Peter Martin on Executive Turmoil and Rightsizing

Invensys' brilliant vice president of performance management, Dr. Peter Martin, gave his usual exciting keynote. He talked about the effect of activist boards of directors since Enron and the other CEO debacles, and how CEOs have less than a year in general to perform, or they are gone. How can you prove to your executives that you are the most valued employees in your company? You need to realize your worth. You would be shocked at your worth. Your worth is phenomenal. You provide more value than any other part of the organization. You must demonstrate your worth-- your CFO isn't up at night demonstrating your worth. If your CFO doesn't know what your value is, your value is zero. And the response to zero value employees is rightsizing! You need to use technology to measure business value. Use technology to measure...think beyond that. Use technology to DRIVE business value. --beyond automation --real business problems --success- executives use your solutions daily-- and they know the data came from you. John Snodgrass at Chemtura is a real example of how to do this. --strong automation technologist --business problem solver Snodgrass just got a big promotion and is moving into more of a business role, since he proved his value. Some executive feedback from AMR--w hat executives want to see from YOU: multisite performance analysis enterprise visibility of production financial performance multisite aggregation of data from production assets centralized repository for multi-site data ability to compute a composite metric from multiple KPIs ---and on, and on, and on... When two organizations merge, each tries to submarine the other. Don't submarine IT, and don't let them submarine you. As engineers you are measured on the capital budget. The problem is that when you hit 100% of ROI with a capital project, you don't get any more credit! So we started to use KPIs. OEE, Cycle time, Waste, etc. We have developed a REal time accounting measure...why? It is the accountants that measure your business value. If you can produce from KPIs and thesesr real time accounting measures, you can measure Lifecycle benefit and then you can prove your continuing value to the organization. If you do nothing else than report these values, the average improvement in performance is 3%! Return on investment is always negative. Once you have recouped your investment, you have bottom line value, but nobody measures it-- and nobody can see it-- and so you don't get credit for it. All you get is blame for the red line that is the ROI line. ROI is always negative. So how can Invensys help you? Reduce the cost of automation, make the top line measurable, and reduce the lifecycle cost. We know that we can help you explain your worth. If we were playing baseball, and you were the best hitter on the team-- and we weren't measuring batting averages-- how would you know? How could you prove your worth to the manager? This is why we came up with the idea of asset performance management. There is a tradition of plant conflict. Have you ever noticed? Operators don't like maintenance. Engineers don't like IT. Nobody likes accountants. Operations and Maintenance are the two groups that have a larger impact on the bottom line than anybody else. Operators push maximum utilization. Maintenance maximizes availability. These are often mutually exclusive goals. Yet, like a driver and the pit crew in a race, winning companies are tightly integrated. The measure is, is the car good enough to win. Asset utilization and availability are inverse functions. Asset economic value is the middle vector. Real time accounting is the measure of that vector. When you only manage asset utilization, we call that process management. When you only manage asset availability we call that asset management. When you manage asset economic value, you manage Asset Performance Management. If you aren't the most valuable person in your organization, we aren't the most valuable supplier in your organization. The tools exist to do this, engineers! If you can start measuring Asset Economic value, the average 100% ROI is less than 3 months, with a sustainable positive cash flow for years. In 6 months you have doubled your investment. In 9 months you will have tripled your investment...and if you can measure it, and you can prove the measurements, you will turn rightsizing right around. The problem is that there are real barriers to implementation. There are islands in the plant that you need to work with to make this happen. We need to break through the islands. That's what InFusion is intended to provide you-- a platform for interconnection and collaboration between IT, accountants, operation, maintenance, and management. We began with the concept of SOA-- service oriented architecture. A paradigm for organizing and utilizing distributed capabilities that may be under the control of different ownership domains. It provides a uniform means to offer, discover, interact with and use capabilities to produce desired effects consistent with mesurable predonditions and expectiations...the OASIS definition. In other words, we want to bridge the islands-- not remove or replace them. We took the .NET architecture kernel, and wrapped around it the "industrial services" that are needed to bridge those islands: common name space, object management, inter-process communications, common object environment, built-in softwre redundancy, fault tolerant server support, application version management, extended security services, application objects, application model, distributed application deployment, and other services that make it possible to function in the automation space. We refer to that wrapper as Archestra. The problem with Archestra is that a service oriented architecture doesn't do anything. So we had to do something with it. So we had an architectural convergence from the Invensys offerings using Archestra to produce an enterprise control system-- and that is what became InFusion. A real enterprise control system. On average, only about 15% of the power of the average DCS is actually used. IA system users have a head start. InFusion is based on the I/A Series system. Now you have expanded functionality, with low cost interconnectivity, engineering environment that is multisystem, multiplant. You ahve enterprise scope connecting to SAP and other ERPs. You have SCADA, Asset Management, and advance software and MES all udner the same roof. And you have retained the I/A series ssytem Traits
  • continuously current: you can move from a system from the 1970s into InFusion directly
  • backwards compatibility and migration are easy
  • take little steps forward
You can start using the Infusion tools as you need them, and then start connecting to other systems. Then you can work into collaboration. Put together collaboration walls, and other tools. Pretty soon, you are doing asset performance management. Because that's what those executives we talked to want you to do. We believe that's our role. If we aren't driving value for you , we aren't doing our job. We should be applying the techniques of control to the business. The same processes that you control on the plant floor work at the business level. Sudipta Bhattacharya of SAP says that he is jealous of Invensys because, "You do control, we do management. Do you know what management is? Management is dealing with processes you can't control." YOU have the keys to the performance of your company in your hands. How do you apply engineering techniques to engineer the business? How do you provide clearly visible and measurable results? Think broad! Engineering can take the leadership position in our companies. If you can make that transition, you will show your worth to your company. I guarantee it.