IBM Chemical & Petroleum

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

1 2 3 4 5 6

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

Introduction Enterprise asset management in today’s oil and gas industry

Integrate safety with asset management for operational excellence

Merge business and operational data to reduce risk

Leverage the Internet of Things

Resources

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

3

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

3

There’s a popular saying these days: “data is the new oil.” No one knows that better than today’s oil and gas companies. Sensors and smart devices in oil fields or on offshore rigs gather huge volumes of information ranging from operational performance to equipment wear and tear. Organizations in the industry routinely process business data for everything from finances and risk management to a variety of other worthy objectives—including “safety first” and sustainability initiatives—that rely on data.

Introduction: Make the most of your business and technology data

1 Introduction

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

4

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

4

However, these processes and the related data often remain isolated in functional silos. Different operational, business and IT teams may “own” different devices and data. Many companies manage analytics by specific function or department, limiting enterprise-wide visibility.

The consequences of disconnected data silos can be particularly telling in areas such as asset management; maintenance; and health, safety and environment management. If all

these functions have their own processes, software tools and organizational structure, it is difficult to share information among them and make fully informed decisions. For example, by not merging safety-related work into planned maintenance, companies may miss opportunities to improve efficiency, equipment reliability and worker safety.

In an era of lower oil and gas prices, saving time, money and effort is a top mandate. Companies that can combine business and

technical data and collaborate across traditional silos increase their opportunity to reduce costs and gain competitive advantage. This ebook examines the role of enterprise asset management (EAM)tools in the era of the Internet of Things, and explores how you can use these capabilities to take full advantage of data, boost operational efficiencies and make better decisions faster.

1 Introduction

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

5

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

Anyone in the oil and gas industry can tell you it’s an exciting but challenging time: the search for new energy sources, growing demand for transparency, pressure from industry regulators…and the unique challenge of managing oil and gas assets.

Improving the integrity of the growing number of assets involved in modern operations is an ongoing issue. The magnitude of the asset management task is greater than ever, carrying the risk of not being able to identify incidents and take corrective action—or worse, missing indicators of asset failure. The inevitable aging of onshore and offshore equipment is often characterized

by deterioration that can have serious consequences for asset integrity, reliable operation and worker safety.

Increasing operational efficiency starts with a solid asset management foundation (Figure 1). Your organization needs to:

• Capture best practices• Manage increasingly converged business

and technology assets• Safeguard and improve the integrity of a

growing number of assets• Address process safety management

requirements and procedures

Enterprise asset management in today’s oil and gas industry

2 EAM in today’s oil and gas industry

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

6

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

Figure 1. Integrated enterprise asset management presents a more complete view of the asset landscape, as well as the opportunity to more efficiently manage converged assets and reduce risk.

Enterprise asset management process for the oil and gas industry

Enterprisefinancials

Projectmanagement

Engineeringsystems

Geo-basedsystems

Process controlsystems

Documentmanagement

Open, industry-standards-based integration framework

Qualitymanagement

Defectelimination

Incidentmanagement

Servicemanagement

Conditionmonitoring

Preventativemaintenance

Operations management

Operating policy

Operating procedures

Operator logbook

Production reporting/log

Downtime reporting

Drilling and completion

Change management

Change request

Management of the change

Standard actions/groups

Technical authorities

After-action review

Risk management

Hazard/risk register

Risk modeling

Risk assessments

Permits and certificates

Investigation management

Investigations

FMECA analysis

RCFA analysis

“Five whys” analysis

Continuous improvement

Technical alerts

Work management

Work prioritization

Condition for work

Job planning

Calibration

Work orders

Work execution

Asset management

Location register

Asset/equipment register

Fleet asset management

Linear asset modeling

Configuration management

MRO supply management

Contractmanager

Purchasing

Inventorymanagement

Warranty/claimprocessing

Receiving/inspections

Invoicing

Compliancemanagement

Regulatoryregister

Regulatorycompliance

Conformancemanagement

Competencymanagement

Corrective andpreventative

action

Knowledgemanagement

Knowledgecapture

Informationbulletins

Lessonslearned

Solutions

Spatial/mobile/remote offline applications

Integrated operations and maintenance scheduling

Integrated operations and maintenance reporting/analytics

2 EAM in today’s oil and gas industry

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

7

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

These challenges are formidable—and tackling them requires a specific set of skills and capabilities. You need technology that provides a consolidated, trusted platform for easily and effectively managing everything from the smallest tools and parts to the largest exploration, production, transportation and refining facilities.

By proactively managing assets based on age, maintenance records and other important operations and maintenance criteria, you can optimize return on investment, comply with regulations and minimize risk. A strong asset management solution enables you to:

• Understand best practices to help improve the productivity and efficiency of critical assets

• Manage each asset’s lifecycle including acquisition, work management, inventory control, purchasing, and preventive and predictive maintenance

• Address specialized industry concerns such as failure codes, asset specifications, location details, prioritization matrix, regulatory compliance and condition for work

• Help reduce cost and facilitate and automate common processes

• Easily integrate the solution into your existing business systems

IBM® Maximo® is a complete enterprise asset management solution that helps manage production equipment, facilities, transportation and infrastructure assets on a single, integrated platform. Download the brochure to learn more, or share it now.

2 EAM in today’s oil and gas industry

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

8

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

Top rated

IBM Maximo Enterprise Asset Management is highly rated in the energy and utility industry, with analysts consistently ranking IBM as a leading enterprise asset management solution. IBM ranked as a Leader in the Gartner Magic Quadrant for Energy and Utilities Enterprise Asset Management Software, September 2015.1

“ Maximo solutions for EAM are well proven, being the global market share leader for over a decade.” —Ralph Rio, Research Director, ARC Advisory Group

2 EAM in today’s oil and gas industry

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

9

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

You can meet your health and safety objectives and save millions of dollars in the process—the key lies in linking safety functions with enterprise asset management. There is huge potential for achieving operational excellence through integration of siloed functions such as incident management; risk management; compliance; change management; health, safety and environment management; sustainability; energy management; and permit to work.

Much of the risk assumed by asset-intensive companies (and the attention paid by regulatory bodies) stems from the scale and complexity of their physical

Integrate safety with asset management for operational excellence

Accident avoidance benefits from enterprise asset management integration

Many times accidents could have been prevented with better

enterprise asset management policies, processes, systems or practices. Likewise, many deficiencies identified by compliance audits are asset-related.2

assets. You’ve likely made an enormous investment in your assets, and there’s a clear link between the condition of those assets and your ability to deliver products and services in a safe, sustainable and reliable manner. That is why the “front end” (such as safety) needs to talk to the “back end” (such as assets) about processes, supporting systems and ultimately actions.

3 Integrate safety with asset management

Start by broadening the scope of your safety incident management system to include asset management. Your system should also look at other event-triggered processes such as unanticipated asset failure, defects, operator observations, maintenance work that took more time than expected and other information from your enterprise asset management system.

For example, a scheduled maintenance window could be moved up and reprioritized if a site worker notes eroded piping, loose wiring, broken valves or other noncompliant situations. Or you may want to perform a proactive asset review at the first notice of a new safety regulation, and integrating safety systems with asset management systems allows you to create a work request automatically when you get a new regulation alert.

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

10

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

An integrated incident management and asset management system should accommodate small cases that flow through the process quickly, as well as large cases that require intensive investigation, analysis and change management to fix the problem and incorporate lessons learned. Full integration with a comprehensive asset management system ensures maintenance work history is readily available during the

investigation and analysis steps, and you can initiate and manage corrective action under a common reference number.

Similarly, the enterprise asset management system should have access to safety incident files. This access ensures the lessons learned are incorporated into the maintenance work program for reduced cost and improved asset availability, performance, reliability, safety and sustainability.

Secrets to integration success To successfully integrate traditionally siloed processes such as safety and asset management, look for a software solution like IBM Maximo that offers the following characteristics:

• Asset-focused, not accounting, finance or human resources-focused

• Extensive asset management functionality, fully integrated with work and safety incident management

• Highly configurable and flexible to avoid the high cost of customization

• Sophisticated analysis and reporting tools for analyzing problems and identifying improvement opportunities

3 Integrate safety with asset management

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

11

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources3 Integrate safety with asset management

Learn more about integrating health and safety systems with enterprise asset management

Download or share the analyst report “The Value of Integrating Health, Safety & Environment Processes with Enterprise Asset Management.” Read and share the solution brief “IBM Maximo solution for health, safety and environment.”

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

12

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

Merge business and operational data to reduce risk

Making a strong connection between operational risk and overall business risk represents another opportunity for oil and gas companies to boost operational efficiencies and enhance decision-making. Reducing operational risk is of particular importance in industries such as oil and gas, chemicals, mining and utilities where employees often work in conditions subject to major accident hazards.

Operational risk must be assessed for a variety of different work activities and operations including both personal and process safety. Failure to do so often leads

to major incidents or catastrophes, such as an explosion at a refinery, a fire at an oil and gas drilling platform or a leak on a gathering system, transmission system or distribution line.

Methods for conducting this assessment vary considerably:

• In classical risk assessment, the most frequently used method, identified hazards or risk events are reviewed by consequence, severity and likelihood against predefined risk matrices; controls are used as needed to reduce risks to an acceptable level.

4 Merge data to reduce risk

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

13

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

asset management systems and the many siloed functions that strongly link to it. For example, with a more complete set of information sources, “incident management” can be expanded to a broader category known as “case management.” This creates a single point of entry for all types of unexpected situations and related input, including:

• Accidents and near-misses• Audit deficiencies • Sudden asset failures• Product recalls• A job that took much longer than anticipated• Observations made by an operator• Suggested improvements to assets

or processes

Combining case management and work management into a single fully integrated system ensures both processes have access to each other’s data. The result: cases can be resolved faster and with more complete solutions, and lessons learned from case resolution can be quickly and effectively incorporated into the maintenance work program.

4 Merge data to reduce risk

• Quantitative risk models are often used to assess likelihood of an event occurring, particularly during plant design.

• Other types of risks are assessed using semi-quantitative, predefined rules based on a combination on input parameters.

A well-designed and integrated work management and safety management system will keep people informed on matters related to safety and inform the final assessment of risk, which relies on some level of human judgment.

When balancing risk in an asset-intensive environment, you have much to gain and little to lose by integrating your enterprise

Learn more about balancing risk in an asset-intensive environment. Download the white paper “Understanding the real risk for asset-intensive companies” or share it now.

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

14

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

What is case management? Case management streamlines processes and increases efficiency by giving workers a place to electronically store, view and interact with all the materials relevant to a case. Benefits include:

• Providing flexible workflows, action setting, progress reporting and integration with other solutions and information sources

• Replacing costlier and error-prone manual, ad hoc or paper-based processes

• Handling security and compliance requirements more effectively, particularly for mobile or field- based workers

Your case management system should be integrated with your work management system because at any point it may be necessary to deal with an immediate problem; inspect an asset to collect data; implement an approved change; or analyze work history to find patterns, correlations and root causes. For more information about case management, health and safety, and enterprise asset management, read the analyst report “The Value of Integrating Health, Safety & Environment Processes with Enterprise Asset Management.”

4 Merge data to reduce risk

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

15

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

Today’s oil and gas companies can tap into up-to-the-second data to perform such tasks as assessing and repairing passing valves, and integrating and presenting contextual information from wearable devices to warn field workers about safety concerns.

All of that data must be connected and analyzed to have value. With that in mind, oil and gas organizations are focusing their IoT investments on big data; cybersecurity; automation; real-time analytics; industrial control networks; and health, safety and environment management. Your enterprise asset management system can facilitate these initiatives and provide scalability to handle growing IoT data volumes.

The integration and flexibility that make enterprise asset management systems valuable for safety and operational gains also give companies a boost in efforts to leverage the Internet of Things (IoT). New analytics technologies give energy companies ways to more efficiently utilize the vast amount of data that exists across their value chain.

Many companies have already made investments in technology to connect their people, processes and assets—the oil and gas industry has long utilized sensor-equipped assets. However, the explosion of Internet-linked devices and infrastructure is making today’s energy environment even more data-rich and ripe for deeper analysis.

Use enterprise asset management to leverage the Internet of Things

5 Leverage the Internet of Things

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

16

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

By using enterprise asset management to capitalize on IoT data, you can enhance key business functions including:

• Configuring the asset hierarchy: Establish and maintain a hierarchy based on asset criticality to minimize operational risk.

• Capturing maintenance history and failure data: Combine real-time performance monitoring information with maintenance history and failure data to enable predictive and reliability-centered maintenance practices.

• Optimizing maintenance execution: Integrate health, safety and environment functions with IoT data for incident management, handling permits and change management.

IBM Maximo supports these functions by merging real-time asset operational data with critical asset information, and then using market-leading functionality to optimize operations and maintenance. It allows organizations to drive the process of managing change and to take effective action based on input from IoT devices and analytics.

As your organization makes greater use of IoT integration, system scalability and resiliency also become imperative. Maximo is designed to provide the scalability and resiliency you need to realize efficiency and productivity gains.

5 Leverage the Internet of Things

IBM Maximo and IoT Learn more about how Maximo benefits IoT efforts in this solution brief.

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

17

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources5 Leverage the Internet of Things

With global organizations and systems that are more instrumented, interconnected and intelligent than ever, the oil and gas industry has the potential to optimize operations and increase efficiency by using data in new ways. The core functionalities of enterprise asset management systems—flexibility, scalability and integration—support those goals. By building on the strength and reliability of IBM Maximo Asset Management, you can cost-effectively manage assets and get more value out of existing systems and data stores.

Enterprise asset management: Why it’s even more important in today’s oil and gas industry

18

1 Introduction 2 EAM in today’s oil and gas industry

3 Integrate safety with asset management

4 Merge data to reduce risk

5 Leverage the Internet of Things

6 Resources

Check out these resources to learn more about the importance of enterprise asset management in the oil and gas industry and why Maximo is a resilient solution for today’s asset management challenges.

• IBM Maximo• IBM enterprise asset management

solutions

Resources

User groups

• GOMaximo• Mideast User Group (oil and gas-centric) • Maximo Maintenance Managers’

User Forum• Maximo User Groups (US Regional) Additionally, IBM Global Financing can help you acquire the software capabilities that your business needs in the most

cost-effective and strategic way possible. We’ll partner with credit-qualified clients to customize a financing solution to suit your business and development goals, enable effective cash management, and improve your total cost of ownership. Fund your critical IT investment and propel your business forward with IBM Global Financing. For more information, visit: ibm.com/financing

6 Resources

CHM12346-USEN-00

© Copyright IBM Corporation 2015

IBM Analytics Route 100 Somers, NY 10589

Produced in the United States of America December 2015

IBM, the IBM logo, ibm.com, and Maximo are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml

This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates.

THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.

The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation. 1 Eriksen, Leif. “Magic Quadrant for Energy and Utilities

Enterprise Asset Management Software.” Gartner. September 15, 2015. ID:G00270950.

2 Berger, David. “The Value of Integrating Health, Safety & Environment Processes with Enterprise Asset Management.” Western Management Consultants. 2013.

Please Recycle