Rather than reacting to change, or allowing themselves to be disrupted by it, forward-looking industry leaders are investing in digital transformation (DX) to adapt, achieve operational excellence and outperform peers. At Yokogawa’s 'Y-NOW 2020: DX Solutions for Tomorrow' event, speakers from Braskem, Chevron, KBC (A Yokogawa Company), Koch Industries and Valero, provided considerable guidance to those who are seeking best practices for their next steps in the digital transformation journey.
1. Plan around business objectives
“The journey begins with a digital roadmap,” stated Lívia Tizzo, Digital Innovation lead at Braskem. “The roadmap is a strategic business plan to bring change to the company. It is all-encompassing in the organisation and goes beyond technology, IT and OT.”
According to Lisa Williams, director, Digital Management at KBC, “Digital transformations promise the implementation of new technology to improve processes and allow people to excel. However, skipping to the finish line can delay projects and deflate the organisation’s motivation. Preparation and working on concentrated areas with an agile methodology is bringing success to DX efforts.”
Howard Elton, Process Control and Automation leader for Koch Industries, explained that his team began working on a roadmap that would lead to the plant of the future: “The first three years focus on milestones designated as ‘foundation’, ‘transition’ and ‘transform.’ It doesn’t need to be complicated and it doesn’t need to be perfect. It’s a journey, not an event.”
Andy Howell, CEO of KBC added, “It is very important for business objectives and the customer experience, rather than the technology, to be the drivers. It is also not a matter of simply taking existing processes and automating or digitalising them.”
2. Buy-in and change agents
Howell stated, “The team must obtain buy-in from stakeholders, those who are the prospective users of the new business processes and technology.” To which Williams added, “You cannot take an ‘if you build it, they will come’ approach.”
Tizzo’s experience is that it is critical to incentivise leaders and deploy common and measurable objectives for all managers across the organisation: “Unless the company adds new positions at the management or board levels with change agents enabled, progress will be limited.”
Regarding buy-in, Williams said that the most common pitfalls to avoid are related to communication: “If people are unaware of the reasons for the change, they are not willing to accept it and there is a lack of flexibility.”
DX requires good data
The experts all agree that a solid data foundation is a prerequisite to a digitally transformed enterprise. According to Jeff Bull, senior manager, Refinery Models at Valero, “Applying advanced methods will fall apart if the information feeding them is inaccurate and unreliable. If an organisation is not willing to take the steps necessary to establish a solid data foundation before applying advanced analytical methods, the likelihood that the tools will provide the correct answer is greatly diminished. Using tools to assess data quality is a vital step within any digital journey. Evaluate data sources. You probably have too many. Pare down to a reasonable number of data sources and software packages used to obtain that data. The ultimate goal is to connect corporate subject matter experts directly to the primary data sources.”
Nick Kenaston, technical team leader – Oils Planning at Chevron added, “Data quality is still a big challenge, but now there are novel ways to fill in data gaps. The convergence of first principles models and machine learning can help. This is a revolutionary approach to solving problems.”
A single version of the truth is critical
According to Bull, the Valero team knew that a single version of the truth was essential. The company is using Yokogawa/KBC’s Petro-SIM digital twin, which is based on a first principles model. “Using the model-based balancing and calculations in Petro-SIM, we were able to identify the results, collectively, as the one version of the truth for yield performance,” he said. “We need to have that reliance on a single set of information that everybody trusts as what actually happened, so that we can discuss what occurred yesterday, use that information to decide what we will do today and then what we will do tomorrow.”
Conclusions
Throughout the energy industries, digital transformation is no longer viewed as a matter of investigation and experimentation, but a strategic imperative linked to a company’s survival. The journey begins with a digital roadmap. Detailed planning is an absolute requirement. Efforts to skip to the finish line will end up delaying the project and deplete the organisation’s motivation to continue.
On the other hand, the program team should plan milestones in an agile manner and leadership must not be distracted by technology, but focus instead on C-suite objectives.
With any transformation, buy-in is critical. The DX team must secure it from the stakeholders, those who are the prospective users of the new business processes and technology.
Strong communication is a key, but ultimately, a successful digital transformation requires good data. The team must invest considerable effort in the evaluation of data sources and reconciliation. It is very important to deploy one, agreed-upon system, or ‘single source of truth’, which is available to everyone.
The transformed enterprise encompasses new business processes and technologies in terms of assets, operations and people, with analytics and business decision support provided through digital twin technology.
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