stages
in the front end planning process. As a project progresses, identified gaps will continue to be addressed until a sufficient
level of definition (measured using the PDRI score) is achieved for the project to successfully proceed to detailed design
and construction.

Why is PDRI Critical?

Poor scope definition is recognized as one of the leading causes of project failure, resulting in cost and schedule overruns,
and long term operational issues. As a result, front end planning is one of the most important processes in the construction
and operation of a capital asset. The PDRI methodology is proven to reduce risk in capital project delivery by promoting
rigorous scope definition and a collaborative review process during front end planning.

Using the PDRI methodology will help your project teams improve scope definition, become better aligned, and provide
transparency on identified gaps. This helps to equip all project stakeholders to better mitigate risks identified in PDRI
reviews, predict potential issues, and prevent costly problems down the road.

Who uses PDRI?

Owners with large capital expenditures in construction-related projects are the leading users of PDRI. The Construction
Industry Institute (CII) has benchmarked over $96 billion in capital projects (1), showing up to:

25% Cost Savings

17% Schedule Reduction

Engineering firms and contractors also use PDRI. It is used as an alignment tool in the development of an Owner’s busi-
ness objectives, to clarify requirements, improve cost and schedule estimates, and coordinate execution planning. Con-
tractors also use PDRI to assist in risk assessment for a Request for Proposal (RFP) on a project where scope definition has
been completed by the Owner or another engineering firm.

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PDRI Methodolgy
Structure
Origin of PDRI The PDRI methodology supports a comprehensive assessment of scope defini-
tion. Templates are organized in three sections for systematic assessment of the:
The Construction Industry Insti- • Basis of project decision – the business objectives and drivers
tute (CII) recognizes front end • Basis of design - processes and technical information required
planning as the single biggest • Execution approach - for executing the project construction and closeout
factor in controlling cost and
schedule overruns in capital Each section is broken down into categories and elements. The element is the
projects. Over 20 years of rese- lowest level of the index where the assessment of scope definition is conducted.
arch and development stands
behind the Project Definition When to use PDRI
Rating Index (PDRI) metho- PDRI can be used at multiple points during front end planning, and normally
dology. It is CII’s most widely coincides with the completion of a stage (Figure 1). Organizations that adopt
used tool by both Owner and PDRI as part of their project governance normally require a minimum of two
Contractor members. PDRI sessions.

Figure 1. PDRI Application Points

Early Review Final Review

Conducting a PDRI early in front end planning (e.g. PDRI-2, A PDRI-3 session should be conducted for all projects. The
end of concept stage) helps project teams in: results are a key input for project sanctioning or authori-
• early team alignment on project objectives zation for expenditure (AFE) decisions. The final review
• identifying high priority project deliverables session provides a:
• helping to eliminate late surprises in planning • PDRI total score that indicates the level of scope definition
(target is less than 200)
• list of low definition elements that remain to be addressed
• action items identified by the team to be addressed
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Assessment Process Scoring

A PDRI session is a facilitator-led meeting that is conduc- Each element is assigned a definition level between 1 (com-
ted with all key project stakeholders. For each element, pletely defined) to 5 (undefined). Elements that are not
the facilitator introduces the element requirements and applicable are scored 0 and excluded from the total calcula-
leads the group in objectively: tion. Each element’s definition level corresponds to a score
• discussing their progress on definition, based on its relative risk to project performance. The rollup of
• identifying gaps and action items, all element scores provides a PDRI total score between 70 to
• assigning their current definition level 1,000 points.

A co-facilitator (scribe) captures the element definition PDRI total score will decrease as scope definition increases
level and documents the gaps and action items identi- during front end planning of a project. CII recommends pro-
fied during the group discussion. jects proceeding to detailed design and execution achieve a
PDRI-3 score of less than 200 (2) for optimal cost and schedule
Open Industry Standard performance (Figure 2).

PDRI templates were developed by three CII rese- Typical PDRI-1 PDRI-2 PDRI-2i PDRI-3
arch teams with representation from 49 member Min 550 450 300 150
organizations. The templates were vetted and we-
ighted by 187 industry professionals, representing Max 800 600 450 250
102 organizations. CII estimates over 4,000 years
of industry experience stand behind today’s PDRI Target Score < 200
templates.
Figure 2. PDRI Score Ranges by Front End Planning Stage

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PDRI Templates
There are three industry-validated PDRI templates that are each focus on a specific
industry sector.
Greenfield & Brownfield
Considerations Industrial Projects
The Industrial template is targeted for projects that provide an output in terms of
All PDRI templates include assemblies, sub-assemblies, chemical compounds, electricity, food or other mar-
specific risk factors related to ketable goods. Examples include power plants, chemical plants, oil & gas produc-
new construction (greenfield) tion, refineries, water, waste treatment, and manufacturing facilities.
and renovation and revamp
(brownfield) projects. Building Projects
The Building template is designed for commercial building projects. Examples
Specific renovation and revamp including offices, schools, medical facilities, institutional buildings, warehouses,
issues are highlighed within parking structures and research facilities.
each element description to
ensure project teams Infrastructure Projects
specifically address these critical The Infrastructure template is targeted for projects that involve linear construc-
issues during a PDRI session. tion with extensive public interface and environmental impact considerations.
Examples include railways, highways, pipelines, transmission and distribution and
canals.

Characteristic Industrial Building Infrastructure

Primary Designer Process Engineer Architect Civil Engineer

Interface with Public Minimal Moderate Extensive

Primary Cost Piping & mechanical Building & Earthwork, struc-

equipment related systems tures, materials

Installed Equipment Cost Extensive Moderate Minimal

Land Cost Low to moderate Variable Moderate - high

Figure 3. Project characteristics to consider when selecting a PDRI template (2)

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Project-Level Benefits
Using PDRI to assess your project team’s progress on scope
definition helps identify gaps and mitigate risks that can
be addressed during front end planning, before detailed
design begins. Project teams realize many benefits.

Improved Cost & Schedule Performance

Over $96 billion (1) in capital projects have been benchmar-
ked by CII, showing cost savings of up to 25% and schedule
reductions of up to 17% (Figure 4).

Cost Performance to Budget Schedule Performance to Plan

< 200 > 200 < 200 > 200

PDRI Score
Industrial (n=128) 4% below 4% over 4% behind 10% behind

Building (n=108) 3% above 9% above 5% behind 21% behind

Infrastructure (n=22) 5% below 25% above 13% behind 30% behind

Figure 4. PDRI impact on front end planning project performance for each PDRI template

Increased Team Alignment Transparency

The facilitated project review promotes alignment between The PDRI process provides an ideal opportunity to clearly
everyone on your project team – regardless of whether you communicate project risks and action items to all stake-
represent the Owner, a consultant, or a design contractor. holders groups. PDRI results ensure everyone knows their
The assessment process promotes open communication responsibility and the actions necessary to achieve the
and allows the project team to objectively recognize poorly desired level of scope definition in front end planning.
defined element and identify action items.

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Portfolio-Level Benefits
PDRI is a proven tool to help your portfolio managers gain insight into risk for projects in front end planning. With
systematic data collection in place, portfolio managers can start to derive significant value by benchmarking front end
planning key measures.

Risk Monitoring & Classification Continuous Improvement

PDRI scores are used to monitor portfolio-level risk in front When PDRI assessments are conducted consistently across
end planning by comparing PDRI scores to target ranges for a portfolio, the process provides a comprehensive review
each stage gate. Higher-risk projects (Figure 5) are easily of front end planning performance. PDRI data is used in
identified and allow Portfolio managers to proactively mo- continuous improvement efforts to identify portfolio weak-
nitor risk responses on projects that fall below the portfo- nesses posing the greatest risk to project execution.
lio’s target level of scope definition at project authorization.

Figure 5. Use PDRI to identify higher-risk projects proceeding to execution

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Getting Started
T he greatest challenge to introducing change in
project management practices is developing an
implementation plan that provides enough detail
so that everyone understands the roadmap to
success. CII’s implementation planning model (3) is
an ideal way to develop your PDRI implementation
plan and get your organization started with PDRI.

Needs Analysis & Management Buy-in

The best place to start in building a business case for adoption of PDRI is to evaluate your specific organizational needs.
Consider performing a self-assessment on your organization’s level of maturity in front end planning best practices. A well
prepared business case is key to obtaining management buy-in for implementation of PDRI.

Preparing for Change

It is important to consider the organizational impact that PDRI will have, and identify potential change areas. Educational
courses on PDRI offered by CII Registered Education Providers are a great way to leverage lessons learned from others and
incorporate these potential change areas in your implementation plan.

Initiating a Pilot
Every successful PDRI implementation starts with a limited-use pilot. Select a small number of strategic projects that:
• represent the main types of projects in your capital program
• range in project size and current stage in front end planning (e.g. early review, final review)
• offer an opportunity to build a solid success story

Consider engaging an external Certified PDRI facilitator for your pilot. The quality of your facilitator may be the most im-
portant success factor for your pilot. Finally, develop a strong communications plan. Selling the vision is critical to getting
project stakeholders on board and attaining the success stories you’ll need to move to the next step.

Growing the Implementation

The next step is to develop and execute a plan for growth that includes a larger number of projects, groups or divisions. Key
strategies to consider as you grow your PDRI implementation include:
• developing a growth-phase communications plan,
• identifying local implementation champions,
• selecting a system that makes PDRI engaging for all project stakeholders, and
• building a training plan for PDRI facilitators, project leaders, risk/cost/schedule experts and project team members.
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References
1. “Assessment of Effective Front End Planning Processes,” Research Summary 268-1a, Construction Industry
Institute, 2013.
2. “Development of the Project Definition Rating Index (PDRI) for Infrastructure Projects,” Research Report
268-11, Construction Industry Institute, 2011.
3. “The Implementation Planning Model: Steps to Success,” Implementation Resources 246-2, Construction
Industry Institute, 2009.

About Valency
Valency is a provider of project readiness solutions to reduce risk for
organizations managing a large portfolio of capital projects. We are a
Registered Education Provider (REP) with the Construction Industry In-
stitute (CII), specializing in front end planning, portfolio management,
risk management and team alignment.

We offer a wide range of capabilities to assist organizations in getting

the most out of their implementation of the Project Definition Rating
Index (PDRI). Our solution offering includes:

Carve for PDRI

An application that simplifies PDRI implementation and
makes PDRI engaging for all project stakeholders.

Third-party Facilitation Services

Our team of Certified PDRI facilitators are veterans in indu-
strial, building and infrastructure projects.

Training Courses
Educational modules including PDRI principles & practices,
implementation best practices and facilitation training.
8 Erb St. W, Suite 200
Applied Analytics Services Waterloo, ON, CANADA, N2L 1S7
Data analysis to identify influential factors and performance Tel: (519) 883-7136 Email: info@valencyinc.com
impact of PDRI for your organization. www.valencyinc.com
www.valencyinc.com
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