Several weeks ago, we explored three key ways that Energy companies are able to take advantage of technologies to transform themselves digitally. For this entry, let’s explore one of these areas in more detail.
Digital Asset Management enables organizations to more effectively use asset information, data, and analytics to predict asset performance, identify changing conditions, and evaluate investment options. By creating a complete, 360 view of all asset information, an organization can better understand how an asset is performing, gain more detailed insight into increase its efficiency through predictive maintenance, and ensure more accurate operations and maintenance of the asset.
But why now? What is happening today that is driving organizations to invest in better ways of managing asset information? Let’s look more closely at three key drivers:
Holding on to Knowledge
The reality today is that workforce disruptions are draining organizations of key subject matter experts. In the oil and gas industry, the lower price of oil is driving many organizations to reduce their workforces but across the energy industry, experienced workers are approaching – or surpassing – their retirement.
With this expertise leaving your organization, it’s more critical than ever to make sure that you aren’t reliable on individuals to operate your plant. By creating a single source for all of your asset information, your teams will rely upon these reliable systems rather than “the old guy” to get as-built specs and engineering drawings or to understand the latest procedures.
This allows you to not only insure that your information survives the next retirement announcement but also improve reliability in the process.
Timing is Everything
Because of today’s lower oil prices, most oil and gas companies are reducing capital investment. This actually gives many of these companies the opportunity to take a breath and invest in improving their operational efficiencies. In fact, we see a large number of organizations across the energy industries investing in Operational Excellence programs.
While the benefits of operational excellence are very well understood, the reality is that when profits are high and opportunity is abundant, organizations quite understandably focus on taking advantage of these opportunities. As long as operational inefficiencies don’t impact the bottom line, there just isn’t the time or bandwidth to invest in improving productivity. But as profit margins narrow and investment slows down, priorities can finally shift to running the business better and focusing on digital transformation.
Transform the Bottom Line
In the energy industry, shrinking margins driven by competition and new sources of energy are forcing an increased focus on improving operational efficiency. While loose operational procedures may still result in profitability when market conditions are good, today’s lower prices and increased competition mean that absorbing sloppy maintenance and dealing with unplanned downtimes is simply not sustainable.
To maintain profitability in these market conditions, organizations must look more closely at their operating costs and at a minimum, focus on driving results in two areas:
- Improving accuracy and timeliness of operational and maintenance procedures to improve plant productivity and reduce unplanned downtime.
- Ensuring consistent plant operations to safeguard against safety incidents and compliance violations.
We will continue this discussion in the coming weeks, looking at steps that energy companies can take to transform themselves digitally and improve their operational excellence in the process. Where are you at with your digital transformation journey? Let’s discuss it here.