# Evaluating the Cost Efficiency of Systems Engineering in Oil and Gas Projects
## 1 Introduction  
The ability to design and build successful products that meet stakeholder requirements and bring them to market on time is a priority for most organizations. One of the most effective tools for the implementation of successful high-complexity projects is systems engineering. However, the economic effect from using SE is not fully understood. This article will describe what systems engineering is, the results from applying this engineering approach to various projects, and also our own method for calculating the economic effect of using SE in the oil and gas industry. An increase in the complexity and scale of designed systems combined with difficulties in organizing teamwork resulted in a new methodological approach, systems engineering, which appeared in the mid-twentieth century. The term systems engineering was first used at Bell Labs in the 1940s [1]; in the USSR, the new engineering approach developed in the early 1960s; and in 1969, the USSR's first systems engineering department was created at Moscow Energy University. The International Council on Systems Engineering (INCOSE) defines systems engineering as a transdisciplinary and integrative approach to enable the successful realization, use, and retirement of engineered systems, using system principles and concepts and scientific, technological, and management methods [2]. Systems engineering (SE) is a modern methodology for creating complex technical systems, and for many years it has been successfully used in projects of various kinds [3; 4; 5]. The advantages of using SE and its impact on the success of the system can be expressed in the following: complete and consistent documentation on requirements management, a high level of stakeholder participation, a system functionality that meets the expectations of stakeholders, a high level of system reuse, and more predictable project results [6; 7]. The use of SE methods and tools has become a practical necessity and, in fact, a standard that ensures high-quality results, for example, in large projects in the aerospace, nuclear, and military industries; in the design of transport systems; and in construction, which differ in a wide range of requirements for safe and successful functioning [2; 5; 8]. However, systems engineering is rather poorly implemented in Russian companies, despite significant advantages that stem from applying system thinking principles and the experience of building successful systems. The authors believe one of the reasons for this to be a weak justification for the efficient application of systems engineering and, as a result, its poor implementation in companies' business processes. The signs of complex, multicomponent systems [9; 10] in the oil and gas industry, such as engineering saturation, heterogeneity, and the use of advanced technologies, indicate a high potential for applying systems engineering to oil and gas projects. However, the scope of investment in implementing and developing SE depends on the scope and specifics of the project and requires quantitative justification when making investment decisions. The impact of systems engineering on success in project management and return on investments in SE are subjects of many years of study and discussion in the international community of systems engineers. The main areas of study are associated with determining the optimum spends on SE and measuring the success of the project, which are traditionally determined by three parameters: project schedule (time); budget (cost); and quality, which is defined as the compliance of the result with the initial requirements of stakeholders [11; 12; 13]. These parameters are the key indicators of project performance (KPI) and may be objective or subjective. Objective indicators are calculated using math formulas, and subjective indicators are measured based on assessing the quality, functionally, and satisfaction of stakeholders [14].