Going beyond the buzzwords. Making digital operational
From glorious hype to essential talking point, hazardous industry operators must now practically execute the highly elusive journey of digital transformation.
Those in the hydrocarbon industry are especially saddled with this reality following bottomed out oil prices which forced producers to slash headcounts, shut in production, and adopt technologies in the name of brutal efficiency. As prices begin to climb again, industry operators are focused on preserving efficiency gains and improving operations to remain competitive.
Companies simply cannot afford to wait. They must harness and analyse vast amounts of data and adopt new digital ways of working if they are to ever streamline and speed up traditionally manual processes, identify trends and patterns to improve future processes, and deploy algorithms to predict success.
Over 73% of industry leaders recognise the power of digitalisation to accelerate and deliver sustainable operational excellence. The promises of big data connectivity and predictive analytics suggest continuous uptime, rapid response to risk exposure, incremental revenue gains, opportunities to better utilise assets, coordinate with operating and business needs and improve the efficiency of field service groups.
“The effective use of digital technologies in the oil and gas sector could reduce capital expenditures by up to 20 percent; it could cut operating costs in upstream by 3 to 5 percent and by about half that in downstream.” – McKinsey
But while the benefits are clear and the tools available, the ability to realise the promises of the fourth industrial revolution has yet to be delivered. In an era of perpetual disruption, where companies face an urgent need to transform, more than half of digital initiatives fail to deliver long-term value.
► Only 8% of companies say their current business model would remain economically viable if their industry keeps digitising at its current course or speed
► More than 51% recognise challenges to embracing digitalisation
► For initiatives that do get off the ground, more than one-third say their digitised processes aren’t doing much for their companies – a sign they haven’t yet found a way to embrace the new possibilities
To unlock the potential in a vast array of data typically hidden away in silos, operational data – regardless of source – must be translated and aggregated in new and innovative ways. Maximised efficiency, productivity, and health and safety hinges on shared data coming from management systems, equipment, the IoT and the operational edge.
Organisations are buzzing about the potential of a more comprehensive analysis of IT and OT data – from records in maintenance and enterprise resource planning (ERP) systems to valuable notes and images generated by field service personnel – with improved views and centralised processing that extends seamlessly to and from the operational edge.
But then comes the continuous tangle of thinking big but becoming overwhelmed by the possibilities. A common response to digital transformation is that it’s disruptive, and the tendency is to overcomplicate things: “If I’m going to be disrupted than I need to create something completely new.”
Digital platforms simplify insights and provide operational transparency. Key to this is finding meaningful relationships among existing data.
Imagine the potential of simplifying big data in process safety and operational risk management. Today, most organisations operate their businesses based on an operational management system or a process safety management framework. Typically, they report compliance and performance against these systems. But these systems fail to articulate what compliance or performance means in terms of the risk on the plant today, tomorrow, and in the future.
As a priority, Operators must ensure an enterprise-wide understanding of the potential sources of risk and how they can accumulate. With a common view of risk, the frontline can better understand how risk sources dynamically interact to create unexpected outcomes. It is then that an operator is in a place to standardise how everyone understands and mitigates risk.
“The key to delivering improved control of risk is how data informs decision-making at all levels of an organization.” – US Chemical Safety Board
For example, critical process safety-related equipment can be identified in data historians along with equipment parameters and thresholds, like temperature, vibration, pressure levels and volume. When the equipment surpasses its threshold, technology triggers automatic creation of a performance deviation. The automatic process operationalises data coming from the IIoT by creating meaningful insight from edge data and translating those conditions into their potential risk impact on the asset.
The result could be a central, ‘digital twin’ display of operational risk in a dynamic barrier management model. When this is translated appropriately for the frontline workforce through field mobility, supervisors through integrated operational management solutions to optimise planning and scheduling, and senior leadership with performance analysis and trending – data turns into insights, and digital becomes operational.
No longer are the elusive benefits of digital transformation. As a result of its proven ability to synthesise disparate IIoT and operational data in a useful way for everyone in the organisation, operators have the potential to gain real, tangible value – with digital ROI to the tune of $6,500,000 in annual frontline efficiency savings for one operator!
What do you think? Where are you seeing the tangible impact of digital transformation? I look forward to hearing from you.
Courtney Brewer is Petrotechnics’ Product Marketing Manager, responsible for understanding and articulating the value of enterprise-wide operational risk management for companies operating in hazardous industries around the world.