For industry professionals that undoubtedly spend the lion’s share of their time “communicating,” it may not seem very helpful simply to say, “You need to do it better.” What matters, though, is that best efforts mean little when supporting infrastructure is inadequate to the task. Owner/operators pay a tremendous cost for poor management of processes related to the creation, use, and care of their assets. A root cause for much of this cost burden, says ARC Advisory Group, is poor communication amongst stakeholders responsible for the following business processes: 1) design & build, 2) operate & optimize, and 3) maintain & improve. While these type challenges pertain across a range of industrial sectors, they may be especially acute in upstream oil & gas, given its globally dispersed nature and heritage of asset independence. What ARC has done in two recent reports is to identify attempts to quantify the costs related to poor process integration, promulgate an asset management model that addresses past inadequacies, and suggest that a technology infrastructure is emerging more propitious to the job at hand. In today’s world of constrained human resources supported by productivity-enhancing computers, the traditional asset-management model represents a limited view of what constitutes capital assets. Besides actual physical assets, “human” assets and “virtual” assets must also be taken into account, says ARC. To ensure human assets optimize investments in physical assets, personnel acquisition and training must be synchronized with acquisition and startup of associated physical plant; and personnel must follow proper procedures, including for continuous performance improvement. Virtual assets represent information used to create, use, and care for physical assets, including IT solutions. Interestingly enough, ARC points out, “for many people, the virtual asset is their only interaction with the physical asset.” Virtual assets therefore are of great value to asset-intensive organizations, “yet it is the least appreciated ‘thing’ in most asset management programs.” Consequences of this lack of appreciation are delineated in a US National Institute of Standards and Technology paper, “Cost Analysis of Inadequate Interoperability in the US Capital Facilities Industry.” More generally, design decisions that look good from a capital investment perspective may increase operating costs. And while the operator’s first allegiance is to production, for maintenance it is to the facility itself. To transcend these potential conflicts, says ARC, “Recent developments in analytics, modeling, and simulation make it possible for anyone associated with any asset lifecycle stage to measure performance, analyze it for the cause of performance constraints, and identify the best improvement alternatives.” The oil & gas industry is well familiar with the rich mix of models, real-time sensing and monitoring systems, and analytic tools central to these endeavors. Yet it is the interoperability amongst these platforms that may matter most. To bring this largely conceptual discussion down to earth, what ARC seems to be alluding to then is the use of emerging technologies such as services oriented architectures (SOA) to achieve interoperability across platforms relevant to design, operate, and maintain. Proprietary technologies can be used successfully to achieve one-off integrations that deliver benefits. It’s more likely, though, that what are really needed are the services of major enterprise vendors. Working in partnership with their oil & gas industry partners, these multi-billion-dollar software vendors have the deep pockets and development capabilities needed to comprehensively address an industry’s most compelling virtual asset challenges. For upstream oil & gas, the answer, however, isn’t found necessarily in the enterprise vendors’ core enterprise resources planning (ERP) solution, even though ERP is the system of record in most other industrial and commercial sectors. The world’s leading enterprise vendors, by far, are SAP and Oracle Corp. Oracle describes its upstream oil and gas industry solution as follows: • Data management using business intelligence, data warehousing, and the PPDM industry model; • Integration of 3D geospatial visualization with structured and unstructured operational data; • The enterprise upstream solution from Oracle and P2 Energy Solutions; and • Integrated customer resources (CRM), order, and field service management. As the world’s supplier of “the commodity of all commodities” the oil and gas industry’s distinct culture and proud demeanor are surely justified. Yet there seems a wide and growing consensus that its rigorous business processes and deliberate approach to risk management and decision making will be further enhanced by some of the modalities here discussed.
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