Andy Chatha Rethinking IT & Automation Presentation @ ARC Industry Forum 2010 in Orlando, FL. Today’s Business Drivers Security Uncertainty Scarce Resources Need to Go Green Global Competition Changing Workforce Increasing Regulations Emerging Smart Grid Easy IT Solutions Today’s business drivers demand agility

1. Rethinking IT & Automation Solutions
for Achieving Performance Breakthroughs
Andy Chatha
President
ARC Advisory Group
AChatha@ARCweb.com
Technology
People
Information
Processes

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Forum Goals
Rethinking IT Solutions
Rethinking Asset Lifecycle Management
Rethinking Operations & Automation
Rethinking Cyber Security
Performance-based Outsourcing
Top Strategies

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ARC World Industry Forum Goals
 Four Forums to encourage collaboration among:
• IT, engineering, operations and supply chain executives
 Rethinking as the main theme to encourage:
• Open discussion and sharing of breakthrough ideas
 Conducted research related to many new topics:
• ALM, CPAS 2.0, cyber security, logistics, smart grid,
sustainability
 Encourage active attendee participation with an
audience response system
 Invited many industry organizations to plan their
meetings here
 Encouraged industry media to cover the event
 All presentations and panel discussions are being audio
recorded for broad access

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Today’s Business Drivers
 Security
 Uncertainty
 Scarce Resources
 Need to Go Green
 Global Competition
 Changing Workforce
 Increasing Regulations
 Emerging Smart Grid
 Easy IT Solutions
Today’s business drivers demand agility

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Easy IT Solutions are Proliferating
 Web Sites
 Search
 Phone
 Web Apps
 Web Meetings
 GPS
 eBook
 Digital TV
 Virtual PCs
 Social Networks
Cloud computing hides complexity from the user

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Easy Collaboration Tools are Maturing
eMail,
Calendar
BlackBerry
Portals,
Wikis, RSS
IM,
Videochat,
NetPhone
Webcast
Business
Process,
Workflow
Collaborative
Devices
Telepresence
Social
Networks
Collaborative
Authoring
2010Distant Past
Capability
Presence
time
Telephone

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Easy Collaboration Tools are Maturing
eMail,
Calendar
BlackBerry
Portals,
Wikis, RSS
IM,
Videochat,
NetPhone
Webcast
Business
Process,
Workflow
Collaborative
Devices
Telepresence
Collaborative
Authoring
Presence
2010Distant Past
Capability
time
Social
Networks
Telephone

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Enterprise
Collaboration
PlatformDepartment,
Site, or
Organization
Enterprise Collaboration Platform
Enterprise Collaboration Platform
Partner
External
External
It takes more than a desk and a phone…
Individual Collaboration
Environment

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The Collaborative Enterprise
Suppliers Customers
Business
Automation
Supply Chain
Operations
Lifecycle
ARC Collaborative Management Model (CMM)

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Four Disciplines of The Collaborative Enterprise
Supply Chain Product
Plant & Equipment Operations

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Why Rethink Asset Lifecycle Management?
 Bigger, More Complex Projects
 Riskier Business Opportunities
 Limited Capital, Tough Capital Markets
 More Mandatory Investments
 Global Projects, Global Project Teams
 Escalating Labor and Material Costs
 Poor Asset Utilization, High O&M Costs
 Aging Workforce, Lack of Skilled Workers
 Legacy IT Systems Constrain Improvement
 Easy IT solutions can help

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ALM Begins with a Proper View of the Asset
Human
Virtual
Physical
Primary
Facilities
Equipment
Remote
Reference Data
Functional
Design
Procedural
Project-Centric
Project Mgmt
Engr/Design
Procurement
Construction
Support
IT HW/SW
Mobile
MRO Material
Asset-Centric
Operations
Process Engr
Maintenance
Reliability
Activity Records
Commercial
Status
History
The Three Asset Classes are Equally Important to Success

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Collaborative Devices are Emerging
Device Users, Technical Support, and Service Technicians
Can Interact via the Device’s Collaboration Workspace
PM2009a1 pipeline mixer
Interactive Chat:
- Respond to status request
- Run diagnostics
- Upload error logs
- etc.
Planner
Service
Engineer
Operator
Technical
Support
Shift
Supervisor

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A New Model for the Major ALM Processes
Plan Design Procure Build Operate Maintain
Retire &
Recycle
Project Performance
Management (PPM)
Asset Performance
Management (APM)
Project
Performance
Management
(PPM)
Asset
Performance
Management
(APM)
Asset & Project
Portfolio
Management
(APPM)
Handover
Modification
RequestsFunded
Projects
New
Facility
Requests

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Rethinking Operations Management
Operations Management
Production
Management
Automation
& Controls
Business
Integration
Maintenance
Management
Regulatory
Compliance
Energy
Management
A Holistic Approach to Managing Operations is Needed

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Why Rethink Automation Systems?
 Not truly distributed
 Not easy to upgrade or migrate
 Susceptible to cyber attacks
 Can’t do online software version updates
 Do not prevent operational errors
 Do not predict or avoid incidents
 Do not provide zero downtime
 Take too long to install & implement
 Field devices are still not smart enough
 Too complex & expensive

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Why Rethink Cyber Security?
 Growing threat of cyber attacks
 Pervasive use of IT in plant systems
 Plant systems are no longer isolated
 Plant systems require frequent software
version updates
 Cyber attack cost can be very high
 Government mandate
We need safe & secure systems

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ARC CPAS 2.0 Vision Enables
 Highly distributed control
 Safe and secure control
 Autonomous execution
 Online software version updates
 Reduction in human errors
 Incident prediction & prevention
 Business and automation system unification
 Power and automation systems integration
 Dynamic production planning
 Fast system implementation
 Zero downtime

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Automation Supplier Challenge
Develop Automation Solutions that are:
 Easy to use
 Easy to implement
 Easy to maintain
 Easy to upgrade
 Highly reliable
 Highly flexible
 Highly collaborative
 Highly secure
ARC CPAS 2.0 vision can help make easy automation
solutions a reality

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Performance-based Outsourcing (PBO)
 Main focus is on Logistics Outsourcing
 What is performance-based outsourcing?
 How is PBO different from gain sharing and
other types of contracts?
 What are the steps to creating a successful
PBO relationship?
 Who is practicing PBO today and what
benefits have they achieved?
 What are the main obstacles to implementing
PBO? How do you overcome these obstacles?
 Seminar with active attendee participation

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Top Strategies
1. Create a highly collaborative culture
2. Adopt easy IT collaboration platform
3. Adopt easy automation solutions
4. Standardize across all plants
5. Outsource non-core operations
6. Benchmark for continuous improvement
Collaboration & agility are the seeds for
achieving performance breakthroughs

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Thank You.
For more information, contact the author at
achatha@arcweb.com or visit our web pages at
www.arcweb.com

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Acronyms Used in This Presentation
AIM Asset Information Management
ALM Asset Lifecycle Management
CMM Collaborative Management Model
CPAS Collaborative Process Automation Systems
DCS Distributed Control Systems
ERP Enterprise Resource Planning
MES Manufacturing Execution System
OpX Operational Excellence
KPI Key Performance Indicators
PBO Performance-based Outsourcing
PLM Product Lifecycle Management
SCM Supply Chain Management
SOA Services Oriented Architecture
RPM Real-time Performance Management
A complete list is available on ARC’s website: ARCweb.com