In January’s newsletter, we looked at the digital future and discussed how establishing operational data integrity was necessary to achieving the goal of improving operational efficiency. This month we’ll cover the first step in implementing digital technologies by defining the methods necessary to meet operational efficiency goals.
In a rush to implement digital technologies, we can neglect to perform the analysis necessary to achieve business goals. It’s usually easy to define why we are implementing these technologies. For example, “reducing costs” is a popular goal for most any project. It is however, too broad a statement to be useful in specifying and selecting a digital technology solution. It is also necessary to define how (i.e. by what method) cost reduction is to be realized. For example, on a typical offshore operation, we can use digital technologies to reduce costs via several methods, such as implementing:
- Mechanized, automated, or autonomous operations to reduce headcount or remove hazards to reduce safety incidents
- Predictive or preventative maintenance programs to reduce NPT
- Process optimization programs to increase efficiency (the ratio between input and output costs) or effectiveness (the quality of output)
These are only a few of the methods that can be used to reduce costs, and exposes one of the primary barriers to success: each method requires a different approach to digital technologies, and each method has different cost implications which can radically alter the ROI calculation.
For example:
- Implementing automation requires a much higher level of instrumentation capability than mechanization.
- Autonomous operations require significantly more attention to latency and communications bandwidth than automation does.
- Predictive/preventative maintenance programs require historical data retention capabilities and equipment modelling capabilities.
- Process optimization programs rely on understanding the differences between efficiency and effectiveness, and how each one impacts your specific operational cost model.
Defining the specific goals and selecting the appropriate methods requires both a financial and technical evaluation. The financial evaluation drives the selection of the methods and calculates the expected ROI, while the technical evaluation identifies the specific digital technologies to be implemented. In large organizations, these evaluations are typically executed within the financial and IT functions.
This typical evaluation process however, ignores the reality that digital technology implementation is an integrated system engineering activity that should include direct participation by operations technology (OT) resources. The OT resources provide the evaluation of the actual technical capabilities of the operation, and the costs involved with augmenting or upgrading those capabilities to handle the digital technologies.
Athens Group Services Digital Technology Enablement Services bring the experience and expertise necessary to bridge the gap between the financial, IT, and OT functions when specifying, evaluating, and implementing digital technology solutions. Our subject matter experts understand the direct connections between the OT equipment controls and sensors capabilities, IT communications, computing, and cybersecurity capabilities, and the financial ROI. We ensure that you specify and select the digital technology solution that works on your assets and provides the ROI you need. Contact us at your convenience for more information about defining the methods necessary to meet your operational efficiency goals.
Copyright 2017 Athens Group.