Information Technology/Operations Technology (IT/OT) for the Oil and Gas Industry

Blog from Stan DeVries

Since 2006, some oil & gas companies have attempted to align what has been called IT and OT with different organization approaches.  It is valuable to consider what these two “worlds” are:

The world of IT is focused on corporate functions, such as ERP, e-mail, office tools etc.  The following key characteristics apply:

•          The dominant verb is “manage”.
•          Systems design assumes that humans are the “end points” – information flows begin and end with humans.
•          The focus is on financial aspects – revenue, margins, earning per share, taxes etc.
•          The focus is also on cross-functional orchestration of the corporate supply chain
•          The main technique is reporting – across all sites in the corporation.
•          One of the methods is to enforce a standard interface between enterprise applications (especially ERP) and the plants/oil fields/refineries/terminals.
•          Policies for managing information are mostly homogenous, and the primary risk is loss of data.

In contrast, the world of OT is focused on plant operations functions.  The following key characteristics apply:

•          The dominant verb is “control”.
•          Systems design assumes that “things” (equipment, materials, product specifications etc.) are the “end points” – information flows can begin and end without humans.
•          The focus is on operational aspects – quality, throughput, efficiency etc.
•          The focus is also on providing detailed instructions for operations areas – to equipment and to humans
•          The main technique is controlling – within a related group of sites or a single site.
•          One of the methods is to accommodate multiple protocols and equipment interfaces.
•          Policies are usually diverse and asset-specific; risk includes loss of data, loss of life, loss of environment, loss of product and loss of equipment.

These two worlds must be integrated but their requirements and strategies must be kept separate.  The following diagram suggests a strategy to achieve this:

The above diagram recommends the following methods to bridge these two worlds:

•          Use a “value generation” metric to justify and harmonize the equal importance of these two worlds.  “Value” can be measured both in terms of financial value (more on this below) and in terms of risk.
•          Reconcile units of measure using thorough activity-based costing, down to senior operators and the technicians which support them.
•          Correctly aggregate and disaggregate information at the appropriate frequency.  Operators require hourly information (in some industries, every 15 minutes).
•          Centralize and distribute information with an approach called “holistic consistency” – allow for the diversity of information structures and names for each area of operation, but enforce consistent structure and naming between sites (or in some cases, between operations areas).
•          Integrate and interoperate with appropriate methods and standards, which must address visualization, mobility, access and other aspects as well as information.
•          Apply a consistent cybersecurity approach across multiple areas of the IT/OT system, allowing for information to flow “down” and “across”.  An “air gap” approach has been proven to be unsustainable, but a multi-level approach called “defense in depth” has been proven to be effective and practical.

Oil and gas companies have implemented a variety of organization structures for bridging these two worlds.  Some companies divide IT into two areas, called Infrastructure and Transformation.  New technologies which are strongly linked to new ways of working are first managed by the Transformation section of IT, and then as these mature, they are transferred to Infrastructure.  The main functions of OT are closely linked to Transformation, because operations can continue without OT – OT is almost always a value-add.  We observe the following organizational approaches:

•         IT reporting to Finance, and OT reporting to Engineering/Technical Services or to Operations
•         OT reporting to Transformational IT, with an operations-background IT executive

Regardless of the organization approach, the objectives are reliable and business-effective improvement, whether in the office or in the sites.

OT/IT Convergence “What does it mean in the Industrial World?”

The convergence of Operational Technology and Information Technology is nothing new, it has been front and center certainly since early 2000. Where the Y2K challenge brought awareness in many organizations, how much server, IT like capabilities reside in the industrial automation/ operational landscape. But in the last 3 months I must have been pulled into 10+ workshops, sessions with companies where OT/IT convergence has been the leading point of the discussion. Determining how they are developing strategies to adopt, leverage the opportunity.

The diagram below shows a high level approach to how to “bridge” the different objectives of the two cultures of IT/OT. The success is not one taking over the other but the merger to achieve the combined value and objective. 

It is important to note that it is not a trend it is an opportunity due to evolution of technologies from IT/and OT that synergies and alignments are possible to provide opportunities too:

• ·         Increase operational and business alignment in real time
• ·         To alignment business across multiple plants and value chain
• ·         To accommodate the empowerment of knowledge workers through a combination of connected and mobile devices.
• ·         To leverage IT and Operational efficiency through common services, capability
• ·         To address growing demand of Operational Management, that has out grown the tradition OT capabilities and methods. Only a step change by leveraging capabilities in IT, with existing OT/automation capabilities will the requirements be satisfied.

The companies I have seen successful have also understood that a new culture is required and have formed a “Product IT” team composed of IT and Automation/operational people. This brings the critical understanding and cross learning so the above “bridging” strategies are a combined experience strategy.

Companies that determine where they want to be understand the critical nature of multiple platforms at different levels of the architecture, but “loosely coupled, but tight alignment” between them is key. Platforms are key to a sustainable architecture that allows agility over different plants and different work forces and processes.  

I will continue this discussion in the coming weeks as this topic is becoming fundamental to success of traversing the “operational transformation”.