The Value of Digitalization

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Digitalization allows a process plant operator to not just manage day-to-day performance of their plant safely and reliably, but to also anticipate and respond to swings in market dynamics. Digitalization assures that the plant will operate at its true optimum, squeezing down on the gap between potential and realized margin.

The value that can be derived from data, as a result of Digitalization, is limitless—yet many within the industry do not know how to utilize this new influx of data effectively. To be ready for Digitalization, the impediments to data utilization must be addressed. A wise approach to this is to perform a readiness assessment and to tackle any readiness issues before embarking on (or perhaps in parallel with) a Digitalization initiative.

Digitalization

Situational awareness is also a crucial step – knowing how the plant is and has been performing in absolute terms (‘Hindsight’); understanding where it has capacity for improvement vs its constraints and optimum capability (‘Insight’), predicting responses to changes (‘Foresight’) and assessing the success and value of such changes (‘Oversight’).

Digitalization accelerates information flow, increases the power of analytics and automates much of the execution, which greatly condenses the decision/execution time horizons, allowing strategic business decisions to be made in real-time, and the results to be visible and available almost immediately.

Our approach to sustainment of Digitalization value entails going above and beyond compliance with how new digital applications are implemented, to one where there is a clear sense of ownership by the organization, especially front-line operators, through recognition of the added value of the applications. Achieving this entails (i) Goal monitoring and economic stewardship; (ii) Knowledge management; (iii) Management of change and (iv) A value vs cost mindset around technology and capability refresh.

Digitalization creates and sustains competitive advantage and is one of the key strategies a plant can adopt in pursuit of operational excellence. Despite this, many in the industry still remain confused or irritated by Digitalization. Some feel it is merely an IT issue and do not understand its relevance for operations; some are frustrated by the plethora of buzzwords; some see it as hype and fail to see the value proposition.

Digitalization leaders, however, see it as a holistic business issue and are already making huge strides forward in productivity, efficiency, flexibility and agility. Those who are not realizing the value Digitalization has to offer risk being left behind. Failure to adapt and transform means that the magnitude of value being lost will continue to increase – the digitally wise will consume the laggards in the market.


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Duncan Micklem

Duncan is responsible for KBC’s business strategy and marketing function. Duncan started his career in the engineering industry with AMEC, where he provided health, safety, environment and liability advice on mergers and acquisitions. After moving to KBC, he has held business management roles focused on business development, strategy, restructuring and planning. Duncan holds a degree from the University of Exeter, UK, an MBA from Cass Business School, UK and various Marketing qualifications from Cornell University, USA. In his spare time Duncan is an avid sportsman although his three young children ensure he has little spare time!