Information. Challenges in Capital Projects and. Enterprise Asset Management. 2 Foreward Appendix WHITE PAPER

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1 WHITE PAPER Information Challenges in Capital Projects and Enterprise Asset Management sponsored by: A Joint PennEnergy OpenText Survey Report on Information Management Challenges in Capital Projects and Enterprise Asset Management 2 Foreward 4 Information and the energy industry 15 Appendix

2 Foreword Today s energy companies must deal with ever-increasing amounts of data and information. In response to this dilemma, OpenText a global leader in Enterprise Information Management (EIM) wanted to better understand how companies are dealing with the Big Data age. They wished to identify what best practices companies are engaged in and which information management areas are causing the biggest concern. To take this inquiry further, OpenText partnered with PennEnergy to design a survey specifically for the energy industry. Aimed at uncovering the issues they face and the solutions they employ in their capital projects and Enterprise Asset Management (EAM) initiatives, survey questions covered a range of critical topics. Greatest information management concerns and practices; document control and transmittals; unstructured content management; and regulatory issues related to information management were a few of the topics explored in this survey. Impressively, 289 global organizations responded, which speaks to the currency of the issues and the importance today s energy companies attach to them. The Percentage of Respondents by E&R Business Segment Equipment Manufacturer or Field Services Company 22.9% Upstream O&G 15.4% Midstream 5.1% Downstream 5.1% EPC Contractor 23.9% Utility 15% Integrated Energy Company 12.6% 2 Percentage of Respondents by E&R Business Segment

3 Percentage of Respondents by Organizational Role/Position Engineer / Technician / Operator 26.3% Other Position 2.4% C-Level / Executive 17.1% Vice President 6.5% Manager 31.1% Director 16.7% Percentage of Respondents by Organizational Role/Position following report provides an overview of the most interesting and provocative answers. It is our hope that this examination of peer challenges and practices will help our audience better assess their own EIM-related issues and develop leadingedge practices and strategies going forward. We extend our particular thanks to all who participated in the survey. Thank you for contributing your valuable time and thoughts to its success. For your consideration, the full set of survey questions are reproduced in the appendix following this report. 3

4 Introduction: Large-scale Operations Mean Large-scale Challenges Information Management Is No Exception The energy industry has always been challenged by the very scope and scale of what it does. Within most organizations you will find multiple divisions and functions; global operations and increasingly globalized economies; expanding regulations; and technological proliferation. With all these factors comes a sea of data, documentation and information that threatens to overwhelm the unprepared. When the right information is available at the right time, however, corporate management, contractors and suppliers can collaborate more effectively, significantly improving their decision-making abilities and avoiding needless financial waste and loss. From the capital projects phase through the operations changeover and throughout the long-term lifecycle of assets, the proper management of documents like work orders, maintenance records, vendor POs, engineering specs, incidence reports and regulatory reporting is crucial to achieving project success, effectively maintaining assets and limiting downtime. 4 Many companies are losing the information management battle, however, and the overwhelming complexity of the industry itself is almost certainly a factor. Survey responses related to collaboration provide a telling example. When directly questioned about collaboration a strong information management trend in all industries 77.4% of respondents cited collaborating, sharing and providing access to relevant information to project teams as a moderate to high concern. Yet on questions where collaboration was included with other issues and ranked in terms of importance, it invariably fell on the least important end of the spectrum ranking last, for example, among concerns related to managing unstructured content.

5 Improve business insight and Competitive advantage Faster handover of capital Faster turnaround on Provide an enterprise wide Improve collaboration (Internal Mitigate risks Reduce costs Ensure compliance Optimize business processes Improve operational efficiency 0 - Not a Priority 0% 20% 40% 60% 80% 100% 1 - Low Priority High Priority Please indicate your most significant information management business drivers. This minor disconnect indicates just how complicated the information management issue matrix is, and how the playing field inevitably shifts when it comes to prioritizing concerns. This was amply reflected when the survey asked participants to indicate their most significant information management business drivers the second through the sixth drivers cited as moderate to highly important were separated by less than 1.5 percentage points. Still, there was a clear number one concern 85.3% said improving operational efficiency was of moderate to high concern and the following grouping of five showed some separation from the pack. These included improving business insight and decision making (79.7%), optimizing business processes (78.6%), ensuring compliance (78.6), mitigating risks (77.3%) and reducing costs (78.28%). As the survey report shows, energy companies are taking a variety of approaches to assessing and solving these critical challenges, with varying degrees of success. 5

6 Capital Project and EAM Needs Where Are Companies Most Concerned? Survey participants were asked to rank a variety of specific capital project and/or EAM needs in terms of which caused the most concern. The top concerns, ranked as moderate to high, were engineering/ technical drawing management (81.9%), regulatory compliance (77.4%) and asset management (76%). Integration with business solutions, high-volume capture and partner collaboration were the least likely to be rated as a moderate to high concern, though even those were over 50%. Respondents were then asked how they had addressed these challenges. The answers indicate that many are using more than one solution. Best-ofbreed purpose-built solutions and in-house developed applications were high on companies list of planned solutions, at 45.2% and 42.6% respectively. As traditional industry choices, this is not surprising, witnessed by the fact that 35.1% have already implemented in-house developed applications. Business Process Management High security or encryption Integration with Line of Business solutions Integration with ERP or CRM Transmittal Management Partner Collaboration (outside firewall) Customer Portals Asset Management Engineering/Technical Drawing Management Digital Asset Management (rich media) Case Management (e.g HSE incident management, High-volume capture Records management or long-term retention Regulatory compliance Physical records management 0% 20% 40% 60% 80% 100% 0 - No Concern 1 - Low Concern High Concern 6 Please indicate the level of concern you have on the following needs for your Capital Projects and/or Asset Management.

7 Careful choice of ECM suite vendor offering on-site productized solution Not Planned 32% Implemented 21% Planned 47% Careful choice of ECM suite vendor offering on-site productized solution However, Enterprise Content Management (ECM)-based solutions were on a par with traditional options, with 46.5% planning a careful choice of ECM suite vendor offering on-site productized solution and 43.4% looking at an ECM vendor-supplied customization specific to their needs. This move toward ECM-based solutions is also supported by what companies are not doing; 36.6% of respondents are not planning to implement a best-of-breed purpose-built solution a higher percentage than for either category of ECM-based solution. ECM-based information management is, indeed, a holistic approach that can be of great benefit to large corporate structures. ~ Survey Participant 7

8 Document Control and Transmittals Document control is a critical factor to both capital project success and effective asset management. During projects, current revisions must be continuously tracked and integrated, stakeholders notified and a revision history maintained. In the EAM phase, maintenance and design documents must be readily available to plant personnel, engineers and vendors, reflecting the latest procedures, updates and equipment changes. Through it all, information must pass successfully, consistently and efficiently from one lifecycle phase to the next, maintaining continuity, accountability and productivity. The fact that companies deal with an overwhelming amount of information during capital projects is clear. Approximately 50% of respondents said they handed over or received less than 10,000 documents on a large capital project, not surprising since the majority of responding companies were the smallest size 10 to 500 employees. However, a full 31.7% of respondents said they handed over or received 10,000 to 50,000 documents. Moreover, 63.6% of companies who said 250, , % >500, % 100, , % 50, , % < 10, % 10,000 50, % 8 How many documents do you typically handover/receive on a large capital project?

9 they handed over or received 250,000 to 500,000 documents were actually smaller companies, a daunting number considering the tremendous challenge of dealing effectively with such a document load. When asked how they managed document control and transmittals for these large numbers of documents, 58.4% of respondents said they did so manually through a document controller, followed by 52.2% who use an internally built transmittal tool. Next were ECM-based solutions at 13.7%. The results were, again, somewhat surprising when it came to company size. Forty percent of companies using ECM-based solutions to manage document controls and transmittals were companies of 10 to 500 employees, with companies of 1,000 to 5,000 and 10,000+ coming next at 22.5%. While ECM-based systems, with their capability to integrate large amounts of structured and unstructured information, might have been expected to be the choice of larger companies, it seems clear that smaller companies who are quite capable of having a very large document load are capitalizing on the value of ECM-based systems. Large companies, predictably, are also significant users of ECM-based systems, but the majority continue to use a document controller or internally built transmittals tool, with one respondent noting, We have our own simple and effective system developed over many years. This indicates some companies may not yet be willing to abandon investments in trained personnel and point solutions, despite the integration, access and compliance advantages ECM-based systems offer. Enterprise Information Management is the life-line of our business. ~ Survey Participant 9

10 Unstructured Content Unstructured content content such as s, contracts and manuals that is not classified and stored in traditional databases or easily used by mainstream applications presents a major information management problem. Its increasing volume can lead to information overload but, at the same time, it must be effectively managed and incorporated into the organization s single-point-of-truth to achieve compliance as well as a range of business and operational goals. When questioned about their primary concerns around managing unstructured content, participants had some clear priorities, with 84.2% citing access to relevant documentation at the right time, 79.2% selecting controlling which versions and revisions are current and 73.6% opting for security. When asked, however, to assess how well specific types of unstructured content were managed, some issues emerged. While more than 75% felt that contracts and order documents and standard operating procedures or work instructions were managed or well managed, certain key content including digital assets such as photos and videos, voice/telephone records and instant messages was the most frequently ranked as chaotically managed. The fact that instant messaging is, by companies own admission, not well managed raises some Please indicate how well the following types of unstructured content are managed through the total life-cycle of an asset. Instant Messages Voice/ telephone records Digital assets such as photos, videos Inspection Reports Supplier Information Standard Operating Procedures or Work As-built documentation and drawings Material specifications and master data Maintenance Plans Contracts and order documents and attachments Office documents (Word, Excel, etc..) 10 0% 20% 40% 60% 80% 100% Not Relevant Chaotic Somewhat Un-managed Managed Well Managed

11 How integrated are your business processes in Enterprise Asset Management and Maintenance Management? Operations Analysis and Monitoring Management of Change Quality Management Project Management / Project Controls Workforce Management Financial Controls Enterprise Content Management (unstructured s, Contract Management Engineering Document Management Supplier Information / Supply Chain Management Material Management Work Instructions and Standard Operating Procedures 0% 20% 40% 60% 80% 100% Not Important Integrate 1 - Not Integrated 2 - Poorly Integrated 3 - Reasonably Integrated 4 - Fully Integrated red flags, given the increasing prevalence of new media communications and the necessity of maintaining a visible, traceable trail around all project communications. Respondents also clearly did not feel that their unstructured s, documents and content were being effectively integrated with EAM and maintenance processes, with just over 30% saying those materials were either poorly integrated or not integrated at all, and the lowest percentage (19%) saying they were fully integrated. Clearly, better process integration would provide much greater consistency when it comes to ensuring the accuracy and currency of unstructured content. For example, integration with management of change processes would ensure such content was updated each time a process runs. It s critical to integrate all available resources to maximize productivity. ~ Survey Participant 11

12 The Regulatory Challenge Today s companies deal with a growing range of safety, environmental, financial and other regulatory requirements, and any capital project as well as the EAM companies regularly carry out involves enormous amounts of external documentation to meet them and avoid non-compliance penalties. To minimize related risks, relevant information must be managed, accessible, transparent and accurate at all times. Survey participants felt compliance was high on the list of information management business drivers, with 78.6% saying it was of moderate to high importance placing it fourth among 11 options. It ranked still higher among high-priority concerns around capital projects and/or asset management, placing second (as noted earlier) at 77.4%. When asked to break their concerns down to specific compliance issues, respondents selected regulatory submissions, permits or licensing as the most important compliance issue, with 73% rating it as a moderate to high concern. Management of change Monitoring compliance and internal reporting Reporting to regulators Regulatory submissions, permits or licensing 0% 20% 40% 60% 80% 100% 0 - No Concern 1 - Low Concern High Concern 12 Please indicate your level of concern regarding the following challenges surrounding complying with regulatory standards.

13 Monitoring compliance and internal reporting, reporting to regulators and management of change followed, at 69.5%, 67.4% and 64.6% respectively. Compliance demands will only continue to grow as regulators respond to financial and public pressures, and having an information management platform that can track and consolidate compliance information, documentation and reporting across the organization is crucial. Security and compliance and are the biggest issues facing our company today. ~ Survey Participant 13

14 Conclusion: Integrating Content with Businesses Processes Addresses Multiple Capital Project and EAM Issues Energy companies face a range of information management issues and challenges, including regulatory compliance, efficient access to and handover of key documents, accelerating operational output and returns, and knowledge sharing and collaboration. At the same time, the use of broad-based, integrated, ECM-based systems and tools to meet these challenges is still growing in an industry that has traditionally used manual or point solutions to handle document management, access and control. It must, however, grow because integrating content with the full range of capital projects and EAM business processes from project management to supplier information to material management is the foundation for meeting many of the challenges companies currently face. Regulatory compliance capability, for example, is significantly enhanced when content lifecycles are transparent, current and accurate. Moreover, broad process-content integration, where content is updated and aligned as business and management processes are executed, means risk management becomes more embedded into existing enterprise management platforms. Encouragingly, energy companies are becoming more open to replacing purposebuilt, standalone applications with integrated, ECM-based Capital Project and/ or Plant Asset Management solutions. Reducing costs (60.4% of respondents), improving decisions by achieving an enterprise-wide single-point-of-truth (53.6%) and reducing regulatory risk (51.5%) stand as the leading potential motivators to make the transition. OpenText continues to create these types of solutions for every energy sector, including oil and gas (O&G), petrochemical, utilities and mining solutions that capture and leverage both structured and unstructured content while linking stakeholders and assets to critical information across the organization. 14 For more information on OpenText ECM-based solutions for a range of energy industry information management needs, please contact: Advisors@opentext.com, or

15 Appendix Below is the full set of questions posed to the survey participants. 1. Please indicate your most significant information management business drivers, on a scale of 1 to 5, where 1 is low priority and 5 is high priority. :: Improve business insight and decision making :: Competitive advantage :: Faster handover of capital projects :: Faster turnaround on maintenance projects :: Provide and enterprise wide single point of truth :: Improve collaboration (internal and external) :: Mitigate risks :: Reduce costs :: Ensure compliance :: Optimize business processes :: Improve operational efficiency 2. Please indicate how well the following types of unstructured content are managed through the total life-cycle of an asset, using the options: Not Relevant, Chaotic, Somewhat Un-managed, Managed, Well Managed. :: Office documents (Word, Excel, etc.) :: and attachments :: Contracts and order documents :: Maintenance Plans :: Material specifications and master data :: As-built documentation and drawings :: Standard Operating Procedures or Work Instructions :: Supplier Information :: Inspection Reports :: Digital assets such as photos, videos :: Voice/ telephone records :: Instant Messages 15

16 Appendix 3. Please indicate the level of concern attached to the following attributes when managing your unstructured content (drawings, documents, s, contracts, etc.) on a scale of 1 to 5, where 1 is low concern and 5 is high concern. :: Accessibility: Access to relevant documentation at the right time :: Revision Control: Controlling which version and revision is the most current :: Security: Protecting content from releasing the wrong information to the wrong people :: Handover and Commissioning: Handover content in a contractually compliant form :: Collaboration: Collaborating on content with multiple internal and external stakeholders :: Integrated Processes and information: Sharing information between the various project applications 4. Please indicate the level of concern you have on the following needs for your Capital Projects and/or Asset Management, on a scale of 1 to 5, with 1 being low concern and 5 being high concern. :: Physical records management :: Regulatory compliance :: Records management or long-term retention :: High-volume capture :: Case Management (e.g., HSE incident management, complaints, claims) :: Digital Asset Management (rich media) :: Engineering/ Technical Drawing Management :: Asset Management :: Customer Portals :: Partner Collaboration (outside firewall) :: Transmittal Management :: Integration with ERP or CRM :: Integration with Line of Business solutions :: High security or encryption :: Business Process Management 16

17 Appendix 5. Please indicate how you have addressed the business needs from Question 4, using the options: Not Planned, Planned, Implemented. :: Careful choice of ECM suite vendor offering on-site productized solution :: ECM Vendor-supplied customization specific to us :: Cloud based 3rd party solution :: Best-of-breed purpose-built applications from multiple vendors :: In-house developed applications :: Other 6. Please indicate your level of concern about the challenges faced collaborating, sharing and providing access to relevant information with the following, on a scale of 1 to 5, where 1 is low concern and 5 is high concern. :: Project Teams :: Other groups and functions within our company :: Third parties such as EPC contractors, subcontractors and supplies 7. What are the most important considerations when reviewing and managing risks for Capital Projects? Please select all that apply. :: Cost of operations and maintenance :: Timing of delivery / Time to first production :: Potential litigation :: Regulatory compliance and permitting/licencing :: Complying with contract terms and milestones :: Health Safety and Environment (HSE) compliance :: Handover from commissioning and operations :: Price of the commodities :: Availability of materials and service companies 8. Please indicate how your document control and transmittals are managed. :: Manually via doc controller :: Internally built transmittals tool :: Via purpose built off the shelf System :: Via a cloud-based or externally hosted solution. :: Enterprise Content Management (ECM) based solution. 17 :: Please indicate which Off the Shelf System or Cloud-based or Externally Hosted Solution or ECM Solution do you use?

18 Appendix 9. How many documents do you typically handover/receive on a large capital project? :: < 10,000 :: 10,000 50,000 :: 50, ,000 :: 100, ,000 :: 250, ,000 :: >500, How integrated are your business processes in Enterprise Asset Management and Maintenance Management? Assess using the scale: Not Integrated, Poorly Integrated, Reasonably Integrated, Fully Integrated, Not Important. :: Work Instructions and Standard Operating Procedures :: Material Management :: Supplier Information / Supply Chain Management :: Engineering Document Management :: Contract Management :: Enterprise Content Management (unstructured s, documents and content) :: Financial Controls :: Workforce Management :: Project Management / Project Controls :: Quality Management :: Management of Change :: Operations Analysis and Monitoring 11. Please indicate your level of concern of the following challenges surrounding complying with regulatory standards, on a scale of 1 to 5, where 1 is low concern and 5 is high concern. :: Regulatory submissions, permits or licensing :: Reporting to regulators :: Monitoring compliance and internal reporting :: Management of change 18

19 Appendix 12. What factors would trigger your organization to replace multiple purpose-built standalone applications with an Enterprise Content Management (ECM) based Capital Project and/or Plant Asset Management solution? Check all that apply. :: Reduce IT costs :: Reduce costly rework and empower informed decisions by providing an enterprise wide single-point-of truth :: Reduce operational costs by streamlining controlled interdepartmental and intercompany collaboration :: Enable early production revenue by accelerating handover from commissioning to operations :: Reduce Regulatory Compliance risk by standardizing processes across departments and projects when possible (ECM allows for dept/project specific processes) :: Leverage enterprise wide ECM based Records Management retention & disposition functionality :: Other 13. What comments do you wish to make about your strategies and drivers for Enterprise Information Management? 14. What is the nature of your business? :: Upstream O&G :: Midstream :: Downstream O&G :: Utility :: Integrated Energy Company :: EPC Contractor :: Equipment Manufacturer or Field Services Company 15. How large is your company? :: employees :: employees :: employees 19 :: ,000 employees :: 10,000 + employees

20 Appendix 16. Please indicate your role/position in the organization. :: C-Level / Executive :: Vice President :: Director :: Manager :: Engineer/ Technician / Operator :: Other Position 20

21 About OpenText OpenText is the leader in enterprise information management (EIM). EIM enables organization to grow the business, lower costs of operations, and reduce information governance and security related risks. OpenText focuses on the key drivers of business success to improve business insight, strengthen business impact, accelerate process velocity, address information governance and provide security. Our offerings span the needs of the entire digital enterprise, with Enterprise Content Management, Business Process Management, Customer Experience, Management, Information Exchange and Discovery solutions. OpenText helps more than 50 thousand global customers build digital enterprises by unleashing the power of information. For more, visit About PennEnergy PennEnergy serves global energy professionals with the broadest, most complete coverage of industry-related information, with resources to help effectively perform critical job functions. Including content from all PennWell Petroleum and Power brands and other industry sources, PennEnergy.com delivers original industry news, financial market data, in-depth research, maps, surveys, statistical data, and equipment/service information. For more information on PennEnergy s resources for energy professionals and to subscribe to our free enewsletters, visit 21 For more information on OpenText ECM-based solutions for a range of energy industry information management needs, please contact: Advisors@opentext.com