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Enterprise Project Portfolio Management Edition

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October 2013

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EPPM Is a Must-Have Capability as Global Energy and Power Industries Eye US$38 Trillion in New Investments

“The process manufacturing industry is facing an unprecedented challenge: from now until 2035, cumulative worldwide investments of US$38 trillion will be required for drilling, power generation, and other energy projects,” Iain Graham, director of energy and process manufacturing for Oracle’s Primavera, said in a recent webcast. He adds that process manufacturing organizations such as oil and gas, utilities, and chemicals must manage this level of investment in an environment of constrained capital markets, erratic supply and demand, aging infrastructure, heightened regulations, and declining global skills. In the following interview, Graham explains how the right enterprise project portfolio management (EPPM) technology can help the industry meet these imperatives.

Q: Why is EPPM so important for today’s process manufacturers?
A: If the industry invests US$38 trillion without proper cost controls in place, a huge amount of resources will be put at risk, especially when it comes to cost overruns that may occur in large capital projects. Process manufacturing companies must not only control costs, but also monitor all the various contractors that will be involved in each project. If you’re not managing your own workers and all the interdependencies among the different contractors, then you’ve got problems.

Q: But many organizations still have only limited visibility across their entire portfolios, which makes these types of analyses difficult, correct?
A: Absolutely. The right EPPM solution, such as Primavera, can provide a complete view of all projects and activities in one system and in one place. For example, if priority changes within your company require you to delay a couple of projects and accelerate other ones, how can you decide what to do if you don’t have a single place to see all the relevant information and compare individual projects against each another? Companies need a single source of the truth to have the enterprise visibility to make those decisions. The most successful companies work at that level.

By contrast, if an organization uses a system that isn’t enterprisewide, managers will be monitoring only one project at a time and won’t understand the dependencies among different projects and activities. So if one division reports a scheduling problem, it won’t be reflected in reports from the contractors involved in the project because they’re all using different systems. Ideally, you want an all-encompassing solution that collects all the updates that people feed into it.

Q: What else should process manufacturers look for?
A: It’s also important that an EPPM solution has the ability to manage more than just capital projects. For example, it’s best to manage maintenance and capital projects in the same system. Say you’re due to install a new transformer in a power station as part of a capital project, but routine maintenance in that area of the facility is scheduled for that morning. The lack of coordination could lead to unforeseen delays. There are also IT considerations that impact capital projects, such as adding servers and network cable for a control system in a power station. What organizations need is a true EPPM system that’s not just for capital projects, maintenance, or IT activities, but instead an enterprisewide solution that provides visibility into all types of projects.

Listen to Iain Graham discuss the US$38 trillion challenge for process and power organizations in an on-demand webcast. Discover the practical framework for successfully managing this massive capital spending and learn more about Oracle’s Primavera solutions.

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