Integrate Optimise Sustain

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1 Prepared by Krish Satiah - krishna.satiah@ December 2012

2 Introduction An ever increasing amount of data is being generated and accumulated in businesses today; however, it is generally acknowledged that it does not necessarily correspond to an improvement in reliable information on which to base good decisions. In many cases it is just the opposite; finding information that can be trusted is becoming increasingly difficult. There are two main reasons. 1. The volume of data is too large and the majority of it isn t needed. To arrive at the desired data, one has to sift through endless pages of irrelevant or unnecessary data. 2. The quality of the data is generally poor. Much of the data is inaccurate, out of date, inconsistent, incomplete, poorly formatted, or subject to interpretation. Therefore, even when you do arrive at the needed data, can you even trust it? If you hesitate in answering that question, you re undoubtedly spending some time deciding whether the data you have finally found is from a trusted source and if you can rely on it to accomplish your task. One cannot undertake effective asset management without good asset information; standardised and quality asset information is the most important ingredient of effective asset lifecycle management. Arguably, one cannot undertake effective asset management without good asset information. An Asset Information Management System aims to support the execution of each stage of asset lifecycle and provides for decision support for asset life cycle management, such as asset design, maintenance planning, resource allocation, and maintenance. To this end, standardised and quality asset information is the most important ingredient of effective asset lifecycle management in fact, it is considered to be its life-blood. The Problem The ARC Advisory Group estimates that poor asset information costs organisations approximately 1.5% of their sales revenue, plus increases the risk of HSE incidents 1. In this age of technology, Information Management has become more complex and is compounded by: Move to centralised/remote operations centres Mobility - cannot access information where or when required Timeliness - updates are too slow for effective operational decision making Sharing capabilities are inadequate for effective collaboration Increased regulatory requirements Poor records that cannot support compliance requirements Higher probability and frequency of incidents (risk of non-compliance) issues Too many local solutions across the organisation Lack of consistency - multiple versions of the truth 1 Information Management Strategies for Asset Lifecycle Management, ARC Advisory Group Strategy Report, January 2010

3 Incomplete - lacks important information Poor user interface - presentation options are limited or lack context Low accuracy - does not reflect actual equipment or configuration Not having a strategy to manage asset information can prove to be expensive, and result in the following: Increased capital and operational costs Extended project schedules Longer ramp-up time (to achieve design capacity of new assets) Low tool-time driven by poor information - takes too long to find information Higher failure rates Longer time to repair Low asset availability/utilisation Low personnel productivity Aging workforce need for transfer of knowledge and historical data Skills shortage training and competency not aligned to demand Matching employee skills with task requirements Many organisations already have systems and processes in place to manage their asset information and have made significant improvements in capturing both static data (nameplate) and dynamic data (asset condition, performance history, etc). But what is the reality we are dealing with? Does it look something like this? Business Continuity Plan Compliance Performance Task Instructions Reliability KPI s & Reporting Service Providers Training & Competence Budgets & Cost Failure Work Management Resource Management Change Management Operating Manual SHERQ Spares & Materials Asset Condition Standards & Regulations Asset Risk & Criticality Maintenance Manual Drawings Classified Plant OEM & Vendor Maintenance Strategy Engineering & Technical Asset Register Demand Forecasting Project Information Purchasing Whole of Life Model Many Asset Information Systems and processes are beset with short-cuts, missing links and hidden risks, much like a game of Snakes and Ladders.

4 There are a few key reasons as to why this information is not managed effectively: 1. Systems are disparate and do not share information 2. Asset information is not managed within an information life-cycle model 3. Asset information is not managed throughout the asset lifecycle 4. Lack of ownership of asset data What we really need to start doing is transform our information systems to provide us with Asset Intelligence; the question is how do we get there? The Solution When designing a house, we look at the layout of the land, and decide where the house will sit, what rooms we want, and what we want the house to look like inside and outside, before we set out to design the house foundations. Likewise, in terms of an asset information system, we lay out a vision for the business or operational capability we desire, then build the architectural model to represent this and start joining the dots and filling the gaps by creating a roadmap for asset management. PAS 55 states that an organization shall identify the asset management information it requires.considering all phases of the asset life cycle. The information shall be of a quality appropriate to the asset management decisions and activities it supports. 2 It goes on to say employees and other stakeholders shall have access to the information relevant to their asset management activities or responsibilities. Where separate asset management information systems exist, the organization shall ensure that the information provided by these systems is consistent. The Institute of Asset Management states that asset information is absolutely inseparable from the day to day asset management processes it supports and the IT systems containing it. Failure to align and integrate information creates silos and reduces the organisation s asset management capability. Business Capability Requirements AM Capability Matrix Architecture Definition IT AM Roadmap Figure 1 Enterprise IT for Asset Management Process An Asset Management strategy, supported by a technology roadmap, should be driven by the organisation s capability requirements, and mapped across departments in an Asset Management Capability Matrix, providing an integrated view of the capability, information, application and technology requirements. These are then mapped back to business unit requirements to determine the applications and the level of integration required for a complete, integrated Asset Information Management solution. This will also identify if required capabilities are not yet being addressed by current proposed solutions. Following on from this, a technology roadmap can be developed to ensure that IT service provision is aligned with the timing requirements of the business. Systems for managing asset information can use a range and combination of media and technologies, and should enable an organisation to identify, collect, retain, integrate, transform and disseminate its asset related information. These systems should be designed so that data and information is readily accessible and available to all relevant personnel for all situations, especially emergencies. 2 PAS 55: 2008, The Institute of Asset Management

5 Enablers Capability Model A good framework to start from is the Asset Management Council s Asset Capability Delivery Model, as displayed below: Stakeholders Needs Culture and Leadership Business Management Asset Capability Delivery Model Demand asset solution Systems Engineering non asset solution Concept Validation Acquisition Operations & Maintenance Needs Solution Concept Exploration Specification Design Support Integrated Support Operations Demand Management Create and Dispose Maintenance Requirements Change Engineering Change Support Change Process Audit Process Monitoring Continuous Improvement Configuration Management Figure 2 Asset Capability Delivery Model 3 It is evident that Systems Engineering and Configuration Management provide the foundation to extract value from the asset through its operational life. In essence, we are talking about the following: Cross-functional information requirements integration of IT solutions capabilities to aggregate and analyse asset information Information sharing & collaboration integration & centralisation of asset information tools to access and view asset information Automating information processes & workflows An Asset Management strategy, supported by a technology roadmap, should be driven by the organisation s capability requirements, providing an integrated view of the capability, information, application and technology requirements. 3 Asset Management Body of Knowledge, Asset Management Council

6 Information Life-Cycle To ensure asset information is managed appropriately, we need to apply the Information Life-Cycle model across each stage of the asset life-cycle. Typical questions to ask when dealing with data: PLAN What data do I need to capture, and why do I need it? What will I use it for, why would I share it and with whom? Am I capturing too much data? OBTAIN How will I get this data? What processes will I use to get quality data? STORE Where and how will I store this data? Am I storing this data many times in many places, and what can I do to assure data integrity? SHARE How will this information be shared, in what format and how often? MAINTAIN How will I maintain this data; keep it up to date and free of errors? APPLY Does this data meet objectives identified at the PLAN stage? Can I (or others) find this data easily when needed? DISPOSE Why would I need to retain this data, and do I have a retention plan? How do I dispose of old data in a secure manner? Plan Obtain Store Share Maintain Apply Dispose Figure 3 POSMAD Information Life-Cycle Model 4 The objective of applying the information life-cycle model is to only create data that adds value, and by applying this to all phases of the asset life-cycle we turn Asset into Asset Intelligence, where people, processes and systems can work in harmony. Information Knowledge Intelligence Optimisation Application Raw Cleansed Reporting Modelling Prediction Understanding Figure 4 From to Intelligence 4 POSMAD Information Life-Cycle Model, Danette McGilvray

7 Systems Integration To put it all together, we need a delivery model to ensure that all interfaces and communications between the various people, processes and technology deliver the value that was envisaged; this will lead to relevant work packages and release stages aligned to business priorities. Benefits What is the objective of having asset information (intelligence)? Ultimately, to justify investment in the asset itself, whether it is for replacement, upgrade, modification or repairs. Financial Technical Justify You Investments Good asset information enables better decision making based on the asset s condition, probability and consequence of failure, and regulatory compliance requirements to name a few. There are two key benefits of asset information: 1. Cost efficiency 2. Expenditure effectiveness Optioneering Informed Decisions Models Information Systems Asset Figure 5 Asset Management Maturity 5 Cost Efficiencies Studies have shown that asset information has a significant effect on the efficiency and performance of asset intensive businesses. Organisations operating efficient asset information processes have been found to indirectly spend around 20% of their total annual budget (OPEX and CAPEX) on asset information. Businesses with poor asset information processes were found to spend even more, typically as much as 25% of their total annual budget. 6,7 Expenditure Effectiveness The appropriate utilisation of asset information enables the right work to be done in the right place at the right time. Conversely, the lack of reliable asset information results in poor or suboptimal decision making exposing the business to unnecessary costs or risks and adversely affects overall business performance. The development of an integrated asset information system is a crucial step in ensuring that the right processes and applications are put in place to ensure all asset related activities support the overall objectives of the business. The early development and adoption of an enterprise IT strategy for asset management can provide key benefits such as: Reductions in the risk of NPV losses during design and ramp-up phases; 8 Reductions in IT project costs by ensuring systems and interfaces (which are costly to develop and maintain) are minimised; Reductions in asset life-time maintenance costs by up to 2%; 8 Can generate up to 10% productivity gains through technology advancements in asset management (right information to the right people at the right time) 8 The development of an integrated asset information system is a crucial step in ensuring that the right processes and applications are put in place to ensure all asset related activities support the overall objectives of the business. 5 Presentation The Asset Management Journey by John Hardwick, IAM Annual Conference, June The Real Cost of Asset Information: How Better Costs Less, Ruth Wallsgrove 7 Accenture US and UK Management Information Survey Findings

8 Conclusion Executed properly, an organisation should end up with a system that integrates all asset related data, and presents related information to end-users in the required format and time-frame. Furthermore, a successfully designed Integrated Asset Information Management System will contribute significantly to business profitability and give organisations the key to unlocking a treasure chest of valuable information. You may need to use more than one key to unlock a treasure chest sometimes there are even hidden locks. Likewise, to unlock the value in your asset data, you may need to use many keys, e.g. business strategy, process and organisational design, information and solution architecture models, application landscape and integration model. Key Points: 1. The cost of creating and maintaining essential data is typically less than the potential losses due to not having data when required, or the retrospective cost of improving data quality. Loss of data value can be rapid, so it is important to set up robust, continuous and sustainable data maintenance arrangements, including assigning resources to ensure data is maintained 2. is inextricably linked to the people and processes that create it and systems in which it is held. Therefore, appropriate roles and responsibility, from end-users to IT Services and Suppliers, are required to maintain data effectively. Ownership of asset information needs to be with asset managers in the business, who must ensure all arrangements are put in place to sustain its integrity. 3. There are two languages spoken when it comes to assets: a. Technical, for operations level communication b. Financial, for corporate level communication It is imperative that both languages convey the same message i.e. technical information is translated into financial information and vice-versa, to ensure that investment decisions promote sustainable operations e.g. asset reliability and asset utilisation. 4. Finally, and most importantly, the question to be answered is not how much an Integrated Asset Information Management System is going to cost, but how much value it is going to add. Brisbane Sydney Canberra Melbourne Adelaide Perth Level Adelaide St Brisbane QLD 4000 (07) info@ Level 2 68 Pitt St Sydney NSW 2000 (02) info@ Level 2 6/3 Sydney Ave Barton ACT 2600 (02) info@ Level Freshwater Pl Southbank VIC 3006 (03) info@ Ground Floor 165 Grenfell St Adelaide SA 5000 (08) info@ Level St Georges Tce Perth WA 6000 (08) info@ WP0009_15/01/2013