Improving – and even transforming – business critical functions like Environmental, Health, and Safety (EHS), by using technology to unlock elusive information and insight, is critical to reaching operational excellence. The journey toward making this happen is one marked with decisions that directly impact both the business and economic outcome. But when EMIS project managers work with decision-makers across the organization to identify the company’s needs and make strategic decisions along the way, they can expect significant success. This should be done for each of the three distinct stages of the journey: planning, execution, and sustainment.
Planning: Begin with the end in mind Stephen Covey stated in “The Seven Habits of Highly Effective People” that all things are created twice: first mentally, then physically. This principle underscores the importance of first developing a strategy and then executing specific tactics that support it. This seems obvious when a company is not in the middle of the stress and urgency of an event such as a major compliance failure or tragic incident. Understandably, organizational attention and support for new ways of doing things are often found directly following these types of events, and changes are often implemented with urgency and fast action. However, acting without an established vision and clear strategy leads to investments that result in poor value, a decline in confidence for the project, and, in all likelihood, loss of the support to continue.
Clear direction As an international mid-stream oil and gas company executive said when beginning a comprehensive EHS transformation program, “The sensitivity to initial conditions will determine if we end up in England or Spain by the time we cross the ocean.” For him, the destination must be socialized, understood, and embraced by organizational stakeholders when embarking on the journey. Otherwise the considerable commitment of resources, investment in technology, and alignment of the business would not result in a sustained improvement and transformation for the coming decade and beyond.
Execution: Build or buy The next step, after the critical questions in step one are asked and answered, and the destination is clearly established, is to ask, “Do we build or buy our ship?” Answering this question is critical to success; failing to address the true cost implications have far reaching impacts to “making it to port or running out of fuel – organizational support and funding – in the middle of the ocean,” said the company executive.
Resisting temptation The temptation to internally build new or to customize existing solutions is always high; stakeholders quickly rationalize by believing the business requirements are unlike any others in the industry. And when a company considers its skilled IT professionals, trusted subject-matter experts, and capable support staff who can be made available to begin work immediately, it would seem to make sense to build a quick solution. However, when the question is carefully studied, it becomes clear that the company’s core requirements are not only similar within a single industry but often across industries, and that a proven market solution is available.
Opportunity costs Additionally, there are certain opportunity costs to consider. For example, what is the cost of the professionals to not only design, build, and deploy a custom tool but then to sustain it as needs change over the next decade or more? Every hour needed to develop detailed business requirements, use cases, verification scenarios, and training materials is an hour taken away from the EHS domain expert’s core responsibilities. The expert’s “day job,” such as compliance programs, risk assessments, or safety audits, is not being done because they are doing software development. How much more capital must be set aside in risk reserves, because experts are not available to identify and mitigate risks, and what is the opportunity cost of freezing that capital from investing in the business each year? What is the cost of absorbing all of the ongoing maintenance and improvement rather than tapping into a community of companies supporting a vendor’s continuous improvement of technology?
Additionally, what begins as a short-term tactic to get started immediately can evolve into a long-term commitment of time and attention of highly specialized domain experts. This increases labor costs and risk reserves, affecting the company’s ability to identify and mitigate risks and to react quickly to changing market conditions.
Sustainment: Staying evergreen After the initial deployment of an EHS business process is complete, the solution must be embraced by the organization if it is to succeed in providing value. It is not enough to have a solution that calculates emissions and generates auditable reports if users continue to do their work in “shadow systems” like spreadsheets and then enter the results in the corporate solution. Not only is the information disconnected from the source and opaque to inspection, but it also creates work, rather than reducing it, when maintaining multiple systems. Such situations cannot be sustained, because the stakeholders are not recognizing the benefits of the investment.
High-value activities So, when transforming the business process, look to technology that can automate the routine activities to reduce work for the users. A primary example is the retrieval and inspection of raw data. Some companies have teams of engineers fully dedicated to the collection of operational data that are then manually inspected and adjusted in spreadsheets before calculations can be performed to produce regulatory reports. However, when automation is introduced to retrieve, validate, and substitute erroneous data, the users embrace the investment because it increases the quality of the output while decreasing effort. This permits more time for the engineer to focus on high-value activities, such as trend analysis, that improve the operation.
Continual demands Additionally, ongoing changes to the business occur because of external demands of regulators, partners, consumers, or investors or from internal decisions to reorganize or streamline. When these changes occur, the technology must be readily configurable to support the business, because recoding customizations is complicated and time consuming. The most nimble organizations, operating in volatile industries that experience rapid changes, are outsourcing more of the day-to-day care and feeding of the solution. Companies are becoming more comfortable with using external data centers to host EHS solutions, because the database administration, upgrades, and performance tuning can be managed more effectively and at a lower cost by the vendor. Similarly, the daily administration of the solution can be successfully outsourced to the vendor as a managed service to take advantage of a wider view of industry best practices, leading to improved business outcomes. Industry is choosing more frequently than in the past to focus the company’s internal experts on making business-critical decisions while outsourcing the infrastructure and administration of the EHS systems.
Properly planning, executing, and sustaining an enabled EHS solution transforms the operation and reduces costs. Promptly identifying key decision points such as those described here (and many more) leads to successful outcomes around business priorities and constraints. Skipping or shortcutting these stops leads directly to failures in delivering the expected business returns and adds unforeseen time and expense. To ensure success and build trust in project execution, be sure to stay on course and hit each decision point with confidence.