In this second podcast transcript of the Energy Transformation series, John Lusty, Global Industry Marketing Leader at Siemen Digital Industries Software, speaks with John Nixon, Senior Director of Energy and Utilities at Siemens. This series discusses the requirements management of Digital Lifecycle Excellence to manage enterprise technical data.
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John Lusty: Hello, everyone. My name is John Lusty and I’m the Global Lead for Industry Marketing, covering the Energy and Utilities industry here at Siemens Digital Industries, or DISW as we like to call ourselves at Siemens. Joining me today is John Nixon, our Senior Director who owns the Energy and Utilities Industry Strategy at DISW. How are you doing today, John?
John Nixon: Hey, thanks for asking, Mr. Lusty. It’s been a very busy week.
John Lusty: Yes, it’s certainly fine by, that’s for sure. So, for those who were unable to join us for the first podcast, we talked about how Energy and Utility businesses can adopt a Digital Lifecycle Excellence aapproach to capture and consolidate valuable information that supports the complete lifecycle of their product, their project, or their plant, whatever their business model may be so that data is available for reuse. So, once that information is centralized, keeping it up-to-date becomes more achievable. And then we can make it available to those who can use it as the knowledge foundation upon which problems can be solved. And opportunities can be addressed using this digital twin of their assets. This is the second installment in our four-part podcast series. Today, we’re going to discuss the value of applying a requirements management approach to managing enterprise technical data in the Energy and Utilities industry. So, John, for the purposes of a level set to get us kicked off, you worked in operations in the field for a long time, what was it like out there dealing with all that complexity of information that was coming at you on a major oil sands project trying to maintain quality as job one, as the saying goes?
John Nixon: Thanks for asking. Working in the field, especially there in Northern Alberta on some of the oil sands projects, the amount of data that was coming at us every day, as we were moving through, back in the early 2010s, was incredible. I’ll give you an example. When I would go out, and we would do hydro tests on spools of pipe or weld inspections, bolt up inspections; welding, for example – I, one time, sat down and looked at how much data was created when you pulled the torch out and you started to do a weld. And there were at least 36 documents, of which in those 36 documents, there may be anywhere from 10 to 15 individual data points that were affected by the activity of doing a route pass and so forth – all of the work around a weld. And so when you think about just the sheer volume of data that you’re creating every time you enter the field each day, it can be quite daunting.
John Lusty: Yeah, I can imagine. In the Energy industry, John, this industry is being impacted by global trends such as crazy market volatility, especially in the last few years. We’ve got energy transition or the ESG issue (Environmental, Social, and Governance), and of course, the digitalization from everything. So, if you were back on that major project, John, that you’re talking about, how would you see these trends being manifesting themselves on-site? How would you be feeling these in the field do you think?
John Nixon: I mean, look at what I was just talking about as an example of industry standards and customer requirements that demand a large amount of data gathering. Now you add to that all the environmental implications; now we have to look at carbon footprint; now we have to look at waste generated. There are a lot of externalities that, in the past, may not have required such a level of scrutiny that is required today. As you and I have seen investment houses like BlackRock, JP Morgan, and others, have basically said, “Look, if you want investment in your capital projects, you have to have a demonstrable ESG plan and one that we see in execution going forward.” So, these requirements are not ‘nice-to-haves’, they’re have-to-haves in order to continue to move forward to get the capital investment necessary; to keep our species with the lights on and the gas flowing.
John Lusty: It’s got to be crazy-complicated on these projects that can span so many years when you think about the change that’s been rolling out against the industry and different jurisdictions. Even within the course of a year or two, let alone in five years when you’re looking at construction, that’s got to be a heck of a challenge. So, one of these projects gets so complicated. So, with all that information coming in from so many different directions, how did that show up in terms of friction in the process, John? What were the implications that you could see from this “unmanaged change” coming at you through an incredible volume of information? Where’d that hit you?
John Nixon: When you’re on a large project – and aren’t they all large? But when you’re on a very large project and you’re working with three, four, six, seven different contractors at any one time in the work area – EPCs that all have their own varying scope and so forth – there is a lot of friction out there. There is a challenge to make sure that everybody is following the most current version of specifications, for example. I remember on one project, we were about two years into a five-year project, and we had to hire an engineer to come out to actually forensically go back and make sure that the specifications to which designs were done matced what was actually being done in the field. And where the specifications issued to one EPC contractor, the same version of specifications issued to another? So, when you look at multi-year projects, with multiple contractors – equipment suppliers, systems integrators, EPC firms, the list goes on – the challenge of keeping not only your own selfcells up-to-date on the current specification version but making sure that everybody’s working – if I may use the metaphor – “the same sheet of music”? Is everybody singing the same tune? That is a massive challenge in this type of environment. So, if you don’t go into this with a requirements focus from concept all the way through construction, installation, commissioning, and then on into operations – what you are leaving the operations group with is a lot of forensic effort to re-establish the baseline functional infrastructure that they’ve been handed just to get started. And that kind of piecemeal, very disaggregated handover is a relic of the past. And so we have to adopt a very different requirements approach to how we do business in the field.
John Lusty: As I understand it, John, some industries evolved very differently. And perhaps after learning some really hard lessons, learn that focusing on the delivery of each individual requirement, because even a project as big as some of the ones you were on were made up of probably millions of individual requirements. But focusing on that requirement, and then working backward to ensure that the design process and the manufacturing and fabrication processes evolve to deliver on that requirement to produce better results. John, can you talk about how other industries that you’ve interacted with might have adopted a requirements approach that we’ve seen in Energy?
John Nixon: When I was working outside of Siemens, one of the things that attracted me to Siemens was their ability to bring the valuable digital lessons of aerospace, automotive, industrial machinery, heavy equipment, and make those available by cross-pollinating into marine, offshore, oil and gas, and so forth. And so it’s been a great opportunity to bring the lessons of those discrete manufacturing environments over into the energy space. We’ve all seen these different reports by McKinsey, Price Waterhouse, and others, where they always talk about the lagging nature of the energy business, of the construction industry behind manufacturing. And that may, in fact, have been true for several decades, but I can tell you now, the energy industry has caught up or is catching up because we’re seeing deep investments in a number of areas that have been around for the last decade, two or more, in manufacturing. So, it’s exciting to see the transformation, especially in an area like requirements management, where we’re seeing requirements management-driven design, and we’re seeing those requirements thaten transcend and move into the construction, the receipt, installation, inspection, and commissioning that goes on in the field, and that almost systemic or a systematic approach to how that is being driven in the field. So, it’s a revolution that we’re in the midst of. Do you know how we always talk about an inflection point? We always talk about that in the graphs. And I think we’re seeing an inflection point in the last five years for energy when it comes to this requirements-driven approach from design all the way through operations.
John Lusty: So, in the world of energy, we could say the same thing with the process industry and the mining industry; everything revolves around the contract. Might start off with a Design-Build Memorandum, or DBM, which then could lead to a bidding tender process for front-end engineering design or feed with a contract eventually being assigned, and then even a larger one. If the project is approved for detailed engineering, there may even be a larger one for construction and commissioning. All the steps required to get a new plant built and ready for startup. Either way, it sounds like a boatload of essential must-haves, John, contained within an awful lot of paper, right? This is an area where project teams, I think, could use some help to extract the important parts.
John Nixon: Well, that’s where we’ve made investments and really driving these requirements as almost objects, if you will. So, you’ve got a lot of text. I mean, in the past, you had boxes and boxes of documentation that were flowing out to the contractors. And how you actually tease out every requirement – the ‘I shall’s, the ‘you will’s – in those contract documents and in those requirements associated with those contract documents, the specifications. You have to be able to go in there and it’s more than just having OCR (Optical Character Recognition), you have to be able to go in and intelligently extract out those requirements, and then make sure that your digital ecosystem guides engineers during the design process. So, I may be selecting a gasket, for example, but it may have to be because of the material type and the fluid within the spool itself, there’s specific gasket material that is only allowed to be selected. Well, how do you prevent an engineer from making that mistake and selecting the wrong gasket from a library of selections? You have to make sure that your requirements are integrated into your design process, your design tools. And I’ve seen those investments here at Siemens to be able to guide during design – and subsequently, construction and commissioning – the ability to keep people within their lane as specifications require. And thus, greatly reduce the potential for errors and omissions as we go forward. So, you’re right, there is a huge volume. And requirements are like entropy; they always seem to be growing, they always seem to be increasing. So, the challenge then is how do I create an object e.g. that requirement, and then associate it in the design and construction process. And we’ve seen that technology really rise with investments here lately at Siemens.
John Lusty: I think the nice thing that we’ve seen in the last few years is a more of a willingness within the energy industry to be able to look more to the left and to the right outside their industry. Remember, John, we used to say that everybody in oil and gas is in a race to be second. It was always tough to find those companies that wanted to be first. It’s understandably a very conservative industry by nature, given the complexity of what’s happening in our plants. But now the ability, that same capability that has to be provided to automotive, aerospace, etc, to be able to extract those requirements and turn them into digital objects. So, now you’re bringing the power of software to tracking, and statusing, and reporting, and closing the loop on that requirement – makes a big, big difference. So, as we move forward here, John, let’s talk about an example of how a major player in the oil and gas industry recognized that there was a better way. Let’s talk a little bit about what they’ve done to apply it.
John Nixon: You’ve probably seen the press release for Shell, where they adopted our requirements management solution. I would say, Shell is definitely one of those very innovative companies that we’ve had the privilege of working with. And they’re actually taking this requirements management approach and our solution, and they’re applying it to their global capital projects system. I’ve had the privilege in my career of working with several of the supermajors, and beenbeen well trained in their capital projects programs. But one of the things, of course, over the last three decades that was needed was this digital frontier of requirements management that would support the vision of a capital projects program at these companies. And so now Shell, has taken that and they’re applying that, and it’s very exciting to see a requirements-driven environment where the digital actually meets the expectations of what management needs from these systems – to make sure that as work is performed, their competence is there, that it all tracks back to ultimately the contract and specification documents, and the objects within those documents, that we call requirements, are met and fulfilled.
John Lusty: And they started off cautious too. I think they were using our Polarion solution for requirements management in this specific case, and they started off on a very small number of controlled projects. And the last I’d heard, they’d rolled that out to their entire global projects team. So, as you mentioned, the two companies, Shell and Siemens did a joint press release on it, there’s a blog on it that people can access on our website, and there’s a lot of really good information there. So, as we wrap this up, we hope you found this interesting and useful on the subject of requirements management as one way of taking advantage of the Digital Lifecycle Excellence approach to data management. For more information, check out the Digital Lifecycle Excellence webpage at www.siemens.com/dle. There you can learn more about requirements management by watching an on-demand webinar, you can download an ebook or an infographic. In our next podcast – the third one in this series – we’ll talk about low-code application development and how it’s being used today in the industry. So, finally, feel free to connect with ourselves, John Nixon and John Lusty, on LinkedIn. We love hearing about what’s working and what’s not working in the industry and it would be great to connect. If you liked what you heard today, please give us a review and tell someone else you know who could benefit from the content. So, thanks, John, for helping us today. And take care, everybody. Have a great day.
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