2009—Retrospective & a Look Ahead
It is not the strongest of the species that survives, nor the most intelligent,
but rather the one most adaptable to change.
— Leon C. Megginson paraphrasing Charles Darwin
2009 is a year that few will be able to forget. The economy has had a profound impact
on all of our customers—particularly those directly affected by the severe drop in
global commodity prices that occurred in late 2008. The challenges were compounded
by a number of long term issues: security concerns, regulatory compliance and a
growing imperative to go green.
The year began with the worst economic instability in a lifetime. Oil prices had
plummeted more than 70% from their peaks in the previous July, leaving an anxious
energy sector in a state of limbo and many major projects on hold. The mining and
processing sectors faced similar setbacks. With the details of government stimulus
programs still uncertain and icons like GM facing bankruptcy, few were willing to
predict what a recovery might look like, let alone when it might occur.
As 2009 progressed, improvements in the economy came more rapidly than predicted,
but they brought a sobering reality. As the year closes off, we are not seeing, nor
do we expect to see, the classic "V-shaped" recovery that people had hoped for. In
his September 2009 economic update, Warren Jestin, Chief Economist of Scotiabank,
summed up a consensus that has also been voiced by President Obama and other world
leaders when he said, "The road to recovery won't take us back to the world that
existed before the sub-prime crisis began."
New Pressures on Information Systems
This new economic reality means that the normal caution that accompanies a recovery
will not only be accentuated, but also prolonged. Staffing will be limited, orders
will be left until the last possible moment, and larger projects will be broken up
into smaller segments. Economists are warning that the days of dependable growth
are gone, at least for the near term.
Industrial companies, therefore, will have to exercise unprecedented control over
their operations. Processes will have to be simplified and automated, waste will
have to be eliminated and expenditures will have to be monitored with greater
vigilance. Adaptability will become an essential survival skill as organizations
compete in an atmosphere of uncertainty.
Information systems will be key to gaining this level of control. In order to
successfully adapt their business and industrial processes for the leaner times
ahead, companies will have to get better at storing, correlating and accessing
the data that is key to operations.
Regulatory Pressures
There was no slowdown on the regulatory front; 2009 saw significant activity as
organizations work to comply with security and environmental mandates.
Electrical Utilities
North American utilities will continue to upgrade their compliance with North
American Electric Reliability Council (NERC) Critical Infrastructure Protection
(CIP) standards. With concern about hackers on the rise—an oil rig was recently
damaged following a cyber attack—cyber assets have been included in two standards
that were introduced in 2009.
Electrical distributors are also adapting to a much more complex billing environment.
Smart metering is being installed in many jurisdictions to support time-of-use pricing
and the monitoring of power that is fed by local sources into the grid. The net result
is an explosion in the amount of data that has to be managed; readings that once took
place every 6 months might take place every 15 minutes.
Process Industries
As was the case with utilities, regulators showed a growing concern about the security
of processing facilities. ISA 18.2-2009 mandates tighter management of alarm systems
that protect critical assets and ensure safety for workers and the environment.
The Environment
Environmental regulation is also moving forward. In September, the U.S. Environmental
Protection Agency (EPA) announced the greenhouse gas rule, which requires companies to
report their greenhouse gas emissions. The agency has also begun to collect data from
the largest greenhouse gas producers, who account for approximately 85 percent of total
U.S. emissions.
Uncertainty will remain a factor as international powers negotiate over a comprehensive,
long term agreement. It is clear, however, that there will be more regulation and that
there will be a growing need to monitor and control emissions and other factors that
increase the carbon footprint.
Lean and Green
Green isn't just about legal mandates. Although the issue was eclipsed by economic
worries in 2009, the environment remains a major public relations issue, and is a
common topic in corporate annual reports as corporations compete to associate their
brand with a greater commitment to sustainability.
Another emerging issue, one that will gain prominence in coming years, is the link
between green and efficiency. Wasteful practices that damage the environment have
become profitable targets for cost-saving lean initiatives. Energy use is the most
common, but other areas are emerging, such as wasted materials. In the mining and
process industries, where a small percentage of waste can make the difference between
profit and loss, the synergy between lean and green can be very tangible.
Establishing the synergy between lean and green is an information-intensive activity.
Companies will need powerful tools to analyze data from both compliance and cost
saving standpoints.
The Need for Unified Information Strategies
Information systems will be essential in this challenging environment. By leveraging
the data that they already collect, companies can make the processes that control their
business more visible, and achieve greater control in adapting them to changing conditions.
But many companies don't have unified strategies for developing this level of competency.
Instead, they deal with process issues on an ad hoc basis. The problems with this approach
are:
-
Economics. If a process is improved in isolation from the rest of the
business, synergies will not be found. For example, if environmental compliance is handled
reactively, savings in energy and other potential economic advantages are not taken into
account, and consequently, are not leveraged to fullest advantage.
-
Duplication. Ad hoc processes tend to conflict with each other and
have to be supported by manual processes that are error prone and time consuming.
-
Complexity. A patchwork of ad hoc process solutions turns an IT
environment into a veritable jungle of programming codes, data types and presentation
formats. IT departments in such environments spend much of their time firefighting,
and are often unable to provide decision makers with the real time information they
need to manage under rapidly changing conditions.
The Elements of a Unified Strategy
Matrikon’s Intuition Program encapsulates a unified strategy for enterprise-wide information
management competencies. Intuition serves as our roadmap for integrated solutions, and also
provides a useful model for companies that wish to improve their information processes. The
Intuition Program has three key concepts:
1. Context. Not all data elements are created equal. Most distributed environments
have a variety of data types and the context in which the data is used varies. An element of
stored data that means "X" to one application might mean "Y" to another.
The foundation of a unified strategy is to gain a unified view of all the company's data. Being
able to see all the data under a single pane of glass allows business processes and industrial
processes to be combined seamlessly so that the management view is not skewed by IT considerations.
It also makes it easier for individuals throughout the organization to correctly understand the
data they are viewing.
Standardization is key to providing a basis for enterprise-wide context. Intuition and MatrikonOPC
provide a common data environment that makes this possible.
2. Collaboration. Access to data by employees is a complex issue. Plant engineers,
line managers, accounting personnel and senior managers all have different needs when it comes to
information. There are privacy and security issues as well; permissions have to be assigned with
the appropriate protections in place, but without creating an environment that is difficult to use.
Collaboration systems allow people to access the right data when they need it, without forcing them
to jump through hoops to get it.
3. Action. Once they are able to gain access to the data, users need programs to
use it in their day-to-day business processes. Downloading large amounts of data to spreadsheets
results in manual processes that are time consuming and unreliable. Specific applications, on the
other hand, can provide a number of advantages:
-
Shared Task Management: One of the default methods of managing shared tasks, such as escalations,
is manual email. This is a huge time-waster, and results in critical tasks often falling between
the cracks. By automating the workflow component, action programs can make sure that steps are
taken and can sound the alarm when they aren’t.
-
Enforced Compliance: When managed manually, typically on a spreadsheet, maintenance becomes a
"maybe" instead of a sure thing. Workflows can ensure that critical tasks are executed in a timely
fashion and can also refuse to let someone sign off a task unless all of the required steps are
completed.
-
Reporting: Manual reporting is another time-waster that tends to be unreliable. Specialized
industry-specific applications can ensure the decision makers are advised of factors that are
critical to managing a constantly changing environment.
-
Automation: Many tasks don't require human intervention and can be handled more consistently
and efficiently if they are automated. Automated tasks can be executed easily at any time on
a 24/7 basis. For example, the condition of a process can be monitored continually and corrected
if certain parameters are out of tolerance.
A Modular Approach
A unified strategy cannot be achieved overnight; however, standards-based solutions can be implemented
in modular fashion. The Intuition Program, therefore, should not be seen as a blueprint for a
"forklift upgrade," for example, but as a general direction that can be pursued over time.
Product News
2009 saw a number of product releases: