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New Research: Improved Project Management Is Key to Reducing Infrastructure Risks in Energy, Power, and Chemicals Industries
The process manufacturing industry is confronting significant infrastructure problems that heighten risks to operations and leave executives struggling to bring their aging facilities into the twenty-first century, according to a new report by the Economist Intelligence Unit and sponsored by Oracle.
One executive put the challenge in stark terms, saying "It takes years to build a reputation, but one serious infrastructure failure can destroy it."
The report, "The Impact of Aging Infrastructure in Process Manufacturing Industries," is based on a recent survey of 366 executives. The research found that aging systems are negatively impacting—sometimes substantially—companies in oil and gas, utilities, chemicals, and natural resource industries. A commanding majority—87 percent of the respondents—said aging infrastructure has impacted operations in the past 3 to 5 years, with 1 in 10 saying they suffered severe consequences that they are still trying to fix.
But as a group, the executives see a way to improve agility and seize new opportunities while protecting customers, employees, operations, and corporate images from costly infrastructure failures. The best solutions involve a blend of technology, project planning, and due diligence, the report stated. The executives added that these elements help organizations identify and resolve problems before crises occur.
Project Management Plays a Pivotal Role
This combination of solutions can also address the business goals that ranked highest among the executives. These included the ability to be more agile and pursue new business opportunities, to confidently act on expansion goals, and to become more competitive versus peers. But long-term modernization efforts are challenged by stretched resources, rising regulatory demands, and unpredictable economic cycles, the executives said.
Proactive risk management, increased financial resources, and a more skilled workforce were also seen by all respondents as strategies that would help their organizations better meet future schedule and budget goals. Executives who work for companies that consistently bring projects in on time and on budget also report easier relationships with regulators, according to the report.
This helps explain why representatives from all process manufacturing sectors identified improved project management and better upfront planning as the best way to overcome obstacles and meet new budget and expansion goals. Better planning will help companies evolve from a "wait till it breaks to fix it" to a "fix it before it breaks" mindset, the report noted.
New Technologies Mitigate Risk
In a related finding, technology is viewed as an efficiency enabler among a broad swath of executives. A majority of the respondents named technology that improves infrastructure efficiency as a top-three priority. New technologies may also help companies extend the lifecycle of their investments, reduce the risk of infrastructure failure, meet customer demand, and help executives identify and deal with infrastructure problems before they turn into crises, the report points out.
Download "The Impact of Aging Infrastructure in Process Manufacturing Industries" to learn how leading executives view infrastructure modernizations in the years ahead. Learn how Oracle's Primavera Enterprise Project Portfolio Management can help organizations improve project management and upfront planning for large infrastructure initiatives.