Braskem’s Project and Portfolio Management

Contini, Tiago

Speaker Bio

Tiago is Telecom Engineer and Certified Associate

in Project Management (CAPM) with over 5 years of

experience in IT Project Management and 4 years

of experience in PMO

In his current role as PMO Member at Braskem,

Tiago is responsible for CA Clarity™ PPM

administration and for the Process of Portfolio

Management

Before joining Braskem, Tiago worked several

years, managing IT support teams

Summary

About Braskem

Scenario before CA Clarity PPM

Braskem’s processes and requirements

Idea Management Processes

Project Management Processes

Portfolio Management Process

Scenario with CA Clarity PPM

Brazilian Petrochemical Company

3rd generationExtraction 1st generation 2nd generation1st generation 2nd generationExtraction 3rd generation

Competitive Integration

Added Value

Competitiveness

#1 Petrochemical company of Latin

America

MarketLeadership

Scale Integration

Cost Competitiveness

Know-How

Technological Autonomy

Naphtha

Condensate

Thermoplastic Resins Plastic ConvertersRaw Materials Basic Petrochemicals

18 Industrial Units

São Paulo

PVCSpecialties

Alagoas

Chlorine / Soda PVC

Triunfo

Bahia

HDPE / LLDPE HDPE/UHMWPE

Chlorine/Soda

PVCBasic Products

HDPEHDPE

PolypropylenesBasic Products

LLDPELDPE

LDPE / EVA

LDPE / EVA

Polypropylenes

HDPE/LDPE/LLDPE

Polypropylenes

Economic – Financial Performance

Source: Braskem

Gross Revenue

R$ 23,0 bi

Net Revenue

R$ 18,0 bi

EBITDA

R$ 2,4 bi

Exports

US$ 2,2 bi

Innovation and Technology

R$ 70 million in innovation projects in 2008

Over US$ 330 million in assets

169 researchers

219 patents filled

8 pilot plants

17% of the revenue obtained in 2008 by resin sales is due to products launched in the market in the last 3 years.

1st company in the world to certify a 100% renewable polymer

Innovation and TechnologyGreen Polymers

POLYPROPYLENEPOLYETHYLENE

Awards

High Level of Corporate Governance

Level 1 of Corporate Governance at BOVESPA

100% tag-along for shareholders

Compliance with SOX

Code of Practice: Establishes values, principles and practices that regulate the company’s actions

Ethics Committee

Internal Audit

Pre-established corporate policiesNegotiation of estate valuesFinancial ManagementInsurance and GuaranteesHealth, Safety and EnvironmentSocial Responsibility

CommitteesFiscal CouncilFinances & InvestmentPeople & OrganizationStrategy & Communication

Incentive Plan, allowing to align interests with value generation

Four independent members in the Council

Information system for the Administration Council and the Fiscal Council

New ProjectsGreen Polyethylene

Ethylene-alcohol: Commitment to Sustainability

Construction start / Cornerstone: April 2009Pilot Plant Production: ~ 12 mt/yearOperation start: 2011Investment: R$ 488 millionPlant of ethylene from 200 Kt ethanolEstimated demand: ~ 500 KtEthanol consumption: 460 million litersTarget markets: United States, Europe and JapanIndustries: Auto parts and consumables

100% renewableraw material:

Sugar cane ethanol

Partnerships withnational and multinational

Food, auto parts and cosmetic sectors

1,200 kton PEVenezuela

300 kton PPCamaçari450 kton PP

Venezuela

350 kton PPPaulínia

200 kton PVCAlagoas

200 kton Green PERS

130 kton Special SolventsCamaçari

Camaçari30 kton HC Resinas

Source: Braskem

Projects in evaluation:

• Peru – PE/ Ethylene cracker

• Bolivia – PE/ Ethylene cracker

• Brazil – PE- PP/ Heavy oil cracker

GrowthInvestments

Braskem

Vision: evidence in the global scenario:Presence among top 10

2012

2002

20062007

2005 2008

Source: Braskem

Trikem

PolialdenPoliteno

Ipiranga /Copesul

Paulínia

Become leader inthermoplastic resins

in Latin America

Be among the top 10petrochemical companies

in the world inmarket value

Revision of2012 Strategy

Revision of2020 Strategy

2009

Petrochemical Triunfo

Sumary

About Braskem

Scenario before CA Clarity PPM

Braskem’s processes and requirements

Idea Management Processes

Project Management Processes

Portfolio Management Process

Scenario with CA Clarity PPM

Scenario before CA Clarity PPM

Well defined processes: ideas, project and portfolio management;

40 portfolio evaluation variables;

Excel basis tool;

The Challenge

Find a software that meets all Braskem’s requirements and needs.

Five small portfolios (by business unity) and one big portfolio (all Braskem);

To much time from portfolio inventory to portfolio approval;

Decentralized Management over all the portfolio process (inventory, approval and

following);

Low control over Project Management (cost, time, scope changes, etc.);

Summary

About Braskem

Scenario before CA Clarity PPM

Braskem’s processes and requirements

Idea Management Processes

Project Management Processes

Portfolio Management Process

Scenario with CA Clarity PPM

Braskem’s Processes and Requirements

ProjectManagement

FEL 1Business

Assessment

FEL 2Conceptual Engineering

FEL 3Basic

Engineering

ExecutionDetailed Construction

Engineering

OperationPerformance Evaluation

EA

DR1

EA

DR2 DR3

ExA

DR4 DR5

Engineering Approval Capital Approval

Braskem´sRequirements

• Support all Processes (workflow approbations);• Centralized Management to all Processes;• Centralized and secure Data Base;• Easy to use;• Information on demand (correct and fast);

• Graphical Analysis;• Multi-user operability and Web based application;• All world support;• Over 600 projects a year (over MMU$ 670);• According to PMI Process;

PortfolioManagement

InventoryCategorization

Small (BU)Portfolio

Evaluation and

Balancing

Braskem’s Portfolio

Evaluation and

Balancing

Braskem’s Portfolio

Authorization

Braskem’s Portfolio

Reevaluation

IdeaManagement

InventoryIndividual

Approval

Ideas

Portfolio

Approval

Project Management

Sumary

About Braskem

Scenario before CA Clarity PPM

Braskem’s processes and requirements

Idea Management Processes

Project Management Processes

Portfolio Management Process

Scenario with CA Clarity PPM

Idea Score

Inventory

CA Clarity PPMIdea Portfolio Management

Individual Approval

(Workflow at Clarity)

Idea Portfolio Approval

(Graphical Analysis)

CA Clarity PPMIdea Portfolio Management

ProjectManagement

CA Clarity PPMProject Management - Centralized Data Base

Project Charter

Project Name;

Project Number;

Project Scope;

Project Objectives;

Project Category;

Project Start and End Date;

Braskem Project Unit;

Project Manager;

CA Clarity PPMProject Management – Project Life Cycle

All phases (FEL1, FEL2, FEL3, EXECUTION, OPERATION) and gates (DR1, DR2, DR3, DR4, DR5)

using Clarity action items and Workflow.

CA Clarity PPMProject Management – Engineering Approval

Electronic Approval using Clarity forms, action items and workflows.

CA Clarity PPMProject Management – Document Management

CA Clarity PPMProject Management – Project Team

CA Clarity PPMProject Management – Scope Changes Control

Registry

Change Aprovation

(Clarity Workflow)

CA Clarity PPMProject Management – Capital Approval

Electronic Approval using Clarity forms, action items and workflows.

CA Clarity PPMProject Management – Time Management

CA Clarity PPMProject Management – Cost Management

CA Clarity PPMProject Management – Cost Management

Budgeting and forecasting by WBS

Responsabilities

BU CorporativeAreas

Project Categorization

Small PortfolioAnalysis

Braskem’sPortfolioAnalysis

Braskem’sportfolioapproval

ProcessReview

Project SponsorProject

Identification

BU Portfolio Manager Validatinginformation

PortfolioAnalysis

Business UnitsComitee

PortfolioApproval

PMOProcess

Revision (ifnecessary)

Braskem’s PortfolioAnalysisBU support

PMO PortfolioManagement Business Unit Support

ExComiteeStrategicPlanningDefinition

Braskem’s PortfolioApproval

Definition of Budget Restrictions

Portfólio Day

PMO Follow-UP

PortfolioBalancing

Process Steps

Portfolio Management Process Overview

Bucket 1 - Projects which primary motivation is to increase profitability or competitiveness of Braskem.

Increase Profitability / Competitiveness

Risk Mitigation /Operational

Continuity

Infrastructure and Support

Strategics

Special

Bucket 2 - Projects which main motivation is to reduce risk and operational

continuity.

Bucket 3 - Projects which main motivation is infra-structure

Bucket 4 - Projects to create new levels of cash flow.

Bucket 5 - Investment needed to develop basic engineering.

Braskem Methodology has five types of Buckets to evaluate different as well:

Portfolio ManagementBuckets

Portfolio ManagementCharacterization

The systematic prioritization has two main elements:

Buckets - Grouped projects with similar characteristics;

Dimensions – Forms the basis of comparison between projects;

Description Motivation Content

Elements of comparison

projects

Allow investments to be compared in many aspects

Criteria and parametersDimensions

Sets of comparable projects Difficulty of comparing ProjectBuckets

Portfolio ManagementScoring

Dimensions

Project Basic Information

Project Brief Description

Project Team

Timing

Strategic Leverage Score

Keep?

Market Attractiveness

Marketing Feasibility

Technology Attractiveness

Technical Feasibility

Financial

Dimensions Keep?

Balance

…

…

…

…

…

Are there any dimensions,other than what was in theportfolio tool, that should

be considered?

List of Dimensions

…

Project Basic Information

…

…

…

…

…

N/AProject Status

N/AProject Stage

N/AProgram Type

N/AProcess

N/AProject Name

ImportanceRisk?Criteria: Project Basic Information

N/AProject Status

N/AProject Stage

N/AProgram Type

N/AProcess

N/AProject Name

ImportanceRisk?Criteria: Project Basic Information

Is the criteria used in theStrategic Portfolio Management

tool relevant and calibrated?

Risk Importance RangeYes No Low (L), Medium (M), High (H)

Strategic Leverage Score Parameters

1. Congruence

3. Proprietary Position

4. Durability

5. Synergy with other operations within the corporation

2. Impact

Only peripheral fit with business

strategies

Modest fit, but not with a key element

of strategy

Good fit with key elements of

strategy

Strong fit with several key elements of

strategy

Easily copied Protected, but not a deterrent

Solidly protected with trade secrets, patents, serves

captive customers

Position protected through a

combination of patents, trade secrets, raw

materials access and so on

No distinctive advantage, quickly

“leap-frogged”May get a good few

years Moderate life cycle Long life cycle

Limited to single application

Could be applied to another application

Could be adopted or have impact among several

areas

Could be applied outside the BU

Minimal harm, no noticeable impact if program dropped

Moderate competitive and financial impact

Significant impact, difficult to recover if

program is unsuccessful or

dropped

Business unit future depends on this

program

Crit

eria

?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

XX%

XX%

XX%

XX%

XX%

Weight

Dimensions

Criterial

Parameters

Portfolio ManagementParameter Evaluation

Alinhamento EstratégicoStrategic

AlignmentVerificar a aderência do projeto a estratégia corporativa da Braskem, considerando elementos como alinhamento às diretrizes estratégicas, desenvolvimento de competências, sinergias internas e externas, e impacto positivo geral

Verificar a aderência do projeto a estratégia corporativa da Braskem, considerando elementos como alinhamento às diretrizes estratégicas, desenvolvimento de competências, sinergias internas e externas, e impacto positivo geral

20%Desenvolvimento de Competências Diferenciadoras

20%Sinergias

20%

Impacto Geral (meio-ambiente, segurança, imagem da Braskem,

responsabilidade social)

40%

Alinhamento com as Diretrizes da

Estratégiaa- Excelência operacionalb- Matéria-prima competitivac- Aumento de rentabilidade em mercados em que já atuamosd- Desenvolvimento de novos mercados

ParâmetrosParâmetrosPesoPesoCritérioCritério

20%Desenvolvimento de Competências Diferenciadoras

20%Sinergias

20%

Impacto Geral (meio-ambiente, segurança, imagem da Braskem,

responsabilidade social)

40%

Alinhamento com as Diretrizes da

Estratégiaa- Excelência operacionalb- Matéria-prima competitivac- Aumento de rentabilidade em mercados em que já atuamosd- Desenvolvimento de novos mercados

ParâmetrosParâmetrosPesoPesoCritérioCritério

Não traz competência diferenciadora

Possui forte alinhamento com diretrizes estratégicas da Braskem

Possui alinhamento com diretrizes estratégicas da Braskem

Possui alinhamento indireto às diretrizes estratégicas da Braskem

Traz nova competência diferenciadora

Fortalece suas competências diferenciadoras atuais / traz nova competência que competidores já possuem

Traz ganhos de sinergias internas e externas

Traz ganhos de sinergias externas (fornecedores, competidores, clientes)

Traz ganhos de sinergias internas (entre UNs)

Não traz ganhos de sinergia

0 50 100

0 60 100

30 55 100

Traz perdas

100

Causa impactos positivos

Não causa impacto positivo

Provoca perdas Causa grandes impactos positivos

0 20 60 100

• Bucket selection by project Sponsor:

Portfolio ManagementBucket Selection

Complexity

Strategic Alignment

Context

Attractiveness

Tecnichal Attractiveness

Quantitative Benefits

CA Clarity PPMPortfolio Management - Project Characterization

Dimensions

CA Clarity PPMPortfolio Management - Project Characterization

Criterial

Strategic Alignment

Parameters

CA Clarity PPMPortfolio Management - Scorecard

Ex: Best Choice(Score x Budget)

CA Clarity PPMPortfolio ManagementEvaluation Tool - Efficient Frontier

CA Clarity PPMPortfolio ManagementEvaluation Tool – Graphical Analysis

Bucket 1 - Bubble GraphNPV x Strategic Alignment x Cost x Risk

NP

V

Strategic Alignment

CA Clarity PPMProject and Portfolio ManagementDashboard

Actual Scenario

Be among the top 10petrochemical companies

in the world inmarket value

Since Jan/2006;

All Braskem's Processes (Idea, Project and Portfolio) running in Clarity;

Over 600 users;

Over 7000 projects (700 actives);

More than 18 Industrial Units over 4 different states;

One Click information for all management levels;

VP approbation level;

Centralized data base and information;

Centralized Portfolio Management (PMO at Camaçari, Bahia);

All World support;

Fast portfolio scenarios;

Questions?

Please complete a session evaluation form

• The number for this session is PP409SN• After completing your session evaluation form,

place it in the basket at the back of the room

44 May 16-20, 2010 Copyright © 2010 CA. All rights reserved.