By Bill Herdman, Energy Industry Market Manager, Primavera Systems, Inc.
The global trends toward privatization and deregulation have radically altered the business landscape to which the utility industry has been accustomed for more than half a century. Never has it been more important, or more difficult, for utilities to adopt highly efficient, nimble and effective processes and technology to help effectively manage outages and maintenance projects at their plants.
A deregulated market has forced utilities to examine their current business models more closely, because they can no longer depend on regulatory requirements to protect their markets from new competitors. New utility companies are not only taking market share, but also luring away valuable employees.
The industry is already suffering from a severe lack of talent, due in large part to highly skilled resources that are reaching retirement age. Additionally, in an industry that depends so heavily on contract workers to get work done, there simply are not enough skilled contractors to meet the high work demand. Utilities are not just short of people; they are also in danger of losing critical industry knowledge that, unless captured, may be permanently gone.
In this environment, where labor is short and the competitive stakes are high, utilities need to manage outages and maintenance projects as efficiently as possible in order to make maximum use of the resources available and keep their plants’ uptime to 90 to 95 percent. Thorough planning is the key to success.
Many utilities lack the technology systems they need to operate at peak efficiency. For example, it is still common to use spreadsheets – which are not accessible to everyone – to manage outage and maintenance projects and resources. Without access to that valuable information, managers must make crucial business decisions in silos. Additionally, hundreds of valuable man-hours a year can be spent just to keep these spreadsheets updated.
Utility companies are beginning to realize that establishing best practices and implementing an integrated project and portfolio management (PPM) solution will deliver a significant increase in performance and savings in improved operational efficiencies. In fact, an integrated PPM system can make a company more profitable and also allow it to minimize claims, improve engineering performance and increase productivity through effective workforce planning.
Implementing a PPM system and establishing operational best practices at the plant level involves the design of a consistent set of planning and management principles across the organization. These best practices set guidelines in using technology for everything from managing a single project to supervising the full portfolio of projects in a clear, transparent manner. Following consistent processes helps management and employees understand exactly what is expected of them; more importantly, it streamlines the decision-making process and helps companies enforce standards across all levels of the organization.
Among other requirements, the implementation of PPM system facilitates an integrated business environment, both to support a common view of key performance metrics, which enable consistency and collaboration to bolster shared business values, and to provide executives with an apples-to-apples comparison of vital statistics for project progress across the organization and, thereby, allow them to truly understand the global status of costs and schedules for every project.
Scheduling is at the core of any PPM system. To keep up with rapidly changing events on today’s projects, a system must be dynamic, so that changes cascade automatically through the schedule, quickly updating all relevant parties so that contractors show up at the right time with the right materials to do the right work.
Project management encompasses much more than scheduling; however, to be most effective, PPM efforts should integrate a wide array of functions, including collaboration, resource management, risk management, cost assessment and project forecasting – all of which give management the full overview of existing and future projects.
For example, on a plant turnaround activity, project managers, contractors, engineers and executives all need to be kept abreast of any changes to the process and progress in real time if the plant is to be back online quickly. People need to be able to work together and share information easily, without having to collect information from multiple sources. An integrated PPM system facilitates collaboration and grants access to the latest information in a timely manner, helping ensure project success. It can also be used to capture historical information, so that, when the next plant turnaround takes place, managers can use existing data to improve upon best practices and get new resources up to speed easily. As a result, the plant is back online quickly at a lower cost.
An integrated PPM system also helps managers keep up-to-date records on the resources that are available, their skills and their location, as well as historical information on contractors – the work they have done, the quality of that work, their qualifications and their availability. Most importantly, the system shows what the work pipeline looks like across the entire organization and can match that against the resources the organization will need. This forecasting capability is a powerful weapon in the battle for talent.
Risk management is another beneficial function. Systems now have the ability to graphically present risks and offer controls that allow managers to see the likely results of different risk mitigation plans. Evaluating project risks proactively enables executives and project managers to better prepare for the unexpected so that, when a plant goes down or when problems arise in the midst of a turnaround, an action plan can be put into place and executed immediately.
The utility market is becoming more competitive every day, and with the outlook on labor shortage, it does not look as if the situation will improve any time soon. But even in this environment, it is possible to reduce the amount of time and money required to bring a plant back online after planned maintenance or an unexpected outage. Through the disciplined application of best practices and the adoption of a robust integrated PPM system, utilities can do much better than just survive during these difficult times. They can thrive.