Following the mother ship
Ten years ago, many in the industry realized that sophisticated IT systems could allow plants to become more autonomous. At that time, it was widely believed that most plants in portfolios would control their own profits and losses while delivering revenue to their corporate owner. However, the research suggests that plants have become less, rather than more, autonomous.
It appears that corporate IT and central engineering, both corporate functions, are increasingly driving software decisions that affect the plants—even if there is, as one respondent put it, “good segregation between business systems and plant systems.” One manager responsible for multiple plants noted that “all plant systems must now integrate with the corporate business system,” which he referred to as the “mother ship.”
There’s an undercurrent to this trend, however. As owner/operators have embraced fleet monitoring and diagnostics (a centralized strategy by nature), plant engineering staffs and expertise have been hollowed out. Some plant managers complain that centralizing engineering makes it harder for them to fully realize the plant performance gains that software makes possible. That’s perhaps inevitable, because one size rarely fits all in today’s world of plants with different designs, configurations, and equipment, operated by staffers with different skill sets. The tension between centralized and decentralized management is palpable and constant, with the former seeming to have the upper hand at present.
Initial vs. final costs
Getting a handle on software costs is always a challenge. IT projects are rarely defined in enough detail at their inception to make estimates of their cost more than wild guesstimates. Usually, “mission creep” sets in to make deployments far more expansive than originally planned. The research has confirmed a rule of thumb, often quoted by software professionals, regarding expenses: the final cost of a software implementation is around five to seven times the cost of the software itself.
Asked to quantify this cost ratio based on their experience, power plant owner/operators cited ranges from 1-2x to 5-10x. One plant manager said it could be as high as 20x, depending on how you define “fully implemented.” Representing the other end of the range was one fleet manager, who pegged the cost ratio at 1-2x because his plant “only used the vendor’s people when they needed them” and instead relied on in-house staff.
A prerequisite for keeping costs in check, meeting project schedules, and maintaining continuity of software use at the plant after a new deployment is having the right team in place. More than one owner/operator stressed that success requires at least three elements: dedicated champion(s) at the plant to guide the project, staff or corporate person(s) intimately familiar with the software, and the vendor’s experts. One user complained that its new process optimization software is troublesome because the supplier limits access to the package’s source code. He added that the supplier of the package it replaced was more open about how the software does what it does.
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