The petroleum industry implements integrated operations (IO) by adopting information technology, improving access to real-time data, integrating people and suppliers, changing work processes, and by doing so, enable better and faster decisions. IO brings benefits but the economic value is not always known or well understood. Insights to critical success and risk factors are prerequisites for sustainable integrated operations and its value.
We have developed a decision analytic framework to assess economic value of IO. The framework builds on contemporary literature that emphasizes the need to assess information technology in a broader context of organizational structures and work processes. Therefore it has a built-in qualitative assessment of intangible capital that provides indispensible insights into required competencies, capability and risks associated with a particular IO component (technologies, processes to be implemented) based on their maturity level. Yet, it allows assessment of performance and expected value using integrated formal decision analysis. Level of achieved benefits and how to maintain or even further improve them is a critical question that our framework provides insights to.
The framework was developed and validated in industrial case studies: integrated planning; and integrated drilling with companies operating on the Norwegian Continental Shelf. Hence, here we illustrate the framework and its application by a synthesized case from two industrial case studies, and highlight the lessons learned about the design and efficiency of the valuation framework.
We found the framework to be an efficient tool to evaluate projects implementing IO not only with regards to economic value, but also to gain deeper insights into determinants and uncertainties related to value. We can conclude that strength of the framework is a methodological process to analyze changes in competencies and capture downside risk reduction by IO.
The project has been performed at the IO Center (the Center for Integrated Operations in the Petroleum Industry, http://www.iocenter.no/).