Generally, the mining industry has not kept projects in line with feasibility study forecasts. A series of studies that analyzed approximately 100 different mining projects from 1965 through 2001 revealed that the average project had a cost overrun of 25% against forecast. This overrun directly impacts the profit expected from each project which in turn undermines the use of feasibility studies as a basis sfor management green lights.
Mining corporations and operating units are under constant pressure to improve financial performance. Operational costs have steadily increased over time. Subject matter experts are stretched thin because of multiple demands for their input. Key stakeholders and decision makers are spread out over long distances and multiple time zones. Given the need to rapidly align all stakeholders on huge volumes of data within the same context, making timely and informed management decisions in this environment is challenging.
Efforts to improve financial performance are eroded by a range of operational profitability killers that are embedded in traditional processes and procedures and that inhibit effective decision making.
Technology supported collaborative decision making has emerged as a key efficiency driver at all stages of the asset lifecycle, from planning and construction through production and into decommissioning. This paper will focus primarily on the characteristics of successful collaborative environments as established and operated in the production phase due to the fact that the lifecycle of this stage is the longest of the four with the most complex combination of technology, applications, processes and behavioral change.
Project Profitebility Killers
Project profitability killers that impede timely and effective decision making are centered on several key obstacles:
Functional Silos. In an effort to be most efficient, many operators break their projects into function-based teams so that groups of specialists can focus on various problem sets. While this approach is efficient in one way, these teams are often so focused on their particular issues and responsibilities that they do not have insight into, or appreciation for, the impacts of their decisions on other functional teams. This commonly leads to problems with opportunity realization, deferment, planning, and cost management. Another by-product of functional silos is the insulation of subject matter experts and other resources, which end up being hard for other elements of the project to access. A key success factor in streamlining and optimizing projects is employing processes, technologies, and physical infrastructure that facilitate transparency and integration across functional silos.
Economic pressures and labor shortages have driven remote, automated technologies to the forefront of major mining eneterprises. With the potential to lower costs at mine sites and reposition people in ways that bring costs down further, these technologies are fostering new approaches to process, workflows, and capital investment. However, despite efforts to integrate technology into and across projects, profitability killers remain deeply embedded in traditional processes and procedures, as well as in staff mindset. Eliminating them means finding new ways to leverage assets and establish connections across land masses and between functional silos.
Enter the Collaborative Decision Environment
The equation for eliminating profitability killers that exist in the production decision making process looks like this:
Right Information + Right Connections + Right Time = Right Decision
With all necessary decision makers available (either physically or virtually), and presented with all the decision-critical data at the right moment, the actual task of making the decision becomes cost- and time-effective. This state is achieved by leveraging technology with a series of new decision making processes and a shift in user mindset. The drive to establish this capability has driven the establishment of the Collaborative Decision Environment (CDE).
As the name implies, the core of the CDE is collaboration, both within the organization and across its third party network of contractors, vendors, and other stakeholders. It consists of three major components:
Collaborative tools and applications including:
A fit-for-purpose physical and/or virtual environment designed to:
Adoption of collaboration as a best practice by:
CDE implementation focuses on achieving replicable collaboration that increases efficiency across decision processes. At a high level, it comprises four components:
Based on experience planning, deploying, and maintaining CDEs for clients in the oil and gas industry, Wipro has fine tuned its model for optimum profitability. To effectively manage the complexity of the environment, we take a layered approach to design and implementation which has proven highly effective. Each layer establishes and manages a specific facet of the CDE and focuses on specific objectives:
Data Capture and Quality Assurance
Data and Application Management
True or False: Are You a CDE Candidate?
How many of the following conditions are true for your project? If all or most of the statements below are true, the more benefit you will see from CDE implementation.
1.There are decision processes and/or accountability structures which are not clearly defined.
2.Decision makers are distributed over a wide geographical area.
3.Multiple staff members are filling the same role across different locations.
4.Decisions frequently call for input from geographically dispersed experts and/or stakeholders.
5.The right people and the right data are not always available at the time a decision must be made.
6.The project routinely incurs high travel costs.
Infrastructure and Equipment
Workflow and Data Visualization
Because several of the layers can be developed concurrently rather than serially, our approach facilitates project management and optimizes resource utilization. Once all the layers have been built and the CDE rolls out, there must be constant reinforcement for its use among staff and management in the production environment to successfully embed it into day-to-day activities.
A CDE eliminates profitability killers in a mining project by:
Last but certainly not least, the CDE connects functional silos in ways that foster transparency, which in turn generates significant time and cost savings.
The nature of the CDE makes measurable results relatively easy to obtain. In deployments that Wipro has led in the oil and gas industry, some of the results that have contributed to improved profitability include:
The cumulative impact of these results has had a significant positive impact on our clients’ profits.
In today’s world, a mining company must be flexible and adaptable in order to maximize profits while meeting growing market demands. Better decision making will lead to more accurate forecasting and project management which in turn will lead to more profitable outcomes. Traditional processes and procedures do not foster improvement in these areas. Breakthroughs to new levels of performance require establishing new ways of working. The CDE takes down project profitability killers and has shown excellent short term returns on investment.
Collaboration is fundamentally an organizational change, and this must be taken into account in CDE design and rollout. Successful deployment calls for a multi-layered combination of engineering, technical, and organizational/behavior change expertise, and management commitment.
CDE implementation may be a new kind of project for a mining organization. It requires elimination of functional silos from the start of the project. This is not just an IT or an engineering initiative, nor can it succeed without inclusion of behavior and organizational change management experts. The new environment calls for new ways of working, including modifications to organizational structure (e.g., collocation depending on the functional silos being addressed) and addition of “soft metrics” (e.g., tracking length and types of meetings to gauge meeting effectiveness) to the management dashboard.
Establishing a collaborative culture where one does not currently exist requires a visible and sustained commitment from management which includes communication and change management initiatives that must be reflected in the timeline; in addition, the rollout may need to take place in small increments so that CDE participants can learn and assimilate new processes and workflows most effectively.
Chris Anderson has worked with multinational energy firms, governments and non governmental organizations throughout the world leading innovation in process, team building, analytics, and technology application. In his current role as a Manager in Wipro’s Energy, Natural Resources, & Utilities Global Practice, Chris focuses on building partnerships across industries and specialties to drive innovation and creativity around the integration of technology and business culture, with a focus on collaboration across complex, geographically dispersed operations.
Sandeep Chandran has over 13 years experience as a solutions consultant in the process industry, focusing on design and deployment of plant-wide real-time and management information, and decision support systems. Sandeep has worked in a wide variety of roles across engineering services and IT consulting field. As a Senior Manager with Wipro’s Energy, Natural Resources, & Utilities Global Practice, Sandeep has been involved with business and technological projects targeted towards Oil & Gas and Metals & Mining clients. Sandeep has an M.S. in Chemical Engineering.
Kent. Gryskiewicz is a Senior Manager with Wipro’s Energy, Natural Resource, & Utilities Global Practice. Mr. Gryskiewicz is accountable for global strategy, delivery, management, and growth of the Digital Oilfield Solutions program for a Super Major. Mr. Gryskiewicz has over four years of major technology deployment in the Energy space. Prior to working in the energy sector Mr. Gryskiewicz played a similar role for US Government agencies. Experienced in national and international political, defense, and energy sectors, Mr. Gryskiewicz has cross-cultural business fluency in the Middle East, Europe, South East Asia, and Americas. Mr. Gryskiewicz is fluent in English, Turkish, and conversational French.