Hydrocarbon Processing - March 2021 - 21

Digital

Z. BURKE
Radix Engineering and Software

ROI is the secret sauce for sustainable digital
transformation
tant to try and add context to the collected
data, where possible. This extra information will help ensure it can be effectively
wielded by as large a group as possible.

Digital transformation is a broad term
that can mean vastly different things to
different people. Within a given company,
it is easy to gain consensus that such a
thing is necessary to stay competitive, but
it is tremendously difficult to define what
it looks like in practical terms-much less
where to begin.
Of course, it is infeasible to lay out a
sequence of steps that is right for every
company in every industry. Rather, it is
more useful to talk about digital transformation in terms of levels of maturity,
each centered around the key variable
needed to make the process sustainable:
return on investment (ROI). For digital
transformation to be beneficial and longlasting, it has to complement business
goals. It is important to keep expectations
realistic with respect to the current level
of digital maturity. Five such levels of digital maturity are discussed here.

The KPI stage. Well-designed key performance indicators (KPIs) reflect how
well something is doing within a given
scope (i.e., enterprise, division, area or
unit). An organization in the KPI stage
would hopefully leverage them in two
ways. First, these KPIs should guide both
short-term and long-term strategy. ROI
here comes from strategic decisions being
backed by evidence. Secondly, by setting
tolerable ranges for KPIs, the business can
be alerted when a particular group may be
falling behind and needs assistance. The
ROI is realized here by ensuring everyone
in the organization is able to play their
part in the overall business strategy and is
getting the help they need.

The experimental stage. An organi-

The prediction stage. Once enough

zation in the experimental stage has acquired some basic digital tools but still
lacks a cohesive vision for what it hopes to
achieve. Solutions built during this stage
are commonly built by intellectually-curious individuals attempting to solve smallscale problems. These efforts can provide
an ROI that is well-aligned to business
priorities within this individual's area of
responsibility, but these contributions are
unlikely to be easily scalable or repeatable.

The aggregation stage. Organizations
in this stage are recognizable by their ongoing efforts to collect increasingly more
data in one place. Some may narrow their
focus to a specific target area of the business so they can quickly move on to the
next phase of this maturity model within
this scope. Meanwhile, others will attempt
to collect as much data as part of a broader
scope. Either way, for ROI to be realized at
this stage, discipline is critical. It is impor-

data is available to form KPIs that reflect
how individual groups are contributing
towards overall business goals, organizations in the prediction stage are in a good
position to forecast what state a system
will be in and when. This impacts ROI
in two ways. The first lies in the triggering of interventions in the process-it is
possible to carry these out pre-emptively
if a downward trend with respect to an
important KPI is detected early enough
(whether this means mobilizing resources or changing strategy). The second impact revolves around the refinement of
this strategy. More robust models of the
interplay between variables means evidence can be more effectively wielded to
achieve the intended outcome.

The actuation stage. Unlike the preceding levels of digital maturity, organizations in the actuation stage are much more
able to start using digital tools not just for

knowing, but for doing. This means an organization's prediction capabilities have
earned so much confidence that digital
tools no longer just inform decisions but
are able to carry them out in real time. An
excellent example of this is an advanced
process controller (APC). Instead of people having to specify set points for their
control systems to hit, tools at this stage
can calculate a set point based on a set of
optimization criteria for the process. The
ROI seen at this stage can be quite lucrative. Not only does automation allow for a
much finer level of control that can more
rigorously optimize for business-critical
output variables, but it frees up human
operators' attention for other things.
Takeaway. Needless to say, advancing

through these stages can be quite an undertaking. Again, ROI should be a key
variable for prompting leaders on where
to focus. Having a good grasp of the ROI
in a specific situation provides an idea of
what resources can be viably committed,
as well as what expectations should be
along the way. Digital transformation is
a journey and being able to promise and
deliver on ROI is key to sustaining it over
the long term.
However, the skills needed for such
an effort can be hard to find. Fortunately,
there is a rich ecosystem of vendors and
service providers that offer the tools and
the expertise needed to develop a transformation plan, put it into action and keep
it on track. Even if the intent is to build
these capabilities in house, there may be
a clear ROI to supplementing teams with
expertise from outside.
ZACHARY BURKE is a Senior
Systems Engineer at Radix
Engineering and Software.
A mechanical engineer by
discipline, he specializes in
operational intelligence solutions
for industrial companies. The author
can be reached at Zachary.Burke@radixeng.com.
Hydrocarbon Processing | MARCH 2021

Hydrocarbon Processing - March 2021

Table of Contents for the Digital Edition of Hydrocarbon Processing - March 2021