Achieving Capital Project Success Through Organizational Maturity
Every organization has some “big problem” that they need to address. New software, sensors, equipment, or analytics can sometimes be the solution to that problem. But sometimes there is a nagging thought that the real issue is more institutional than asset-based. Almost universally, companies that successfully leap into the Internet of Things (IoT) are already mature, efficient, and agile. They don’t need to solve nagging performance issues. They aren’t looking at software as a solution or performing maintenance by capital project. They’re making a step change to maximize already satisfactory performance metrics.
Most organizations can develop specifications, hire construction firms, and execute large-scale projects. But will the resulting systems be efficient and reliable for decades? Every system (equipment, software, facility) reaches a point in the lifecycle where replacement is the correct decision based on functionality, maintenance costs, risk, and performance. But did that system reach the end of life prematurely? Sometimes there are broader issues with planning, project delivery, maintenance, training, and technical competence that increase the cost of operation and shorten the useful life of a system. Capital projects seldom address those “soft cost” issues, and they carry over from old equipment to new.
Personnel, management systems, organizational structure, and data are no less complicated than physical assets. All assets require correct, timely, proactive maintenance. Being reactive to “soft” costs is just as harmful to the bottom line as running equipment to failure – probably more so because a poorly maintained organization will not properly manage its physical assets. Organizational problems like these decrease the value that assets can provide over their lifecycle.
Companies are often willing to invest millions in new facilities and equipment but hesitant to spend the modest amount of time and capital needed to get an unbiased evaluation of their management systems. Often when the problem is organizational or cultural, it can be harder to identify and diagnose accurately. Maturity has little to do with the age or size of an organization and can vary from site to site and department to department. It has much to do with consistent decision making and alignment of purpose.
A mature organization can focus on getting ahead instead of catching up. They can accomplish great things with well-trained personnel working in a clearly defined organizational structure to meet specific goals aligned with the corporate mission. Organizational change can take a long time, serious effort, and sustained top leadership support. A company that makes the necessary investments in human performance and asset management is far better equipped to leap into emerging technologies, like IoT.
Characteristics of a mature organization:
- Business decisions, including capital expenditures, are accurately planned years in advance and are based on logical, data-driven, and aligned criteria.
- There is both vertical and horizontal understanding within the organization at all levels.
- Decisions are driven by a deep understanding of performance, risk, and lifecycle, not value engineering and bill rates.
- Business processes are efficient and routinely evaluated to reduce lead time on approvals, react to changing context, and support ongoing operations.
- IT is integrated with other engineering disciplines and an active stakeholder in early decision making.
- Correct and focused data flows freely through the organization.
- Effective feedback loops exist throughout the organization.
- Software is properly installed, commissioned, and maintained with controlled access and well-trained operators.
- Training provides timely, engaging, and executable benefit to the user (i.e., not just “read and understand”).
- Asset registry (master data) is up to date and rigorously maintained.
- Data is entered once and populates to all the locations needed accurately.
- Drawings and technical documents are stored in a consistent, accessible, controlled system professionally managed by accountable personnel.
- Maintenance tasks have clear procedures, well-defined criteria, and are specific to the current state of the equipment and its environment.
- High wrench time among maintenance technicians
About the Author
John has 27 years of experience as an asset management specialist in several industries. He is a Certified Asset Management Assessor who has hands on experience as a submarine nuclear operator, industrial mechanic, maintenance technician, and building automation programmer. He spent a decade managing Class A commercial real estate and acting as owner’s representative for over fifty construction projects. He leverages this experience to help clients streamline processes, drive projects to completion, and maximize their value from assets.