by Gary Mintchell | Aug 18, 2018 | Asset Performance Management, Operations Management, Software
Who buys enterprise software applications, how and why? I ran across this article by a contact of mine, Gabriel Gheorghiu, Founder and principal analyst at Questions Consulting, with a background in business management and 15 years experience in enterprise software. I thought it would be most useful. I’m not an ERP analyst, but I have some background and training on the financial side of things. I think this analysis fits with other large-scale software acquisition projects, though, including MES/MOM, analytics, asset performance, and the like.
This will summarize some interesting points. I highly recommend reading the whole thing.
Before we begin, my brief take on enterprise software applications. How many of you have been involved with an SAP acquisition and roll out? How many happy people were there? Same with Oracle or any other ERP, CRM, MES, APM, etc. application. Why did using Microsoft Excel seem to go better?
Well, the big applications all force you to change all your business processes to fit their template. You build Excel to fit what you’re doing. It’s just not powerful enough to do everything, right?
Gheorghiu conducted interviews with 225 companies who were all looking for enterprise resource planning (ERP). The goal of this survey was simple – listen and learn from what these companies had to say about their individual decision-making strategies. We all agree that this is not a simple task. But we also agree that selecting the best ERP software is a critical factor for business success.
Here is why the research phase of this process is considered to be so vital:
- It has the greatest impact on all the subsequent phases and consequently, your final decision.
- Research begins at home – in other words, the first step is to determine your company’s specific and unique needs.
- Once your company has thought through and determined its software requirement, then and only then does the process to evaluate vendors and their offerings begin. This can be a very challenging step because many companies are not equipped with the time, knowledge, or tools to perform this step.
Buyer Profiles: Who’s Looking for ERP and Why?
One problem for analysis is that many are not doing business in just one industry. The breakdown of companies in our business sample, by industry, was as follows: manufacturing (47%), distribution (18%), services (12%), construction (4%), retail (3%), utilities (3%), government (3%), healthcare (3%), and other (10%). However, to complicate matters a little, 20% of manufacturers also manage distribution and some distributors include light manufacturing in their operations, like assembly.
“Companies looking to invest in business software may very well be addressing this additional challenge – looking for a comprehensive package that integrates all aspects of a business. ERP software systems are powerful and comprehensive but are not necessarily known for their agility and ability to accommodate many disparate functions.”
Gheorghiu identifies as a strong influencer consumerization, which changes focus from organization-oriented offerings to end-user focused products. “This was a highly significant turning point in the IT marketplace. By developing new technologies and models that originate in the consumer space rather than in the enterprise sector, software producers opened up the market to a flood of small and medium-sized businesses looking for more cost effective, and less complicated solutions to run their businesses.”
The consumerization of software (as noted above) has precipitated the move by many companies away from enterprise IT towards more streamlined and user friendly consumer-oriented technology. This change is equally relevant for ERP software and manufacturing companies have participated in this very significant development, albeit more cautiously and slowly than SMBs.
Most industries follow a “purposeful implementation” strategy, managing software adoption as a series of “sprints in a well-planned program” rather than insisting on the “all or nothing” approach.
For example, a small company looking to invest in software might decide to begin with an accounting system which can be used alongside point solutions and spreadsheets. As companies grow and their transactions become more complex, they may find that they have also outgrown their initial software selections.
The chart below provides a visual analysis of the mix of software that is currently utilized by our business sample:
Some relevant comments we extracted from our survey included:
- The CEO of a small services company mentioned that he was “tired of the hodgepodge of systems”
- A manufacturer considered their current arrangement to be “very siloed.” Reconciling the inventory balance is a “constant battle.”
Buyer Behavior: How are Companies Approaching ERP Selection?
The selection process is most successful when companies adhere to some basic selection rules: involve as many direct stakeholders as possible and keep business priorities and strategies firmly in mind when making the final decision.
Feature Functions
A software change can trigger a vast administrative upheaval within the company. It is important to carefully analyze the business case for the change and whether it supports the level of disruption as well as the implementation time and spending that will be required. Even if the change may be entirely justified, a well thought out analysis is well worth the time and effort.
The Vendors in the Spotlight
According to our survey results, the chart below identifies the vendors under consideration by the companies surveyed. A majority of companies (53%) were not, for the moment, looking at specific vendors. However 47% of respondents had narrowed their search to specific vendors.
Who’s Involved in this Decision Selection Process?
Our sample results indicate that the people in charge of the selection process are distributed as follows: employees in the finance and accounting departments (23%), IT department employees (23%). The other important categories were independent consultants helping companies with the selection process (17%), operations managers (17%) and presidents or CEOs (12%). It is worthwhile mentioning that project managers and business analysts only made up 5% of the total.
By far, the most effective method of choosing a software is to employ a collaborative system whereby the actual stakeholders of that system (the end-users) have a direct voice in the decision outcome. As the front-line users of the system, their insight and knowledge is very valuable. Their input along with all the other stakeholders input will produce the best possible outcome of this process.
An ERP system is a major business investment and is best handled with the appropriate amount of time and diligence given to the process.
The advent of cloud computing has indeed radically changed the landscape for deployment of business software. According to a recent press release by Gartner, “by 2020, a Corporate “No-Cloud” policy will be as rare as a “No-Internet” policy is today”. In other words, cloud deployment will become the default by 2020.
Our survey results, in fact, support Gartner’s analysis. Ninety-five percent of companies responded that they were open to a cloud deployment model, while just over 50% were willing to also consider on premises ERP. Of this latter group of respondents, 65% of them were manufacturers and distributors. This makes sense of course, given that these industries made significant investments in hardware and IT personnel and may not be as ready or as willing to move to the cloud model.
As for the preference for cloud computing (as demonstrated by our responses), we argue that it reflects the very strong tendency in the market to opt for simpler, more streamlined and less expensive computing solutions. As more information and assurances of security and stability by cloud providers enter the marketplace, more and more businesses will be convinced that the many benefits of the cloud outweigh some of their remaining concerns. Gartner’s prediction that cloud will increasingly be the default option for software deployment looks to be right on course.
Conclusion
An important consideration for companies embarking on an ERP software selection process – the average lifespan of an ERP system is approximately 5 to 10 years. If we consider important factors like the investment of capital, time, and loss of productivity that the selection and replacement of an ERP system requires, perhaps all companies would be more willing to invest the necessary effort in this process.
by Gary Mintchell | Jul 17, 2018 | Automation, Process Control, Software
Did Honeywell Process Solutions (HPS) short-circuit the Open Process Automation work? Inquiring minds wonder. Once again, some news and analysis of a conference that I couldn’t attend—three of these the same week in June.
HPS and ExxonMobil sent this release. Subsequently, I talked with some sources at competitor companies who broached the question to me—did this news short-circuit the ExxonMobil-led effort for a new process control solution? An interesting caveat is that there is more than one group within ExxonMobil—and they don’t necessarily agree.
From the first release:
The Open Process Automation group was initiated by ExxonMobil who was trying to find a better (less expensive) upgrade path for its control systems that had fallen behind that of its competitors. The oil & gas supermajor still has in operation a significant number of older systems installed as far back as the 1980s—systems that have served the company well for more than 30 years, but as older electronic components have been replaced by more modern alternatives, spare-parts shortages and looming obsolescence put ExxonMobil and other owner operators in a difficult place.
When facing obsolescence, rip-and-replace is clearly the option of last resort—incurring high costs, protracted downtime and the loss of all the intellectual property invested in developing a system’s displays, databases, control strategies and third-party interfaces, according to David Patin, distinguished engineering associate – control systems, ExxonMobil Research & Engineering.
The company’s installed base of Honeywell TDC 3000 systems, in particular, looked to be facing a critical shortage of spare parts in the year 2025, Patin explained. “So in 2011 we met with Honeywell regarding the future of TDC 3000,” Patin began, addressing a plenary session of the Honeywell Users Group Americas 2018 conference this week in San Antonio.
Challenge issued
Unwilling to settle for rip-and-replace, “We challenged Honeywell to develop and prove a method to migrate TDC forward,” Patin said. The two companies established a joint task team to investigate the problem.
ExxonMobil’s wish list of deliverables included avoiding wholesale system replacement (especially the I/O); preserving the company’s intellectual property investment; allowing for on-process migration of system components (meaning without shutting down the process); enabling new capabilities not currently possible with TDC; and unifying TDC with Honeywell’s current state-of-the-art Experion platform.
This last item encapsulated a desire for a solution that would “be usable by a younger workforce, yet stand the test of time,” Patin said. “I picture a third-grader who’s also a future TDC engineer,” he said. “They just don’t know it yet.”
Also implicit in ExxonMobil’s requirements were continued “rock solid” reliability and security, Patin added.
Solution identified
Since the technical obstacles to bringing TDC forward hinged on hardware obsolescence, notably controller microprocessors and communications chips that would no longer be available, the team settled on an emulation approach that would effectively abstract TDC system functionality from the specifics of the older hardware.
And in February 2018, seven years after that first meeting of the minds—and two years ahead of schedule—Honeywell answered ExxonMobil’s challenge with the release of Experion LCN R501.1. The Experion LCN, or ELCN, effectively emulates the TDC system as software. “It’s 100% binary compatible and interoperable with the old system,” Patin explained. “Current TDC code runs unmodified in this virtual environment, greatly reducing the technical risks. Intellectual property such as application code, databases and displays are preserved.”
In the end, the Experion Station, Server, ACE and APP nodes can take the shape of Windows-based “physical” applications or virtual machines. Application Modules, Network Gateway and Network Interface Module functionality is redeployed on Universal Embedded Appliances or as virtual appliances. Only the Enhanced PLC Gateway cannot be readily virtualized because the emulation of serial network connectivity is not well behaved, Patin explained. “This means you can build an almost 100% virtualized or 100% physical system—or somewhere in between.”
With the new solution, LCN and UCN messages are now encapsulated in standard Internet Protocol. “All the old networks now exist as logical constructs on Fault Tolerant Ethernet,” Patin said. “We’re no longer locked into proprietary networks.”
And to address the challenge of on-process migration, Honeywell has also introduced several bridge devices that effectively facilitate the virtualization of TDC system node functionality—without the need to interrupt the process under control.
Benefits achieved
Virtualization of the TDC environment has come with some added benefits, including the ability to use Honeywell’s cloud-based Open Virtual Engineering Platform to engineer TDC solutions; lower cost, smaller footprint training simulators; peer-to-peer integration of virtualized HPM controller nodes with current-generation C300/ACE nodes; support for OneWireless (ISA 100 and WirelessHART) connectivity; and integration with ControlEdge and Unit
Operations Controllers.
“It’ll be a game-changer,” said Patin. “We don’t know all that’s possible as yet.”
Other benefits include a drastic reduction—or elimination—of spare parts, as well as reductions in cabinet space requirements. “We’ve gone from two nodes to six in a single cabinet,” Patin said. “We’ve not fully realized unification with Experion, but that process has begun.”
Overall, Patin gave high marks to the Honeywell team for its response to ExxonMobil’s needs. “The challenge was met, and expectations exceeded,” he said. “The need to replace an entire system is eliminated, future component issues are virtually eliminated (pun intended), intellectual property is preserved and on
process migration is supported.
“ELCN technology essentially resets the odometer on your TDC 3000 investment,” Patin added. “It’s the best example of Honeywell’s commitment to continuous evolution that I’ve ever seen. And if it were a final exam, I’d give Honeywell an A on this one.”
<End of release>
Safety Manager
HPS also announced Safety Manager SC, the next generation of its flagship Safety Manager platform. Its modular, scalable design enables it to function as a single platform for all enterprise safety applications, allowing customers – who are often using four or five different safety systems – to consolidate and reduce their training and engineering costs, and spare parts inventories.
Safety Manager SC incorporates a new Series C-based controller and Honeywell technologies such as LEAP, Universal Safety IO, offline simulation and Experion integration, which collectively simplify safety system engineering, development and testing.
“Our customers increasingly want integrated safety and control solutions and the simplicity of partnering with one supplier for all their needs,” said Tim LeFevre, global customer marketing manager for safety systems, HPS. “We deliver exactly that by combining unrivaled expertise in distributed control systems (DCS) and safety systems with deep integration know-how. Honeywell is one of the few vendors that can support the full safety lifecycle.”
HUG
The ability of Honeywell Connected Plant’s offerings to deliver higher levels of safety, reliability, efficiency and profitability will continue to be the primary discussion point at the 43rdHoneywell Users Group (HUG) Americas symposium. More than 1,300 delegates from across the oil and gas, chemical, pulp and paper, and metals and mining sectors are attending the event, which features numerous displays of the newest technologies along with dozens of Honeywell- and customer-led sessions and technical discussions.
Throughout the conference, Honeywell will showcase how turning data into actionable insight requires more than just upgrading technology; it requires a system for capturing, retaining and sharing knowledge that allows both the plant and its workers to perform at their best every day.
“Digital transformation has to be about more than just moving data into the cloud,” said John Rudolph, president of Honeywell Process Solutions (HPS). “It ultimately has to be about the outcomes, including driving increased productivity and savings for our customers while allowing them to increase knowledge capture, knowledge sharing and knowledge retention among their employees.”
Rudolph was named president of HPS on May 31, 2018, succeeding Vimal Kapur, who was named president and CEO of Honeywell Building Technologies. Rudolph led the Projects and Automation Solutions, and Lifecycle Solutions and Services businesses for HPS over the past six years, driving significant growth. Rudolph also has held leadership roles with TAS Energy, General Electric and Ingersoll Rand.
Here is a revealing comment from the press release about HPS’s strategy and direction—something we’ve all been wondering about. “HUG attendees will be able to see and experience the Company’s ongoing transformation into a software-industrial provider.”
Announcements in brief:
- Thermal IQ – Enables maintenance engineers and plant managers to more effectively monitor and manage their thermal process equipment, minimizing unplanned downtime and maximizing uptime.
- Uniformance Cloud Historian – This software-as-a-service cloud hosting solution for enterprise-wide data capture, visualization and analysis helps customers improve asset availability, optimize processes and increase plant uptime.
- Asset Performance Management – Integrates asset and process data for actionable insights to improve asset performance and plant profitability.
- Immersive Competency – This cloud-based simulation offering uses a combination of augmented reality (AR) and virtual reality (VR) to train plant personnel on critical industrial work activities, empowering them to directly improve plant performance, uptime, reliability and safety.
- Personal Gas Safety – This solution integrates with Honeywell’s leading plant control system to protect workers and speed emergency response in case of hazardous leaks or worker injury.
- Intelligent Wearables – This hands-free, wearable technology allows industrial workers to more safely, reliably and efficiently accomplish their tasks in the plant or the field. It uses a head-mounted visual display that responds to voice and brings live data, documents, work procedures, as well as health and safety information into view and can connect field workers with remote experts in real time.
- Experion Batch – Combines Experion distributed control, batch automation, and new visualization technology for improved efficiency, quality and throughput.
- Measurement IQ for Gas – Provides measurement under control by transforming metering operations with 24/7 real-time condition-based monitoring.
by Gary Mintchell | Jun 6, 2018 | Asset Performance Management, Data Management, Internet of Things
Have you been wondering about GE Digital and such products as Predix Asset Performance Management since the announcements of the new GE CEO reducing the group and throwing it into turmoil?
Well, just when I realized I had not heard anything for a while, this press release appeared. I don’t usually write about the announcements that come daily about sales “wins” or about success stories. But I felt this was significant in that it was news that GE Digital is still out there and that here is a user that is not a GE company. Also it reflects a trend of collaboration among companies. Plus another trend—one of the original hopes for the Industrial Internet of Things, that is, adding ability for OEMs to monitor their equipment at the customer’s site and provide service and support.
Here, GE Digital and SIG, a leading provider of packaging systems and solutions for the food and beverage industry, announced a strategic partnership to power digital innovation in food and beverage packaging.
SIG will deploy GE Digital’s PredixAsset Performance Management (APM) and Predix ServiceMax industrial applications across more than 400 customer factories worldwide to drive new levels of efficiency, create intelligent solutions and enable new possibilities for its customers.
The food and beverage industry is ripe for digital transformation, with consumers increasingly seeking innovative, convenient products that are not only safe and sustainable but also affordable and differentiated. At the same time, producers are facing competitive pressures, supply chain complexities and ever-shorter production cycles – creating an increased need for technologies that can enable producers to quickly identify, predict and act on changing consumer and market demands.
The unique combination of GE Digital’s APM and ServiceMax applications will enable SIG to build an end-to-end digital platform that will bring a new level of insight and data-driven intelligence to its customers worldwide – helping them and SIG transform how they predict, manage and service the entire lifecycle of SIG filling lines. By automatically collecting and analyzing asset data – tapping into billions of data points across its operations globally in real time – SIG and their customers can move beyond traditional asset monitoring and predictive service models to reimagine their supply chain, enhance quality control technologies and evolve their portfolio mix.
“Our ability to harness data is central to delivering on our promise of opening up new opportunities for our customers,” said Rolf Stangl, SIG, CEO. “By tapping into information in new and innovative ways, we will be able to deliver an unmatched level of performance, security, transparency and creativity across the entire food and beverage supply chain – through to the end consumer.”
SIG’s customers fill more than 10,000 unique products into SIG packaging across 65 countries worldwide. In 2017 alone, SIG produced 33.6 billion carton packs for its customers. Through this large-scale partnership, SIG and GE Digital will co-innovate packaging solutions and technologies to address the industry’s two biggest needs today: improving asset performance and optimizing service delivery.
The new digital service model will also enable SIG to deliver new solutions and business models based on advanced performance metrics, including as-a-service delivery, performance-based and subscription solutions.
The initial deployment is expected to go live in July 2018 with the global rollout anticipated to begin in January 2019.
by Gary Mintchell | Mar 1, 2018 | Automation, Operations Management
Honeywell released three announcements while I am still recapping the ARC Forum. There are one or two more to go. Thèse regarded maintenance management, simulation, and safety under the umbrella of Connected Plant.
The first is a new offering as part of Honeywell Connected Plant that allows customers to more effectively manage the maintenance and operations of their industrial equipment. The new Honeywell Connected Plant Asset Performance Insight connects the customers’ assets and equipment to the cloud, and applies analytical models from Honeywell and its partners, so that customers can avoid unplanned downtime and unnecessary maintenance.
“In today’s competitive business climate, in which asset capacity is often sold out, equipment performance is key to increased profitability,” said Richard Shaw, general manager, Honeywell Connected Plant. “With operational and maintenance-induced equipment failures accounting for most of the unplanned downtime, industrial companies are looking to digital transformation and IIoT to make sense out of huge amounts of data. Honeywell Connected Plant and our new Asset Performance Insight will help our customers operate more strategically and effectively.”
Honeywell designed the Asset Performance Insight solution to be rapidly deployed to customers through pre-configured templates. These templates are based on the company’s deep industry experience and real-world customer challenges enhanced with advanced analytics. The offering can also be configured and tailored to customers’ specific needs, making it extremely flexible.
The second is a cloud-based simulation tool that uses a combination of augmented reality (AR) and virtual reality (VR) to train plant personnel on critical industrial work activities. With as much as 50 percent of industrial plant personnel due to retire within the next five years, the Honeywell Connected Plant Skills Insight Immersive Competency is designed to bring new industrial workers up to speed quickly by enhancing training and delivering it in new and contemporary ways.
Honeywell’s advanced training solution combines mixed reality with data analytics and Honeywell’s 25 years of experience in worker competency management to create an interactive environment for on-the-job training. It uses Microsoft’s HoloLens, the world’s first and only self-contained holographic computer, and Windows Mixed Reality headsets to simulate various scenarios for Honeywell’s C300 controller – such as primary failure and switchovers, cable and power supply failure – that train and test personnel on their skills.
“Megatrends such as the aging workforce are putting increased pressure on industrial companies and their training programs,” said Youssef Mestari, program director, Honeywell Connected Plant. “There is a need for more creative and effective training delivered through contemporary methods such as Immersive Competency, ultimately empowering industrial workers to directly improve plant performance, uptime, reliability and safety.”
Simulating specific job activities through virtual environments, which are accessed through the cloud, Honeywell’s solution offers a natural way to interact and communicate with peers or a trainer. Similar to a flight simulator, trainees can safely experience the impacts of their decisions. This approach improves skill retention versus traditional training methods by up to 100 percent and reduces the length of technical training by up to 66 percent. Additionally, the employees’ training progress is tracked as part of a formal competency management system.
And wrapping up is a new solution for real-time safety monitoring of workers in plant and remote operations. Honeywell Connected Plant Skills Insight Personal Gas Safety helps to protect lives and enable faster response in case of hazardous leaks or worker injury.
The solution’s wearable gas detectors monitor gas, radiation and dust, and are tightly integrated with Honeywell’s distributed control system, Experion® Process Knowledge System (PKS). In case of harmful exposures, man-down or panic alarms of workers in the field, accurate, automated alarms now alert control room operators in real time. In addition, safety teams can take advantage of powerful tools embedded in Experion PKS to provide detailed trending, reporting and data analysis of the gas detectors to further ensure safe operations.
“Monitoring worker safety and ensuring proper response to emergencies are top priorities for industrial producers,” said Adrian Fielding, marketing director, Integrated Protective Solutions for Honeywell Process Solutions (HPS). “Personal Gas Safety gives plant operators eyes and ears in the field to improve their situational awareness, helping avoid potentially life-threatening conditions while also providing workers with the assurance that help will be on the way quickly if they need it.”
by Gary Mintchell | Feb 26, 2018 | Asset Performance Management, Operations Management, Software
So last week I shared an update on Schneider Electric from the ARC Forum–mostly on cybersecurity. A helpful marketing person guided me to the press release with all the data that updated the software side of the week’s news–specifically asset performance management. For the most part the discussion did not center on product updates but on “increasing momentum surrounding customer adoption”. In other words, Schneider wanted to highlight an area of software not often brought to center stage and show that it is a growth area.
Kim Custeau (I misspelled her name in my last post, I believe–thank you autocorrect), Asset Performance Management Business Lead, shared how investments in the cloud, advanced machine learning, and augmented reality, coupled with new partnerships, have empowered customers.
“Defining and executing an asset performance strategy is a critical component to improving productivity while safeguarding business continuity,” she said. “We have been delivering proven, industry leading asset performance solutions for nearly 30 years, and continue to invest in a long-term strategy to drive innovation in this area. Our focus is to provide real value to our customers by empowering them to maximize return on capital investment and improve profitability. We are proud to see our customer results speak for themselves with significant savings.”
Machine learning and prescriptive analytics:
- Duke Energy prevented an estimated $35 million cost from early warning detection of a steam turbine problem
- Ascend Performance Materials now responds faster to alerts saving an estimated $2 million through avoided plant shutdowns
Augmented Reality:
- BASF is implementing AR to improve asset performance, reliability, and utilization while increasing production efficiency and safety because technicians leverage an augmented digital representation of the asset.
Cloud and Hybrid Deployment:
- WaterForce partnered with Schneider Electric to develop and IIoT remote monitoring and control system in the cloud that allows farmers to operate irrigation pivots with greater agility, efficiency, and sustainability.
New Partnerships:
- MaxGrip and Schneider Electric announced a partnership to expand APM consulting and add Risk-based Maintenance capabilities. The APM Assessment is a first step for industrial companies to evaluate asset reliability and digital transformation strategy.
- Schneider Electric and Accenture completed development of a Digital Services Factory to rapidly build and scale new predictive maintenance, asset monitoring, and energy optimization offerings. As a result, a large food and beverage company saved over $1 million in maintenance costs
