Addressing profitability in times of sustainability

Asian Downstream Insights speaks with AVEVA’s Boris Marrone, Vice President, Head of South Asia and Southeast Asia, to understand more about the company’s effort to help drive sustainability in the industry, and get to know the “connected worker”.

Thank you for your time! Before we start off, could you share a little bit about how you got involved in the industry and your current role at AVEVA?

I currently lead the AVEVA business in South Asia and South-East Asia. Prior to joining AVEVA, I worked for Siemens PLM for 18 years, and I have been based in Asia for the bulk of that time. I joined AVEVA over 2 years ago, having witnessed its successes in the industry first hand. I keep on being amazed by the amount of talent and expertise that we have in our organization. Together we help companies in Oil & Gas as well as Power Industries on their digital transformational journey.

I have always been passionate about leading and motivating a team by advocating a business environment where people can thrive and grow. And AVEVA gave me that exact opportunity. What led me to join AVEVA is their focus on bringing to market software solutions that inspire people to shape a sustainable future, optimize their operations and supply chains. AVEVA’s successes speak for themselves, and in the last 12 months alone, we have grown our foothold by over 40% YoY in South Asia and South-East Asia.

There is a lot of talk now about energy transition and the future of oil. Where would oil be in 10 years from now, given that the world is pushing towards embracing cleaner fuels? Will oil get its share of investments?

As the global population grows and living standards improve, energy needs are set to continue rising. According to ExxonMobil’s latest Outlook for Energy global demand will rise by 20% by 2040. BloombergNEF’s New Energy Outlook 2020 predicts oil demand will peak in 2035, while gas will continue to rise until at least 2050. At the same time, society is calling for cleaner energy, so oil and gas companies must look to supply their energy with a greater focus on environmental performance. With this in mind, many are focusing on energy transition and net-zero goals.

Pivoting to this new energy future is challenging, but digitalization has an important role to play in helping the sector make this transition. Solutions such as remote operations centers can help optimize efficiencies and meet environmental targets while ensuring competitiveness thanks to lowering costs and downtime.

However, global spending on offshore decommissioning is expected to reach almost USD100 billion between now and 2030, according to IHS Markit – that’s a jump of more than 200% from the last decade – potentially affecting 33% of fixed platforms and 43% of floating platforms currently in operation.

In addition, the Asia Pacific region will see the second highest spending (23%) globally after Europe (33%) and ahead of North America (17%).

Aside from costs, the oil and gas industry also faces increasingly stringent government regulation on decommissioning, which incidentally comes at a time when end-of-life assets and structures are larger and more complex.

Decommissioning is a costly and complex process. It is in this period that critical decisions – those that balance feasibility, environmental impact, safety, and budget – must be made.

Hence, this 10-year period is crucial for industry players to ensure that the whole transition – from optimizing the performance of late-life assets to the final phase of decommissioning – takes place safely, efficiently, and in the most cost-effective way possible.

To mitigate these changes and bring the most value and efficiency through these and other transformative phases, business leaders need to achieve three near-term performance milestones:

1. Accurately measure and visualize the entire industrial lifecycle ahead of important deadlines;
2. Develop clear asset management strategies and ensure greater operational agility and resilience.
3. Increase operational and asset reliability

How can refiners effectively capture the benefits of the energy transition?

No matter whether you begin in the operational or project phase of your plant, the answers to more sustainable practices are already available in the data. Creating a data-centric culture that collates and verifies engineering data into a single, trusted hub right from the initial phases of a project is the cornerstone of a reliable digital twin. Research by Deloitte found that digital transformation provides an opportunity to gain safety, efficiency, and significant financial benefits, including a 5-10% reduction in build costs and a 10-20% reduction in operational costs.

Tell us a little more about AVEVA’s commitment to sustainability. What’s AVEVA’s vision to transform the industry and implement a more circular economy?

At AVEVA, we recognize the core role technology can play – and we take our responsibility seriously. We’re extending our capabilities to offer our customers real solutions. Because when it comes to sustainability, our biggest opportunity is what we call our handprint – how our software can enable and drive sustainability for industries.

To understand the scope and scale of how technology can drive sustainability, let’s look at Henkel, a chemical and consumer goods company headquartered in Dusseldorf, Germany. To support Henkel’s sustainability commitment and meet their customers’ demand, they’ve built a digital backbone that connects their global operations using AVEVA software in the Cloud. There are 3,500 sensors in each site which provide 1.5 billion data points to optimize asset performance. So far, they’ve cut their environmental footprint by one-third, using less energy, less water, and producing less waste. The saving is growing by 16% every year.

These examples offer lessons beyond the manufacturing sector. After the past twelve months, many industries are reviewing the social and governance implications of new stimulus driving the economic recovery. Our solutions can enable diverse sectors to boost efficiency, sustainability and connect teams in real-time to drive value.

At AVEVA, we’re committed to measuring and reporting on our environmental stewardship efforts for our operations too. We recently joined Schneider Electric and many of our customers and partners as signatories of the United Nations Global Compact, and we have also invested in membership of BSR. These are all vital steps along the road to recovery, innovation, and building back better.

So, what’s at the top of AVEVA’s sustainability agenda?

As a software company supporting the digital transformation of industrial companies across the globe, we continue to see those climate-related opportunities as very significant. For example, by providing real-time energy data and supporting improved operational efficiency, we have the potential to help hundreds if not thousands of our customers – some of whom have very sizable carbon footprints – to cut their energy consumption and emissions. We have started to think about this positive impact of our products as our sustainability handprint, and as part of our evolving disclosure strategy, we are looking into developing better qualitative and quantitative metrics to speak to that.

We are also planning to launch an employee engagement program to help build sustainability capacity throughout the organization because to be successful, we need to harness the power of everyone working together. This is particularly true of decarbonization, a critical area of sustainability where we are currently taking steps to set company-wide targets.

Tell us a little more about AVEVA’s integrated ESG Vision.

We fully recognize the significance of the Environmental, Social, and Governance (ESG) aspects of business performance, including their impact on long-term, sustainable value creation. We believe in building trust through transparency and dialogue with all stakeholders, from our workforce to our customers, partners, investors, and local communities.

Our three main pillars for an integrated ESG vision focus on the operational footprint, technology handprint, and an inclusive culture. We define our operational footprint as our efforts to demonstrate ethical business practices and manage the environmental impacts of our operations in line with the highest standards.

In 2022 we seek to enhance our focus on our operational footprint through the following:

• Continue the shift to renewable energy across our offices and data centers.
• Engage customers and suppliers on climate action opportunities and advance dynamic work and sustainable business travel through policies and practices.
• Complete climate scenario analysis and further integrate climate into our risk management.
• Continue to enhance AVEVA’s legal and ethical compliance program and build stakeholder trust through increased disclosure.

Our technology handprint is the positive environmental, operational and social impact that our trusted and secure software can offer our customers. We aim to further evolve our technology handprint in the future by:

• Establishing a baseline and goals for measuring the sustainability impacts of our software
• Leveraging learnings from our external partnerships and collaborations to grow our impact
• Engaging with R&D to embed principles of responsible design and use throughout the product lifecycle
• Continuing to invest in enhanced cybersecurity, physical security, and privacy training for employees

As a company, we are passionate about embracing and supporting a diverse, equitable, and inclusive culture for our people and communities around the world. We’ve come a long way in inclusivity, but we don’t aim to stop there, as we further build on inclusivity by:

• Drive improvements on all DEI themes as described in our new 5-year strategic plan for DEI
• Increase the number of early careers opportunities at AVEVA and continue to invest in upskilling our workforce
• Progress our culture workstreams and maintain active engagement with our employees on topics impacting wellbeing, including COVID-19, integration, and the shift to dynamic work

Increasing profitability is a key question regularly addressed by refiners, particularly in recent times. What can refiners do to increase profitability with resources that they already have?

There’s no disputing that the digitalization of industrial capital expenditure projects is transforming how we work and collaborate – helping deliver projects quicker and more cost-effectively. But delivering value is only half of the story. Now, driving forth environmental performance has become another equally important driver in setting the industrial outperformers apart.

This means that industrial operators face a double conundrum as they plan for the plants and ships of the future: How to improve the profitability of their capital assets while also meeting increasing  ESG targets.

Existing assets are prime grounds for achieving both objectives. They require significantly less investment than a new asset, freeing up capital for digital transformation initiatives which unlock smart operational improvements that can benefit your bottom line and reduce your carbon footprint.

So, how can companies maintain regulatory compliance, reduce emissions, and boost operational capacity and efficiency? When the plant is new, the answer is simple – leverage data-driven insights from digital twins – but on a facility built years before digital systems were commonplace, where do you begin?

A brownfield capital project faces many of the same challenges as a greenfield project. Siloed teams, ineffective information sharing, and constant project changes lead to schedule and cost overruns. However, teams work within the constraints of an operating plant on existing assets, which creates added pressure to minimize downtime for the project and rapid ramp-up back to capacity. That’s why it’s especially important to approach your brownfield project in a data-centric way, using a single hub for the engineering tools and data they create. This approach provides an intelligent digital twin hosted securely in the cloud to create transparency that helps teams to deliver projects on time and schedule, while also shortening handover time, improving its quality, and minimizing unplanned future maintenance downtime.

What technology and software solutions can AVEVA offer to impact sustainability for the better?

Companies around the world have committed to reducing their environmental footprint. AVEVA believes the business community must now go further, by way of positive contributions to sustainability through our activities and partnerships – or in other words, our sustainability handprint. Given the nature of the capabilities AVEVA provides to our customers, our solutions make a constructive impact on environmental sustainability. Data infrastructure management solutions such as the AVEVA PI System, delivered in partnership with Microsoft’s Azure Cloud, can help thousands of very different businesses find innovative routes to achieving their sustainability goals and becoming climate positive.

What should be the main priority for operators to survive and thrive in the post-pandemic era?

The role of the ‘Connected Worker’ will be instrumental in enabling digital solutions to optimize business returns in a post-pandemic world.

Now more than ever, keeping frontline industrial workers safe, while at the same time ensuring business continuity and operational resilience is vital. For example, Connected Worker technology is helping many AVEVA customers maintain their critical operations and keep workers safe while in parallel, saving businesses time and money. Those that haven’t digitized their operations will struggle as they face the demand for social distancing and remote work brought on by the pandemic.

The implementation of AI and machine learning (ML) in industrial operations alone will not transform businesses. It is imperative that enterprises empower their people to help drive operational improvements in reliability, availability, consistency, and sustainability. The connected workforce is now becoming the agent of change. As operations become more and more autonomous, ensuring the reliability and safe operation of critical assets with minimal supervision is vital.

Personnel on the shop floor and in the field will need more guidance and aid, as deep expertise becomes scarce. Advanced machines are developing core competencies around human needs. The “Connected Worker’s” focus today, is on considering the needs of the human behind the ‘working asset’, and this has grown to become part of the engaged workforce that will attain the full value potential of digital transformation programs.

Boris Marrone is leading the South Asia and South-East Asia organization within AVEVA.  He is a passionate business and sales leader with over 20 years of experience in the information technology industry.  Together with his talented and experienced team, he eagerly helps organizations in the region to achieve their digital transformation goals.

Having joined AVEVA in January 2020, Boris has successfully steered the company’s Asia Pacific business towards success.  As a passionate leader and motivator, he advocates for a business environment where people can thrive, develop and contribute to the organisation’s growth.  Under his leadership, Boris assembled a large team that now drives over 30% of the entire APAC revenue.  He has built many strategic relationships with customers, with long-term partnerships that will last for many years.