Aveva White Paper

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InteroperabilityAn AVEVA White Paper

Neil McPhater

Marketing ManagerAVEVA Solutions Ltd

Published April 2009


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Interoperability - an AVEVA White Paper

Page 2

Introduction

1. Interoperability Today

1a. Cost of inadequate Interoperability

1b. Barriers to Interoperability

2. Macro-economic drivers of Interoperability

3. Business Value

3a. Digital Convergence

5 Steps to Value

3b. Potential Value from Interoperability

4 Market Context

4a. Market Trends

4b. Evidence for Digital Convergence today

5. Interoperability infrastructure

5a. Engineering data standards and their

market adoption

5b. Standards-based Interoperability Layer

5c. Technology Platform

5d. Interoperability Partners

6. Conclusion:No Limits to value from Interoperability

References & Bibliography

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Contents


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Introduction

This White Paper sets out to define and describe software

interoperability within the context of the Plant, Marine and

Building & Construction industries today and in the future. It

identifies a long-term business trend and demonstrates how the

cross-functional team acts as its agent of change. It outlines a

business model which defines both interoperability value der ived

pragmatically today and the business mechanism for unlocking

value tomorrow. Finally, this paper outlines the sort of

interoperability infrastructure required to overcome the

complexities of interoperability and disentangle the spaghetti of

structured and unstructured data.

1. Interoperability Today

Interoperability is a term used increasingly in engineering

industries to refer to the sharing and exchange of digital

information. Its definition, however, is rather vague. What is

certain is that information from different sources is very hard to

integrate despite the value of the sum being greater than that of

the constituent parts - the description information silos is an apt

analogy. Creating a complete knowledge base from disparate

engineering information can seem like knitting with spaghetti.

Wikipedia defines interoperability as a property referring to theability of diverse systems and organisations to work together. More

specifically, interoperable computer systems must defer to a

common information exchange reference model. The content of the

information exchange requests are unambiguously defined: what is

sent is the same as what is understood.

A separate definition (ref.1) defines interoperability from three

interrelated viewpoints technical, cultural, and working practices.

From an information technology viewpoint, interoperability is the

ability to manage and communicate electronic data among

collaborating firms. From an organisational culture viewpoint, it is

the ability to implement and manage collaborative relationships

among members of cross-functional teams that enables integrated

project execution. These views can be brought together at a

working practices level to def ine interoperability as if all members

of a team can freely exchange data across different software

products and platforms, every member of the team can better

integrate the project delivery.


Page 3

What is certain is that

information from different

sources is very hard to

integrate despite the value of

the sum being greater than

that of the constituent parts -the description information

silos is an apt analogy...


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So interoperability is a desirable goal but, in spite of this and the

advances in IT capabilities, we find inadequate interoperability

everywhere. This is becoming a serious obstacle in the industry and

a number of studies in the last five years have attempted to qualify

the issues and quantify the costs.

1a. Cost of inadequate Interoperability

A report from NIST (ref.2) refers to the US capital facilities industry.

It estimates that inadequate (software) interoperability may cost

$15.8 billion annually in America. This corresponds to 1-2% of the

industrys entire annual revenue! Significantly, almost two thirds of

these costs are borne by Owner Operators. Engineering Procurement

and Construction contractors (EPCs) are also affected, but less so.

ENR magazine (ref.1) believes the potential dollar losses are twiceas big as the NIST estimates. This view is reinforced by other recent

reports (ref.3) (ref.4).

These reports suggest that the greatest pain is currently being felt

in the Architecture Engineering Construction (AEC) industry, but

many problems are shared with the Plant industry.

1b. Barriers to Interoperability

There are many limitations or barriers to interoperability, but three

principal categories may be identified. Firstly, information

technology is a key limitation, arising from incompatibility across

software products. This involves a number of factors; primarily,

incompatibility between the sof tware product data models.

Engineering data standards are intended to address this issue but,

perversely, have also been part of the problem. In the 1990s the ISO

10303 STEP international standard was hailed as the standard for

intelligent engineering exchange. However, there was no reliable

compatibility between data models from different software product

types.

A further hindrance to the use of standards to support exchangehas been the low acceptance within the market. A technically

excellent data standard is wor thless if it is not implemented

successfully by stakeholders like Owner Operators and EPC

contractors.

Secondly, organisational cultural boundar ies can limit

interoperability. Such boundaries include geographical distance as

well as functional ones between different offices, sites, time-zones,

divisions etc. They also include cultural inabilities to collaborate

with third parties.

Lastly, rigid working practices also create barriers tointeroperability if existing business processes are cast in stone.

Any such organisation will have great difficulty in establishing

flexible, cross-functional teams. One common impediment is the

failure to stipulate applicable data standards on commercial

contracts. This can be significant when close co-operation between

contractors is necessary during the contract, or during project

handover to the Owner/Operator, when a lot of valuable

engineering intelligence can be lost.


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...it estimates that

inadequate (software)

interoperability may cost$15.8 billion annually in

America. This corresponds to

1-2% of the industrys entire

annual revenue...


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2. Macro-economic drivers of Interoperability

To look into the future we must first understand what is driving

changes in the global economy. There are three main macro-

economic drivers. These are globalisation, digitalisation and the

industrialisation of emerging markets. In the last year these have,

unfortunately, been joined by the economically and f inancially

disruptive credit crunch.

Driven by continually reducing transportation and communications

costs, globalisation is the extension of markets across the globe,

driven by increased flows of capital, goods and services.

Globalisation develops through the reconfiguration of supply and

value chains, including outsourcing, and freedom of choice both in

markets and at the ballot box.

Technology continues playing a full part. Digitalisation and the

implementation of information technology have been driven by

dramatically falling telecommunication and computing costs. In his

recent book The world is flat (ref.5), Thomas Friedman describes

the convergence of a number of f latteners to create a whole new

digital platform which is global, web-enabled. and supports

multiple forms of interoperation and collaboration.

In synopsis, digital convergence is one of the most important

drivers af fecting the business environment today. Its key agent of

change is the IT-enabled networked team. Such teams can spanfunctions and organisations, facilitating changes in working

practices that can deliver very high value. So how valuable can such

networks be?

In fact, the value of a network grows disproportionately with size.

Historically, railway networks have demonstrated this, and the

importance of market-acceptable standards. A century and a half

ago, only after common agreement on the standard gauge track

were all the English railway Owner Operator companies able to

deliver interoperable services on a single national network. As a

result, the railway market increased disproportionately. In todays

digital world, examples includes mobile phones (based on the GSM

standard) and download music sales (based on MP3).

The UK rail network, 1960


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...the value of a network

grows disproportionately

with size... railway networks

have demonstrated this... a

century and a half ago, only

after common agreement

on the standard gauge track

were all the English railway

companies able to deliver

interoperable services on a

single national network...


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3. Business Value

Unlike the industrial economy and the railway network, in the

information economy businesses, markets, and products and

services are interrelated (ref.6). This has two potential ef fects.

Firstly, it opens up the possibility of collaborative advantage in

addition to competitive advantage. Secondly, new market

opportunities may be created as the value chain is reconfigured by

digital convergence.

The most important sources of value through interrelatedness are

networks and operational compatibility. Significantly, the more

users there are in a network the disproportionately greater becomes

its potential value. Specific requirements for compatibility include

standards-based interoperability, collaborative skills (with the

ability to partner across functions, boundaries and organisations),

and information content. IT-enabled, cross-functional networked

teams thus have considerable potential to reconfigure working

processes, remould organisations, and transform markets.

3a. Digital Convergence Five Steps to Value

One particularly illuminating business model articulates digital

convergence as adding value in five steps. It is called IT-enabled

Business Transformation and is illustrated below. (For a full

explanation see the original reference (ref.7). In general, the

greater the business transformation that takes place, the greaterthe business value that can accrue via the networked team. The

Five Steps are:

However, business transformation is not an overnight process it is

a long strategic process.

3b. Potential Value from Interoperability

One absolute pre-requisite for value from cross-functional

networked teams is common engineering data standards. Given

this, a number of key drivers emerge which can create value from

networks. These are shown graphically below.

Digital convergence is inexorably driving the global business

environment up through the interrelated steps. Importantly,network value increases as you climb the steps - initially internal to

the organisation (competitive advantage) then, later, external to

the organisation (collaborative advantage with partners). The value

sought by the Owner/Operator or EPC depends on their business

ambition attenuated by their risk-reward strategy.

There are a number of specific qualifiers which determine network

value. The first is its number of users. As you climb the steps the

number of network users increases. Remember that the value of a

network increases disproportionately the greater the number of

users.

The second value qualifier is the number of sources of engineering

content; that is, data from design software products as well as

lifecycle information sources. It is also clear that, as with network

users, the greater the number of sources of engineering content

that can be integrated, the greater the potential to deliver value.

Finally, the third qualifier of business value from the network is the

number of boundaries spanned by the networked team. As

mentioned above, this can include the number of geographical sites

spanned, functions crossed, organisations covered.


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Exploit Single Product

Exploit Integrated Products

Exploit Value Chain

Reconfigure Value Chain

Transform Market

LOW

LOW

HIGH

HIGHPotential Business Value

LevelofBusines

sTransformation

External to

Organisation

Internal toOrganisation

IT-enabled Business TransformationEngineering Value Chain


Exploit Integrated Products

Exploit Value Chain

Reconfigure Value Chain

Transform Market

LOW

LOW

HIGH

HIGHPotential Business Value

LevelofBusinessTransformation

External toOrganisation

Internal toOrganisation

IT-enabled Business TransformationEngineering Value Chain


Data Standards

Added-valueNetwork


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4. Market Context

The Gartner Report (ref.3) cited previously surveyed the business

environment of the AEC market for market trends worldwide.

Gartner defined this market as comprising four sub-markets:

Architecture, Plant design, Civil applications (including Building

design) and Facilities management. The key market trends

identified are as follows:

4a. Market Trends

For all AEC markets the following trends exist:

In general, Owner Operators will exert increasing influence over

their chosen markets as they have the biggest stake in their own

complex engineering projects, buildings and operating assets. Globalisation of both Plant and AEC projects is dr iving the

development of software to overcome geographical barriers to

interoperability.

Interoperability with the ever-increasing quantities of both

structured and unstructured legacy data demands open access.

For the Plant design market the following trends exist:

A lifecycle approach to information management must be an

integral part of any software vendors product set. Open access to

the widest possible range of information sources is key.

Data integration between Owner Operators and EPC companies

will become an increasingly important issue and will include a

requirement for two-way data interchange from the outset.

For the Architecture and Building Design market the following

trends exist:

The Building Information Model (BIM) is now beginning to have a

substantial business impact across this complete value chain.

The software vendors who will be most successful are those that

supply integrated solutions across the complete lifecycle. Thesesolutions will attract new types of customers thereby increasing

the market

Another way to look at digital convergence is to consider the market

diagrammatically, as illustrated below. Until quite recently the

markets for Plant, Marine, and Architecture and Building design

were relatively discrete, with little overlap. However, this is

changing.


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Converged software markets forPlant, Marine & Building design in engineering

and business domains

Mechanical Equipment

ISO 15926market (Plant)

BIM market(Buildings)

Increasing movetowards industrydata standards -

away fromproprietary formats

Increasing moveto software

products withdata models

Increasing need formanaging large volumes

of data on globalengineering projects

MarineDesign

SoftwareMarket

PlantDesign

SoftwareMarket

BuildingDesign

SoftwareMarket

As-built models(scans, photos, terrain, maps)

TODAY

TOMORROW

FUTURE

Digital Convergence and Markets


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As well as the three markets mentioned previously, the business

environment also includes mechanical design and the as-built

engineering domain. A recent report (ref.8) considers the overlap

between mechanical CAD and plant layout tools for Power Plant

design, and how to get the best value respectively from mechanical

and plant software products. Separately, site surveying for as-built

surveys has recently received a considerable boost with the

introduction of high-bandwidth laser scanning, dramatically

reducing the costs and increasing the precision of as-built data

capture.

There are also a number of long-term trends (shown in the diagram

as downward-pointing arrows.) First, there is the move away from

proprietary data standards towards market-acceptable

international standards. Second is the move towards data-modelled

software products with a high level of engineering intelligence. This

reflects a move away from 2D CAD draughting with its very much

lower level of engineering intelligence. Thirdly, there is the need to

process and manage ever-increasing quantities of data.

4b. Evidence for Digital Convergence today

So much for the business theory! But what is the evidence to

support it in todays information-intensive engineering businesses?

There are many examples of digital convergence today. These

include:

1. In the Plant market, handover is the intersection between an

assets design & construction phase and its subsequent

operation. Digital handover is proven to have high potential for

replacing existing paper-intensive processes with improved

automation in the population of Operations systems and tools.

2. The emergence of BIM as an international engineering data

standard. A recent article in The Economist (ref.9) stated that

Aircraft and cars are designed using elaborate digital models.

Now the same idea is being applied to Buildings. It also

observed that very complex new buildings, such as the

Guggenheim Museum in Bilbao and the Walt Disney Concert Hall

in Los Angeles might not have been possible to build at all

without the help of BIM.

3. The overlap between the Plant and Marine markets is best

exemplified by Floating Production Storage & Offloading (FPSO)vessels; offshore Oil & Gas production facilities that extract

underwater petroleum reserves. They are, in effect, moored oil

tankers with oil and gas processing facilities designed into their

structures.

4. Last year Bentley Systems Inc and Autodesk Inc surprised the

market by announcing (ref.10) that they had agreed to

collaborate to support interoperability between their software

products.


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...site surveying has recently received a considerable boost with the

introduction of high-bandwidth laser scanning, dramatically reducing

the costs and increasing the precision of as-built data capture...


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5. Interoperability Infrastructure

So what sort of infrastructure is needed to deliver value on

engineering projects and operating assets today without

compromising the future potential of interoperability? Certainly it

must overcome the barriers to interoperability described above, but

it must also include appropriate data standards, an Interoperability

Layer, a robust and flexible Technology Platform, and supporting

interoperability partners.

5a. Engineering data standards and their market adoption

After recognising the shortcomings of the ISO 10303 STEP standard,

in the mid/late 1990s the Norwegian POSC CAESAR Association

(PCA), with able assistance from the Dutch SPI-NL consortium set

about rectifying the non-compatibility issues. Building on the

foundations of STEP they established and developed ISO 15926 for

the Offshore Oil & Gas industry. This has now achieved the status of

an international standard.

Over the last few years, in the process plant industry, FIATECH has

brought fresh American vigour to accelerate the deployment of ISO

15926 (ref.11) and ensure its wider acceptability. This American-

European double act is speeding up the adoption of market-

acceptable standards.

As PCAs efforts over the last decade have shown, the developmentand successful implementation of such data standards and

methodologies as ISO 15926 and BIM takes time and effort. The

extent of the Norwegian ambitions is exemplified by their offshore

vision of the future that is aiming towards a digital infrastructure

and information platform to enable unmanned operation, from a

shore-based control centre, of heavily instrumented Oil & Gas

production platform facilities in the North Sea and Barents Sea.

Market adoption by industry stakeholders also does not happen

overnight. Engineers are justifiably cautious about adopting new

practices. This is strikingly illustrated in the Figure below (ref.12)

which envisages that market adoption of BIM by structural

engineers will not reach a tipping point until after the year 2015!

5b. Standards-based Interoperability Layer

Within its widest context a standards-based Interoperability Layer

should act like a multi-lane highway bridge between the external

business environment and a Technology Platform. On this Platform,

information is harnessed with consistency and full accessibility.

While it is important to have a clear vision for the future, it is vital

to get value from appropriate engineering data standards today.

This demands a pragmatic approach to exploiting workable

standards right now while continuing to drive the development and

acceptance of industry-wide data standards.

This leads to the need for a pragmatic, standards-based

Interoperability Layer. It must be able to deal with the spaghetti-

like complication of todays business environment and bring order

out of the chaos of heterogeneous information on topical industry

project and operating assets right now. It must also be able to be

extended and stretched to meet future demands for improving

existing standards or introducing new ones.

The diagram below illustrates a sub-set of an Interoperability Layer

in this instance an as-designed domain sub-set. It supports

appropriate engineering and commercial data standards in

different markets Mar ine, Mechanical, Plant, Building &

Construction.


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...a standards-based

Interoperability Layer should act

like a multi-lane highway bridge

between the external business

environment and a Technology

Platform...

2000 2010 2020 2030Year

100

80

60

40

20

0

Percentageofindustry

Structural Engineer projects BIM adoptionby structural engineering industry

8%


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5c. Technology Platform

The Technology Platform must be easily and quickly implementable,

and provide a number of basic capabilities across all engineering

domains and related business functions. As outlined above, the

Platform must be able to support an extensible Interoperability

Layer which is based on a number of engineering data standards. It

must also be able not only to manage vast amounts of information,

including documents, but also to share and exchange this

information with a high degree of integrity and no loss of

engineering intelligence.

The Platform must also be able to support networked teams as they

adapt their business practices and workflows to exploit emerging

business opportunities.

The Platform must be tightly integrated with the Internet and the

World Wide Web to take full advantage of the Flat World envisaged

by Thomas Friedman. This will include sophisticated levels of access

to support the work processes of networked project teams, fleets of

operating assets, organisations and business units.

The Platform must be able to support the development of new

software products which can take advantage of the Platforms

capability.

Finally, the Platform must be able to incorporate third-partyinformation technology which strengthens the Platform and adds to

its capability and not solve just the Platform providers own

interoperability issues. This is described in paragraph 5d. opposite,

under information technology partners.

5d. Interoperability Partners

There are a number of types of Interoperability Partners. These

include partnerships for providing information technology, for

integrating engineering content, and for business implementation

on engineering projects and operating assets.

Information technology partners bring specific technologies into

the Technology Platform, increasing its integrated capabilities and

its potential to deliver more value. Such technologies might include

database manipulation, document management, engineering data

translation and workflow management.

Engineering content integration partners are those with specialist

competencies in particular software products and/or informationsources. Relating to the Interoperability Layer diagram below, such

partners are likely to include those who support such engineering

and commercial content as:

ships hull structure

mechanical equipment

electrical and instrumentation

3D piping

P&ID schematics

3D steel structures

as-built models

Business implementation partners supply extra resources to scale

up interoperability implementations on customers engineering

projects or operating assets. Each customer, whether Owner

Operator or EPC contractor, will have his own specific requirements.

The value delivered might be at enterprise level or at the level of an

individual asset or engineering project.


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Interoperability Layer

HullStructure

MechanicalEquipment

E&I 3DPiping

P&IDSchematics

3D SteelStructure

ERP,EDMS,

DBs, etc

DCS,real-time,

etc


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6. Conclusion: No Limits to value from

Interoperability

Digital convergence is a long-term business trend which is

inexorably changing the business environment. However digital

convergence is as much about the journey as the destination. For

Owner/Operator and EPC contractor alike, this journey offers the

potential to overcome software incompatibility and progressively

climb the Steps to Value.

Substantial value is already being gained in the Plant, Marine and

Building Design markets by the pragmatic use of appropriate

standards. Wider usage of cross-functional teams and the changing

of working practices are taking greater advantage of the

collaborative power of computer networks. Extensible

interoperability infrastructure appropriate to your business needs

can deliver value both now and in the future. This technical choice

can be reinforced by a contractual one to prescribe appropriate

data standards, such as ISO 15926 and BIM, on planned contracts

for both engineering projects and asset operations.

Your interoperability aim should be No Limits to:

functions crossed

numbers of users in networked teams

sources of engineering content

organisations covered global operation

volumes of data managed, both structured and unstructured

engineering and commercial domains spanned

Your objective should be to start disentangling the spaghetti of

interoperability right now and strive to reach the next value Step

ahead your competitors.


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References & Bibliography1. The McGraw Hill ENR Technology for Construction report on Interoperability in 2007.

2. National Institute for Standards & Technology (NIST) 2004 report, Cost analysis of inadequate interoperability in the US capital facilities industry.

3. Gartner Report, Market Trends: Full Speed Ahead for the Worldwide AEC market, Sharon Tan, October 2006.

4. ISO 15926 Research Report, Business Advantage. The Impact of Open Standards, Sue Hannay, January 2009.

5. Friedman T L, The world is flat, Penguin, 2005.

6. Scott-Morton M S, The Corporation of the 1990s Information technology and Organisational Transformation, New York, Oxford University Press, 1991.

7. Venkatraman N, IT-Enabled Business Transformation, Sloan Management Review/Winter 1994.

8. Cambashi Limited report M2850, Using mechanical CAD and plant layout tools for power plant design, 2008.

9. Economist, From blueprint to database, June 2008.

10. ENR 8 July 2009. Bentley and Autodesk Agree to Exchange keys to sharing of data.

11. Joint IDS/ADI Project. See respective websites of FIATECH and POSC CAESAR Association.

12. BIM uptake curve source: Structural Engineer.

...your

objective

should be to

start disentangling

the spaghetti of interoperabilityright now and strive to reach the

next value Step ahead your

competitors....


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Headquarters

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Tel +1 713 977 1225

Fax +1 713 977 1231

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Headquarters

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UK

Tel +44 (0)1223 556655

Fax +44 (0)1223 556666

AVEVA believesthe informationin this publicationis correct asof itspublicationdate.As partof continuedproductdevelopment,such informationissubjectto change withoutprior notice andisrelated to the current sof tware release. AVEVA is not responsible for any inadvertent er rors. All product names mentioned are the trademark s of their respective holders.

Copyright 2009 AVEVA Solutions Limited. All rights reserved. WP/INTOP/09

www.aveva.com

Headquartered in Cambridge, England, AVEVA Group plc and its operating

subsidiaries currently employ more than 800 staff worldwide in England,

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