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The digital value engineer

Thursday, March 7, 2013

Upstream clearly needs competent professionals who can take an operation to higher levels of performance using petroleum engineering, IT and business savvy, writes Dutch Holland

Whether those pros are called Digital Engineers, Digital Petroleum Engineers or Business Value Engineers, the basic idea is the same: to achieve continuous improvement in processes for business value.

Preparation would not be the same, however, since adding business principles to either the professional engineer or IT pro would be considerably easier than requiring the engineers to become IT pros or vice versa.

Today’s upstream energy industry is struggling to define and refine jobs called digital engineers or digital petroleum engineers.

Yet this issue has rarely been discussed in literature or at conferences.

Most significantly, while the topics have been wide-ranging, subtopics surfacing the least are “Business” and “Business Value.”

Let’s proactively introduce the subject of business value into the mix of opinions and preferences; the result should be interesting.

Digital engineer’s work Science mixed with business is not science - while engineering without being mixed with business is not engineering.

This is the difference between oil patch scientists and engineers.

Based on the definitions of engineer, not connecting their work to business value would be an oversight.

When the subject of the digital engineer topic is mentioned or discussed, the context is usually the difficulty companies are having in getting technology in place that will be used to generate business value.

Typically this topic is talked about in the context of “the people problems” that go along with technology integration into an upstream organization.

For those who have worked the technology integration problem for many years, it tends to crystallize not in terms of people problems but in business terms.

Improving processes to increase efficiency

Consider an organization with the idea of improving a work process in operations to increase productivity, efficiency or business value.

It’s a 3-piece puzzle (see diagram below)

The first piece involves thinking about the desired business value as the result of a disciplined program focusing on improving business(or technical) processes through enablement by information technology (IT).

Operations Readiness Project: the second piece of the puzzle is the hard work of designing the improved processes, in concert with IT, and preparing the operations organization to be ready to use those processes to generate business value.

Technology Readiness Project: the third piece is the readying of selected technology to enable the re-designed work process.

While readying the technology seems to be the “hard stuff” which technical professionals can sink their teeth into, the other two pieces actually are hard stuff too, requiring precision in work process engineering and job design.

Competencies of the digital engineer

If the digital engineer work domain is described as above, needed competencies that jump out are Business Principles, Petroleum Engineering (PE) and Information Technology (IT).

What’s new is the addition of Business Principles to the known mix of Petroleum Engineering and IT.

This business addition has to do with principles associated with work process design and engineering along with Program and Project Management.

While the three competencies are obviously all needed to work the kind of process improvement described earlier, all three competences do not have to reside in a single person.

A three-person team may be able to pool resources and have what it takes for the job.

On the other hand, two persons might be an ideal fit as long as both have deep technical expertise in either PE or IT and at least one has expertise in the business principles, in process architecture and engineering as well as program management.

The curriculum for formal study could include (see diagram above):

Petroleum engineer: physics and engineering Business value manager: Work process architecture, work process engineering and program management and program management

Information technologist: Information technologies and data management.

Business value manager

The one part of the curriculum that might need further explanation is Business Value Manager.

Work Process Architecture: The operations side of the upstream business can be described as an organized set of work processes (architecture) showing day-to-day work of the organization and its employees.

A work process architect would be an expert on the work process architecture, knowing interdependencies, recognizing strong and weak points and being able to identify “leverage points in the architecture” having the highest potential for improvement with better design and/or IT.

Work Process Engineering: Work process engineering includes expertise in identifying, improving and streamlining workflow as well as identifying the needed interfaces with digital technology, in order to produce additional business value.

Program Management: Program andProject Management provide the needed techniques, tools and discipline to direct a program of work that includes process re-design, selection of technology, and both the “readying of the technology for the organization” and the “readying the organization for the technology.”

Moving toward Digital Value Engineering

Realistically, a strong petroleum engineer can become a business value engineer faster than can an IT professional, adding business principles discussed in this article to the engineer.

Moving toward an organizational competence should probably follow a standard three-phase model like the one below.

Phase 1 – awareness and education of business value role
Phase 2 – conducting pilot projects for business value
Phase 3 – widespread integration of business value management

The idea would be to start now with exposure to, and experience in, projects that successfully integrate digital technology into an organization to achieve business value.

Associated Companies
» Holland Management Consulting
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