Never underestimate the degree of clarity that a fresh pair of eyes can bring to a complex situation.
Late one Sunday night a few years ago, my business partner and I were discussing the Oil & Gas markets our new IT company could service.
In particular, we were discussing how to best use IT to maximise the financial value of a) the oil and gas products flowing through a refinery belonging to one of our clients, and b) the huge quantities of data used by the business.
We had many ideas about creating applications to provide a joined up view of how the exploration and manufacturing businesses interacted, but we were struggling to define an appropriate methodology that would put IT in a business context.
For days we had been trying to come up with a way of bridging the understanding gap between business and IT, but with little success.
On the table in front of us were a couple of A0 size Piping and Instrumentation Diagrams (P&IDs).
My business partner’s brother, a man who freely admits he has the technical knowledge of a pebble, wandered by and asked what the diagrams showed.
We patiently explained that the P&IDs were print-outs from a computer model of a nearby petrochemical complex. The computer model held a representation of the interactions between individual assets of the plants - things like pipes, valves, pumps, meters and sensors.
We described how the computer model and P&IDs displayed and communicated how the assets were connected; how the assets interacted with business processes; and how the flows of oil and gas products through a business unit were measured and valued.
Assets that did not add value to or support a business function could be easily identified and removed or reassigned. Also, the cost to the business of failure of an asset could be evaluated and steps taken to mitigate that risk.
“One of the great things about P&IDs”, I said, “is that by using them as a visualisation and communication tool, the engineers and the business guys quickly see the big picture and can easily understand each other.”
We paused for confirmation that the penny was beginning to drop.
After a few moments of silence, The Pebble, as we affectionately call him, frowned and asked,
“So why has this never been done for IT and business…I mean…isn’t IT the flow of data between assets?”
The silence resumed. For quite a while.
The Pebble had pointed us towards the solution to defining a methodology that would put IT in a business context.
We realised that by thinking of IT as data flowing between business assets, the tried and trusted methodology used by engineers to communicate with the business could be adapted and applied to IT.
Data flows in the Oil and Gas Industries
For the last thirty or so years accurate flow measurement and analysis has been the key to optimising the productivity of plant assets in the oil and gas industry.
As technology improved from the late 1970s onward, the flow of oil and gas products became analogous to the flow of data.
Flows of oil and gas through a plant used to be understood by reading values from analog flow meters. Each meter was inspected by an engineer and values recorded. Data such as temperature, pressure and product flow would then be manually entered into a computer for analysis.
Digital flow meters began to replace analog flow meters, which enabled readings to be entered into a model in real-time.
As more digital equipment came online the business gained a better understanding of how the product flowed through a plant.
Sensors could be attached to nearly every asset (things like pipes, valves, and pumps), providing more and more snippets of data and enabling a deeper analysis of the interactions between assets and product flows.
Through interpreting the numerous readings taken at a single point in the plant, rich information could be gleaned about how the product was flowing at that instant.
By expanding this single point into hundreds of thousands of points along the manufacturing process, it was possible to see ripples in the data as the product rippled through the plant.
The flow of data became analogous to the flow of product.
The business started to react and adapt to the changes it saw in the data flow faster than it ever could to changes in product flow.
By linking the model to the commodities markets the real costs/values of flow could be displayed, monitored and trended as dollars per second, rather than the more usual tonnes per hour. Why? So business processes could be optimised around value, and the contribution each asset made to the cost/value of the flow could be evaluated in business (monetary) terms.
The importance of avoiding system down-time became clear.
Data flow is critical today
Today, business resources and IT assets are either providers of data, consumers of data or provide the conduit through which the data can flow.
The flow of data between business assets is the life-blood of every modern organisation.
People provide and consume data daily, as do applications and systems. Hardware and cables act as conduits through which data flows: between desks, through office and corporate networks, across the internet, through deep sea cables and via satellites.
Across all businesses, the equivalents of the pipes, valves, pumps, meters and sensors of the oil and gas industry are the people, hubs, cables, routers, servers, and desktops through which data flows.
Data flow is at the heart of 21st century business. Supporting, processing and optimising the flow of data are critical to maximising business performance.
The sole reason for ITs existence is to manage the flow of data.
© Paul Wallis 2007. All rights reserved.
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