The Future of Digital Transformation – Prioritizing HSE and Operational Risk
The hype and promises surrounding digital transformation have shifted the focus of hazardous industry operators globally. But while the benefits are clear, the ability to realise them is not. A reduction in operating costs, broader operational efficiencies and fundamental transformation of the business are what’s expected – but without context, these objectives are only illusions.
If operators are ever to realise the benefits they expect, they must understand technology cannot do the heavy lifting on its own. Viewing digitalisation as a silver bullet is a mistake. In fact, according to Petrotechnics’ Scott Lehmann, “It’s dangerous to point analytics at a bunch of disparate data and apply some machine learning and expect actionable insights to come out the other end.”
However, with the right context, digitalisation can enable an organisation and provide support for a more collaborative culture, in which a disciplined approach to everyday decision-making enables key business objectives.
Two separate industry surveys reveal striking similarities about the priority of digital transformation among other investments in the hazardous industry. In short, HSE and Operational Risk are among the top strategies – and hold real potential for transforming business models, processes, and performance towards operational excellence (OE).
Accenture’s 2017 digital refining report distills investment priorities as shared by over 200 global refining executives, functional leaders, and engineers.
Petrotechnics’ 2017 survey on process safety and risk management reveals insights from over 200 senior executives and technical leaders on the state of operational risk and safety management.
TAKEAWAY #1: MAINTENANCE AND SAFETY GO HAND-IN-GLOVE AND WILL BE A DIGITAL INVESTMENT FOCUS
Accenture’s report reveals Maintenance (49%) and HSE (34%) are the top two investment priorities for refiners. Not surprising, as operators around the world will know, a safe plant is a productive plant – and vice versa.
According to Petrotechnics’ survey, aging facilities – a top cause of maintenance – are a top challenge for delivering effective safety management. Over 76% agree maintenance impacts safety performance.
With over half (57%) of Accenture survey respondents suggesting their level of investment has grown over the last year, and 62% indicating they plan to invest more in digital over the next three to five years, Maintenance and HSE are sure to be the future focus of digital transformation.
TAKEAWAY #2: KPIs ARE THE DRIVING FORCE FOR OVERALL OPERATIONAL PERFORMANCE
Analytics are cited for having the greatest impact on overall operational performance by 74% of Accenture’s survey respondents.
However, over 61% of Petrotechnics’ respondents believe companies do not currently have well-defined leading and lagging safety indicators. And, only 26% of companies employ effective solutions for monitoring and managing the risk arising from operational activities, the impaired health of process safety barriers, and other management system deficiencies.
Leading operators of the future will be those that fully exploit data and analytics as a standard way of managing operations.
TAKEAWAY #3: DIGITAL TECHNOLOGIES SUPPORT SAFER, MORE EFFECTIVE, MORE EFFICIENT PLANT MANAGEMENT AND ARE GROWING IN IMPORTANCE
Refiners see clear benefits from digital adoption.
Benefit #1: More effective plant management
Effective plant management, aka – Operational Excellence (OE), is achieved when cross-functional organizations collaborate and consistently make the most effective operational decisions to satisfy business objectives: improve productivity, manage costs and reduce risk.
According to Accenture, effective plant management is the top benefit of digital refining, according to 63% of survey respondents. And according to Petrotechnics’ survey, OE programs/strategies were given as a main driver for improving safety performance according to 61% of respondents.
Benefit #2: Reduced Operational risk
The top driver for improving safety performance was, not surprising, reducing operational and major accident hazard (MAH) risk – according to 71% of Petrotechnics’ survey participants.
As a priority, operations and maintenance must understand the aspects of their jobs that are essential in managing process safety risk. The trouble is, according to one survey respondent,
“Process safety is specialized knowledge, not typically understood by operations and maintenance, leading to implementation gaps… Risks are not always understood.”
The nature of risk is dynamic – which makes it difficult to understand and manage. Over 70% of safety leaders believe there is a measurable change in risk exposure on the plant between planned process safety management (PSM) hazard review periods – due primarily to aging facilities and deterioration in the health or effectiveness of process safety barriers.
According to Accenture, 60% agree reduced operational risk is a main benefit of digital refining.
Benefit #3 – More efficient and predictive maintenance
When asked “who bears the most responsibility for understanding and managing operational risk,” the majority of respondents, 67%, lean to maintenance for actively managing and mitigating the impact of risk.
“It’s important that we understand hazards on a real-time basis and that the continual state of barriers is maintained as designed to reduce incidents.”
90% believe risk awareness and safety would be improved if the workforce and management had access to real-time process safety risk indicators on the plant – a significant increase from 73% in Petrotechnics’ 2016 survey – demonstrating a growing reliance on leading indicators to prioritise maintenance and improve safety performance.
The ability to achieve more efficient and predictive maintenance was as the third benefit of digital according to 54% of Accenture’s surveyed refiners.
REALISING THE BENEFITS
Implementing a full-scale, digital Operational Excellence program takes time, and realizing the rewards can take even longer. Yet, despite OE being in relative infancy, digital pioneers are beginning to see tangible results: 33% suggest they have reduced operational and major accident hazard risk exposure as a result of their investment – according to Petrotechnics’ recent Operational Excellence survey.
Could this be why industry analyst, LNS Research, has been emphasizing,
“Process Safety is one of the most unheralded, transformative areas of [digital innovation].”
PATH TOWARDS REFINING EXCELLENCE
Accenture and Petrotechnics’ industry reports demonstrate now is the time to define digital strategies and deploy systems that enable organizations to transform HSE and operational risk management.
The good news is the hazardous industries understand the complex nature of the challenges they face, as well as the hurdles to overcome.
Bringing together once-disparate pieces of information gives an operator a full, three-dimensional view of every asset and facility. When that information is made accessible to the entire organisation, in a way that makes sense to everyone, the output will be better operational decision-making. Everyone can actively participate in driving improvements to the business; reducing operational risk and enabling excellent business practices.
What do you think?
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