Commissioning and completions have long been neglected as critical components of project delivery. Poor handover processes generate unexpected costs and delays, resulting in inefficient operations and safety risks. To learn more about commissioning and completions, watch the on-demand webinar.
How do we cure the multi-million-dollar handover headache?
When commodity prices were booming, few companies involved in the execution of capital projects spent much time quantifying the costs of a poor handover of asset information from the project to the operations phase. There may have been a general sense of “we can do this better”, but with business booming, there was no sense of urgency to address the issue.
However, times have changed and the financial losses due to prolonged or incomplete handovers have become yet another burden for asset owner operators (OOs) to bear. A recent study by the ARC Advisory Group found that inefficient, incomplete capital project information handover can add more than 1 percent to an organization’s total capital project costs.
In other words, if you’re executing billion-dollar megaprojects, you could be losing tens of millions of dollars through inefficient handover alone.
There are multiple ways to address this problem, and OOs and EPCs alike have roles to play in adopting the technologies and work processes that will make efficient handovers the norm, rather than the exception.
We asked Glenn Boyko, Hexagon PPM’s completions and commissioning guru, to explain how a robust completions and commissioning management system is one small but essential part of the cure for the industry’s multi-million-dollar handover headache.
GetSmart! Team: What are some of the key challenges OOs are facing around completions and commissioning?
Glenn Boyko: Capital projects are plagued with duplicated content, duplicated effort and manual custody transfers that are handled through brute force, EPC in-house tools and uncontrolled spreadsheets.
Throughout the typical project, an OO can experience any of the following:
- Inefficient and error-prone engineering data collection and validation, leading to inaccurate planning and progress reporting
- Lack of visual reporting to identify areas of high-risk scope, schedule and/or budget creep
- Information accessibility challenges hindering completions and commissioning planning and execution productivity
- Poor equipment history prior to own/operate voiding warranties
- Insufficient information to manage assets at custody transfer dates, potentially delaying depreciation of assets
- Delayed asset management setup and loading creates exposure due to the Inability to manage high risk assets
As a result, the burden is on the OO to develop an information handover strategy at the end of the project to consume all this data. This is a very costly and painful effort.
What can OOs do to address this issue?
Increasingly, OOs are standing up the project technology stack and extending it to engineers, constructors and vendors for their participation. This reduces the effort required to meet turnover and handover requirements by enhancing visibility, transparency and repeatability across the entire project lifecycle, from front-end engineering and design through to operations and maintenance.
The completions and commissioning solution sits between the upstream engineering design tools / scheduling systems and downstream enterprise asset management systems (see below for an example from the Hexagon PPM project execution ecosystem).
What are some of the benefits of an integrated project execution environment, specifically for commissioning and completion professionals?
Firstly, a single project technology stack allows for the collection and validation of engineering data progressively and in a very efficient way. This leads to increased efficiency and transparency in the completions and commissioning department.
Secondly, digitalized workforces are far more efficient in the field. For example, workers can validate engineering information when inspecting equipment.
Thirdly, the OO will have a full digitized history of equipment before the operations phase, ensuring warranty compliance and more efficient depreciation and management of assets at custody transfer dates.
How are OOs leveraging digital technologies to demonstrate best practices in completions and commissioning?
Cloud-based digital execution enables the OO to create the environment, then extend it to participating companies. The completed projects can then be used as a digital project execution blueprint for use on future projects, including shutdown/turnaround work, once adjusted to accommodate lessons learned.
The standardized project execution processes allow OOs to realize faster time-to-value by removing the conventional approach to project setup and standardizing the reporting across the entire portfolio. Kentech STS group has seen first hand the value add for repeat clients in the digital project set up. Clients typically follow general procedures for developing their facilities and hence their project work breakdown structure.
The execution of one project allows both the client and Kentech commissioning management team to benefit from the experiences on the first facility set ensuring a swift implementation of the smart completions database for proceeding projects. It also gives functional organisations such as Kentech multiple project oversight, a valuable tool when assessing regional performance of commissioning teams.
We also have been able to extend this benefit to our completions work pack development and hosting of Kentech’s advanced work packaging (AWP) system to ensure we put our teams on the plant site with systems that has been tested in multiple commissioning environments.
What’s the Difference in Completions and Commissioning?