Picking a DCS: Who Decides and How

Here Are the Results of a Survey of Who Makes This Important Buying Decision and What Criteria Come into Play

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This article was printed in CONTROL's December 2009 edition.

By Willem D. Hazenberg

The choice of a distributed control system (DCS) for a process company is one of the most important ones it can make. First, it is expensive. Average cost for a DCS is $1.5 million. Expenses for the selection process alone can run  from €100,000 (approximately $150,000) for one project to €3 million (approximately $4.4 million) for a corporate-wide implementation. Investments in large-scale projects can run as high as €30 million ($45 million). The service costs over the lifetime of the DCS can run into multiples of the initial investment. Vendors typically will spend upwards of €35,000 ($50,000) to make a sale. Second, the selection process takes a long time and involves a lot of personnel. Selection alone can take nine month to three years, and the implementation can take another 12 to 24 months.

Then, the decision involves a long-term investment. The average life expectancy of a DCS is 17 years. Also, the choice of a DCS will have profound effects on the efficiency, productivity and profitability of an operation. It's a decision that companies can't afford to get wrong.

At the same time, local employees tasked with making the decision about the firm's next DCS are often at a disadvantage. Because this investment only takes place every 10 to 17 years, most selection team members don't have the knowledge needed to perform this analysis. Selecting a control system also is uncertain due to the subjective judgment of decision makers. The main problems are: 1) the exact criteria for selection are not known; 2) the method for deciding is unknown; 3) there are multiple actors, each with their own biases and preferences for particular suppliers; and 4) internal politics.

So, the choice of a DCS is not always univocal, and the relationship between the business case, chosen solution and selection process isn't always there. This disconnect will have growing consequences in the future. In 2006, the value of the DCS installed base more than 20-years-old was more than $65 billion, making them replacement candidates soon. As a result of my research, I've concluded that process users need to choose DCSs in a more univocal way, and so make their  decision process more transparent.

Within the framework of my MBA thesis, I conducted a literature review and interviews alongside a survey. Research was done in 39 countries with 166 people about the selection criteria and processes for the purchase/migration/expansion or replacement of a DCS. The respondents work for end users, DCS suppliers, system integrators and engineering companies.

Table 1I investigated what kind of value proposition end users wanted from their DCS vendors, and asked DCS vendors the same (Table 1). For end users, it was not the superior product, but the best product for the best price that was the most important value proposition.

When I looked at end users' expectations about the technology, I discovered that "cutting edge" was not necessarily what most of them wanted. More then 70% of all users call themselves industry followers, and 51% said they will wait one year after the first product is released before considering it. Twenty-four percent said they would wait more than a year to install newly released products.

Multiple Phases of Selection

There are multiple phases in the DCS selection process (Figure 1). The first is the trigger point. A company decides it needs a new system for any number of reasons. The primary business case and trigger point to start the process of buying a DCS for replacement and migration projects is external—the DCS supplier will no longer maintain the current system. The vendor ceases support, and replacement parts become unavailable.

A second reason for many customers is the need to reduce equipment maintenance and related expenses, or the desire for process improvements and increased production. So, it's reasonable to say that migrations and replacements are more driven by fear of an obsolete system than by potentially improving capacity, gaining better control or other functional possibilities of a new system.

However, when considering extending an existing system or choosing a DCS for a greenfield project, the main drivers are improving automation, availability of improved algorithms, ability to get business information to the workplace through real-time data to enable faster decision-making, and automatic start-up and shutdown routines. In these cases, an internal desire to improve automation is the driver.

Once this trigger point is reached, a funnel effect begins to take place. The choices, determined by a variable group of people and a variable set of criteria, continuously narrow the options until one vendor remains. The first set of narrowing variables is corporate guidelines about preferred vendors, usually defined by the purchasing manager and an engineering consultant. The field of possible DCS vendors is narrowed to between one and five vendors—often only one or two. Government or related organizations mostly follow government procurement rules, which often require choosing the lowest-cost or, in the best case, the most economically advantageous tender.

Next, the selection process begins again, and the long list is narrowed even more, using more specific criteria, until finally the decision makers arrive at one choice.

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