Leveraging an EPC 4.0 strategy to shape your future
Posted: August 04 2020
98% of mega-projects incur cost overruns and delays, find out how a data-centric approach holds the key to creating a resilient Capital Projects market.
There is no doubt that the business world is changing, becoming more competitive in this new digital age. Industrial companies must innovate to survive today and thrive tomorrow. A data-centric approach enabled through engineering in the cloud, holds the key to creating a resilient Capital Projects market that can flex and adjust easily to change both throughout a project’s lifecycle and wider changes that are impacting the market.
Facing a frontier of market challenges
There’s no doubt that these are the toughest times that the Capital Projects industry has faced. With recovery expected to be slower than that of the financial crisis, owner-operators and EPCs must pivot to protect both their short-term interests and longer-term future. As with all times of challenge, there are significant opportunities for those who are willing to embrace new ways. And now ever more so with the global pandemic, Capital Project companies are now feeling the pressure to up their game or risk being left behind.
A study from McKinsey* found that 98 percent of mega-projects incur cost overruns or delays. The average cost increase is cited at 80 percent of the original value, and the average slippage being 20 months from the original schedule.
Much of this comes down to data and how data is handled and stored in the engineering and design phase where errors contribute to 14.2 percent* of the contract value of a project alone.
The curse of document-centric systems
Many EPCs and Owners are still dependent on document-centric systems for both their capital projects and operations. Information is inefficiently shared by passing hard copy or electronic documents between people, disciplines, departments and even organizations.
Every exchange of information introduces a risk for error and inconsistencies that can propagate through engineering, procurement, construction and handover. This results in engineering and scheduling errors, material waste, rework, cost overruns and ultimately delays in start-up and full-scale operation of a plant facility.
What is required now is one unified, data-centric approach in the cloud, that keeps your information in one, secure centralized location to enable you to manage and validate change automatically.
By leveraging Industry 4.0 technology and work processes your workforce can collaborate and take control of the data, reducing the risk of errors, delays and increased project cost throughout the asset lifecycle.
At AVEVA this is what we call EPC 4.0. A strategy that enables you to take back control of your capital projects.
The advantages of migrating projects to the cloud
Major advances in cloud technology are revolutionizing data management – unlocking its potential and providing capital project teams with intelligent, actionable insights. Moving your engineering data to the cloud is the key to transforming project delivery. Having your data on the cloud is the next step towards a unified engineering approach and ultimately achieving Digital Twin. No matter their location, a cloud-hosted intelligent data platform works across your enterprise, bringing all stakeholders, teams, and individuals together.
With EPC 4.0, engineering data is stored in a single trusted data hub in the cloud, entire processes can be tracked in a digital environment from the engineering and design stage to procurement and execution, and through the final handover and construction phase and into operations and maintenance as the data core for the Digital Twin for your operating plant. We leverage these processes and workflows with three core pillars:
- AVEVA Unified Engineering
- AVEVA Unified Project Execution
- AVEVA Unified Learning
A cloud-hosted, data-centric strategy provides a single platform around which all engineering disciplines and stakeholders can align. By integrating all engineering tools users have access to a unified viewpoint project delivery is a more efficient and transparent project during every step of the project. Teams can better collaborate, and risks are identified earlier on in the process and mitigated.
This can have a significant impact on a project’s Total Installed Cost (TIC). The McKinsey study* estimates savings of up to 50% in capital projects based on the benefits seen in Manufacturing.
At AVEVA we have already seen a figure of 15% reduction in TIC for capital projects by leveraging a cloud-enabled EPC 4.0 approach. This means that on a $1 billion project you could cut cost by a $100 million. Just imagine what you could do with those savings...
*These cost savings are realized by mitigating capital investment risks at the process design stage, cutting engineering man-hours by 30 percent in plant design, reducing material costs in procurement by 11 percent, reducing field labor costs in fabrication construction by 10 percent, and using simulation learning to improve enterprise safety in the commissioning and start-up phase.
Digital transformation is here, don’t get left behind.
Read more about AVEVA Unified Engineering, AVEVA Unified Project Execution and AVEVA Unified learning to find out how these core pillars form the foundation for delivering an cloud-enabled EPC 4.0 strategy to accelerate your digital transformation journey.
If you enjoyed reading this blog and would like deeper insight into our cloud-enabled approach to EPC 4.0 we invite you watch our On-Demand Webinar about remote working, collaboration, and security. Enabling the new norm for Engineering Projects.
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