September 2020

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Digital: Five best practices for adopting new digital technologies in the HPI

There is much discussion and information about digital transformation, but many HPI companies are taking a different approach to integrating new digital technologies and to differentiate themselves from their peers, and are seeing truly transformative business results. HPI digital technology leaders reveal the following five best practices.

There is much discussion and information about digital transformation, but many hydrocarbon processing industry (HPI) companies are taking a different approach to integrating new digital technologies and to differentiate themselves from their peers, and are seeing truly transformative business results. HPI digital technology leaders reveal the following five best practices.

Strong link between business and digital strategies

One key element of successfully leveraging new digital technologies is remembering that it is about sustainable bottom line impact. All too often, the integration of new digital technologies is led by traditional information technology (IT) organizations with a strong bias toward focusing on upfront costs over operational expenditures (OPEX) savings. This results in efforts that are disconnected from business strategies.

The most effective methodology is for a CEO to have strategic digital awareness and appoint a business leader with a strong operational background and knowledge of digital capabilities. This executive should be focused on integrating new digital technologies to deliver operational excellence, and should have both traditional IT and operational technology (OT) oversight.

Leveraging a hybrid cloud approach

With traditional IT leadership, a strong and biased “cloud first” approach often exists, rather than a “business first” approach. Indeed, cloud computing capabilities offer great opportunities to reduce costs, enable a more self-serve and data-driven culture. However, a critical difference remains between critical operations data and traditional IT data environments. Critical operations require security and fit-for-purpose technologies that can effectively deal with required data security and governance, as well as with the large volume, velocity, variability and anomalies found in critical operational data. Successful HPI companies employ a hybrid cloud strategy that has both an on-premises/single-tenant cloud environment for critical operations, as well as a more open and flexible IT cloud environment that enables the adoption of software as a service (SaaS) and other means to leverage the digital value chain.

SMEs evolving the configuration of digital twins

New digital technologies have evolved to enable the self-serve configuration by subject matter experts (SMEs) of digital replicas of physical asset classes, commonly called digital twins. Evolved over time in an agile method, these digital twins function like Lego blocks that are combined to form digital replicas of physical systems, such as a fluid catalytic cracking unit (FCCU), an ethylene cracker, an entire refinery or an enterprise spanning multiple sites. The key advantage of using digital twins is the ability to empower SMEs with capture of their knowledge and wisdom. Changes made in the digital twin templates are propagated at scale with consistency across all instances where the digital twin templates are in production (FIG. 1).

FIG. 1. TC Energy (formerly, TransCanada) uses easy-to-configure digital twins to monitor more than 57,000 mi of pipelines and more than 830 compressors. Courtesy: OSIsoft.
FIG. 1. TC Energy (formerly, TransCanada) uses easy-to-configure digital twins to monitor more than 57,000 mi of pipelines and more than 830 compressors. Courtesy: OSIsoft.

Creating an “operational data chart of accounts”

The SME-configured digital twins are used to create an enterprise asset hierarchy with the ability to abstract, contextualize and normalize diverse tagging, asset and units of measure (UOM) typically found in the HPI. This enterprise asset hierarchy can be best described as the corollary to the financial chart of accounts that underpins financial intelligence. The operational or OT chart of accounts is the foundation to operational intelligence—when it is combined in higher level systems, a data model based on the enterprise asset hierarchy forms the foundation of enterprise intelligence (FIG. 2).

FIG. 2. The power of an “operational chart of accounts” to support operational and enterprise intelligence.
FIG. 2. The power of an “operational chart of accounts” to support operational and enterprise intelligence.

Define “analytics” and adopt a “layers of analytics” approach

The use of analytics and AI dominate marketing and sales conversations, yet many do not understand how to leverage these technologies to deliver business value. Successful HPI companies leveraging new digital technologies must first develop an analytics framework that defines the types of analytics and then pairs appropriate digital technologies that support each type. The most effective framework is based on the following layers of analytics:

  • Descriptive
  • Diagnostic
  • First-level predictive (via formula or empirical correlations)
  • Second-level predictive (pattern recognition, machine-learning, etc.)
  • Prescriptive with true AI.

Successful industrial operators first build an analytics foundation by leveraging a critical operations data infrastructure. Such data infrastructure should be designed to enable human analytics with self-serve access to contextualized operational intelligence as well as real-time streaming analytics that include first-level predictive analytics. Once the analytics foundation is in place, effective HPI operators then move to more advanced analytics, such as machine learning and AI, to solve a specific business problem with heavy SME involvement to augment the use of data scientists (FIG. 3).

FIG. 3. Shell’s journey to advanced analytics based on a “layers of analytics” approach.
FIG. 3. Shell’s journey to advanced analytics based on a “layers of analytics” approach.

Leading HPI companies are employing the five best practices discussed here in their leverage of new digital technologies to deliver sustainable, transformative business results. HP

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