Do You Manage Your Automation Portfolio, or Does it Manage You?

Do end users take the time and effort to "manage" a portfolio, or do they simply react to changing circumstances, such as obsolescence?

There was a time when automating an industrial process involved selecting and purchasing a suitable set of products, installing and configuring them according to supplier directions, and developing the control logic necessary to achieve the desired result. This approach is still sufficient for relatively straightforward applications, but implementations have become more complex to address more challenging business requirements. Modern automation systems do much more than simply control physical equipment. They must be able to collect, process and store large amounts of process data, while communicating with a wide variety of related information systems.

These systems are often installed in existing facilities, coexisting with a variety of older or legacy technology. A consequence of these changes is that many asset owners have accumulated large and increasingly complex collections of software and hardware products.

Asset owners use systems and technology to create and implement solutions that address business problems. These solutions must be consistent with current or planned business processes. The requirements and constraints of such processes provide the most significant drivers. The pursuit of increased efficiency and effectiveness leads to an increased level of integration between solutions, often crossing traditional business process boundaries. It is also possible that some business processes may have been altered or even redesigned to reflect the capabilities and limitations of specific IT solutions.

These solutions are assets of significant value, just as are physical equipment, building and other materials. Collectively, they can represent a significant investment in money and effort, with a correspondingly high replacement value. In some cases, there may be significant additional value in custom or proprietary intellectual property.

Operations and Engineering organizations within asset owner companies are accountable for these solutions and have specific responsibilities that they cannot easily delegate to the internal or external Information Technology (IT) provider.

Foremost among these responsibilities is the management of the life cycle of the various components. This includes making decisions about when to acquire, update, or retire specific elements, as well as when and how to pursue needs for interconnection and data exchange between systems. Responsible parties can take either a proactive or reactive approach to addressing these responsibilities.

In many cases the response is reactive, involving decisions made in response to changes in technology driven by a host of external forces. Anyone familiar with the typical industrial automation environment can share many examples where various systems and components are still operating well past the point where suppliers or integrators can fully support them. In the case of hardware, new replacement parts may no longer be available. Software components may have reached a stage where they can no longer be updated, either for new functions or to improve their security.

Such a reactive approach may work for some time, but it is almost inevitable that the owner will face a crisis involving older systems. They may no longer provide necessary capabilities, or reach a stage where nobody is available who has the skills and knowledge required to support them.

Given this inevitability, it is better to act proactively, and in a manner consistent with business strategy. Companies face challenges in improving operational effectiveness and efficiency to remain competitive in their respective industries. Changing business needs and expectations often require integrating business processes with manufacturing and engineering operations. This leads to a gradual evolution of large and more complex collections of IT solutions to support these business processes. Just as with physical equipment, these solutions and their component hardware and software are assets that must be actively managed.

There are few situations where all the components of the collection of solutions are from a sole source or supplier, or built on a common architecture. It is much more common to have a collection of solutions from multiple sources. Even moderately sized collections of IT solutions can represent a significant investment in money and effort, just as is the case with physical assets. Resources are required not only for their acquisition and development, but also for their long-term operation and support. In some cases, there may also be significant value in custom or proprietary intellectual property.

Failure to properly manage these solutions can lead to increased susceptibility to security threats and a higher probability of complex failures. This requires acquiring and maintaining interfaces and other means of integration. It also means that decisions made with respect to one solution may impact others. Understanding these interactions and dependencies is only possible by taking a broad view of the collection.

Failure to meet the management requirements by taking steps such as freezing system versions or dropping support agreements can provide short-term relief, but eventually a price must be paid. In some cases, business process improvements could be hampered or even prevented by the inability to make the corresponding changes to supporting IT systems and solutions. This may be the result of complexity of systems, or simply the lack of people with the necessary skills and experience. In such situations, the IT systems and technologies are a major impediment to business process improvement.

Responding to the above challenges and complexities begins by taking a portfolio approach to solutions management. The processes, tools and techniques used are similar to those used to manage other types of portfolios, such as those consisting of intellectual property or physical assets.

The scope of the portfolio(s) can be expressed in any of several ways. In some situations, it may be possible to define the scope as including all solutions provided by a specific supplier. This is often not possible when dealing with collections of Operations IT solutions that may have been acquired from a variety of suppliers, and supplemented by internally developed solutions. In such situations, it is more effective to define the scope in terms of the affected business processes.

With the functional scope defined it is essential to define accountability for each specific portfolio. The next step is to identify all the components of the portfolio. Each of these are in turn described or classified using attributes such as source, life cycle position, and degree of customization or additional integration required. Understanding the degree of integration is necessary to identify cases where changes to one solution may have secondary effects on others in the portfolio.

An essential component of effective solutions management is a solid understanding of the life cycle concept. This concept can be applied from any of several perspectives, including acquisition, development, implementation and support. Each of these represents a different view as a basis for making decisions. The selection and acquisition of information technology and solutions is the most common perspective used in the decision-making process.

It is also important to understand the life cycle position of solutions with respect to development. Solutions that may have only recently become available can be expected to have frequent updates to add new functions or address problems. More mature solutions may change less frequently and obsolete functions may have no updates or improvements planned or available. Each of these situations present specific challenges. The implementation life cycle position is a measure of how widely the solution has been deployed. Solutions that have been widely deployed generally present fewer problems as a result of this experience.

The asset owner is responsible for defining and understanding the business strategy. While forces such as technology changes or new versions of specific solutions may influence changes to the portfolio, the full implications for the strategy and associated business processes must be understood before such changes are implemented.

Asset owners have a choice. They can simply respond to technology changes, or they can take charge and actively manage their portfolio and the products and technology that form it.