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2017 North American Asset Performance Management Solution Oil & Gas
Product Leadership Award
NORTH AMERICAN ASSET PERFORMANCE MANAGEMENT SOLUTION OIL & GAS
PRODUCT LEADERSHIP AWARD
2017
BEST PRACTICES RESEARCH
© Frost & Sullivan 2017 2 “We Accelerate Growth”
Contents
Background and Company Performance ........................................................................ 3
Industry Challenges .............................................................................................. 3
Product Family Attributes and Business Impact ........................................................ 3
Conclusion........................................................................................................... 7
Significance of Product Leadership ................................................................................ 8
Understanding Product Leadership ................................................................................ 8
Key Benchmarking Criteria .................................................................................... 9
Best Practices Award Analysis for Oniqua ...................................................................... 9
Decision Support Scorecard ................................................................................... 9
Product Family Attributes .................................................................................... 10
Business Impact ................................................................................................. 10
Decision Support Matrix ...................................................................................... 11
Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 12
The Intersection between 360-Degree Research and Best Practices Awards ..................... 13
Research Methodology ........................................................................................ 13
About Frost & Sullivan .............................................................................................. 13
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Background and Company Performance
Industry Challenges
Oil and gas companies, as well as other companies from asset-intensive industries, tend to
carry hundreds of thousands of maintenance, repair, and operations (MRO) spares but still
up to 50% of unscheduled downtime in these industries can be attributed to a lack of
correct spare parts. This is due to spare parts being unavailable at the right time, the right
cost, or because of stock outs. This highlights the importance of having the right support,
the ability to respond quickly during plant downtime, and the ability to prevent unplanned
downtime. Supply chain, inventory, and materials managers have neither the time nor the
appropriate solutions available to them to effectively manage each necessary spare part.
Typically, managers try to order or reorder parts by setting a reordering level in their
enterprise resource planning (ERP) or enterprise asset management (EAM) systems or in
their homegrown systems. Spare parts are also sometimes managed through
spreadsheets or by the gut feeling of the managers and in some cases, they will order as
many as 10 spare parts for every system to ensure the plant stays up and running.
However, MRO is really about getting the maintenance, inventory, and supply chain
groups to work better together to make sure spare part service levels are maximized while
balancing cost and risk. ERP and EAM systems that are built around material resource
planning or other manufacturing processes are not sufficient to handle these MRO
problems and are only good at performing transactions and reporting. Existing systems
typically do not perform tasks such as prescriptive analytics, inventory forecasting, and
exceptions management.
For such circumstances (the use of ERP and EAM systems), companies that can provide an
asset performance management solution with advanced analytics to optimize MRO spares
and materials are expected to secure a leadership position in the market.
Product Family Attributes and Business Impact
Match to Needs
Oil and gas companies are always looking to cut costs, but they typically spend millions of
dollars on inventory that collects dust. In addition to the price of this inventory, this costs
them physical space to store this inventory in the warehouse. However, cutting these
inventory costs can increase the risks related to performance, downtime, and service
levels.
Ensuring responsiveness regarding the needs and profitability of oil and gas companies
despite their growing maturity and their service and supply chain complexity, Oniqua’s IQ
Optimization Suite is designed to overcome the industry’s prevailing challenges. The IQ
Optimization Suite effectively matches its capabilities to industry needs through a unique
combination of four main modules. These include MRO inventory optimization,
maintenance optimization, procurement optimization, and equipment optimization. The
Suite facilitates collaboration among key stakeholders (maintenance, materials
management, and procurement) and fosters a business environment that boosts overall
asset performance. In addition to having optimization modules for maintenance,
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inventory, and procurement, the IQ Optimization Suite has advanced analytics designed
specifically for complex MRO environments.
The IQ Optimization Suite extracts the existing master data and history from a customer's
ERP and EAM systems, then profiles and segments the data based on part usage,
criticality, lead time and other criteria to ensure that all MRO spares are not treated the
same way. Oniqua works closely with its customers, and one of the first things Oniqua
does during the deployment phase is that it figures out what the customer’s business
objectives are and customizes the software accordingly. Based on this, the segmented
data is run through Oniqua's analytics optimization process by applying business rules,
advanced statistical algorithms and economic models in order to produce
recommendations for spare part management decisions, all based on the thresholds set
during software customization.
The aforementioned approach makes Oniqua attractive to oil and gas companies because
the solution does not simply save costs by reducing inventory. What largely differentiates
the IQ Optimization Suite is that its advanced MRO-specific algorithms and analytics
capabilities balance both cost and risk. The analytics were built specifically to handle oil
and gas MRO issues such as the slow-moving nature of spares and the non-seasonality
component of spares. This solution accounts for both cost and risk and does not simply
perform a cost saving exercise. It balances the equation between cutting the costs to a
certain level while making sure that the performance, and service levels are not negatively
affected. The IQ Optimization Suite makes sure customers are still able to maintain high
service levels and not increase any unplanned downtime, even when it recommends
cutting the inventory by 20 percent.
As identified earlier, one of challenges of inventory and materials management is the
massive volumes of MRO spares involved in oil and gas companies. When setting a
minimum and maximum spare part level, there are too many variables that need to be
considered if managing a system manually—these include average value, size, lead times,
and how it affects planned and unplanned demand. All this information needs to be
considered for every spare part, and when there are over hundreds of thousands of spare
parts, this number is simply unmanageable.
These variables are not taken into account in competing solutions, such as traditional ERP
or EAM applications, because these lack the appropriate capabilities required to address
specific MRO challenges. The IQ Optimization Suite’s inventory optimization module,
however, takes into account all of these variables in order to determine what the min/max
levels should be. Additionally, the IQ Optimization Suite looks at the whole spectrum of a
customer’s required materials and spare parts that go into supporting the maintenance
and operations side of a business. This includes multi-million dollar spare parts that are
slow moving, might not be used at all, or might be used once every 3 or 4 years, and all
the way down to gloves and lubricants (low value, fast moving spare parts and materials).
Setting the min/max level is only one of the several capabilities of the Oniqua Suite, and
its actual strength lies in filling several gaps left over by competing solutions. These
capabilities include what-if analysis, criticality analysis, prescriptive analytics, multi-
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dimensional inventory forecasting algorithms, stock out cost modeling, dynamic inventory
segmentation, investment recovery and surplus management, and risk optimization.
In essence, Oniqua helps oil and gas companies and other asset-intensive companies
optimize MRO spares and materials management, resulting in reduced costs, greater
service levels, and increased efficiency.
Design
Keeping in mind the need to eliminate the difficulty associated with complex data
patterns/analysis, Oniqua has designed its solution with intuitive visualizations, drag and
drop functionality, what-if analysis, and optimization algorithms. These features make it
easier for users to analyze data and to derive actionable insights to identify trends and
growth opportunities. Therefore, its users do not have to be experts or programmers in
order to use the solution. Maintenance managers can now easily and quickly make
decisions and take effective actions to optimize maintenance spares and materials. The
ability to visualize MRO inventory levels, stock outs, and service levels using multiple data
views generates the insight required to reduce unplanned downtime and costly stock outs.
Leading-edge reporting and interactive dashboards are other innovative features and
functions that not only create an enriched user experience, but also provide the visibility
required to effectively manage inventory. The ability to quickly and easily build and
generate reports increases user efficiency and productivity.
Being technology agnostic, the solution is designed to work with all the major ERP
systems, EAM systems (SAP, Oracle, and IBM Maximo), and data warehouses to
synchronize data.
Additionally, the company offers both cloud and on-premise solution deployment. Its
customers can connect to the cloud and start using all of the optimization capabilities and
services quickly and reliably with low risk and a low cost of ownership of managing the
software, infrastructure, and resources. As a result, the majority of its customers currently
use the company’s cloud software as a service (SaaS) subscription model.
Product/Service Value
One of the primary factors that has contributed to the company’s success is that it offers a
comprehensive portfolio of Master Data Services and Opportunity Assessments. Oniqua’s
Professional Services team, with its MRO expertise and understanding of every aspect of
the customer’s business, also offers Rapid Value Services (i.e., one-time project-based
services). Its highly efficient resource pool (the Professional Services team) can identify a
customer’s specific MRO problems and immediately remedy them. When Oniqua performs
a Rapid Value Service or Opportunity Assessment, customers often see immediate savings
across their critical maintenance spares and materials inventories. Having seen value in
these Services and Assessments, customers usually become interested in the software for
an ongoing subscription.
Opportunity Assessments are typically done at the front end of the sales cycle, where
customers are interested in what Oniqua does but follow a ‘prove it to me’ approach. In
this case, Oniqua takes a slice of the customer data, runs it through Oniqua’s analytics,
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and provides a detailed report on what it is seeing across customer data and where the
greatest areas of opportunity lie. Providing customers with unique value propositions such
as Rapid Value Services and Opportunity Assessments clearly help Oniqua gain customers’
confidence and strengthens Oniqua’s potential to further expand its scope of services in
the coming years.
The company’s Professional Services also include software implementation, deployment,
functional consulting, technical consulting, project management, product training,
customer support, and customer mentoring.
Customer Acquisition
Oniqua acquires Tier I oil and gas companies as clients (usually above $2 billion in
revenues and $100’s of million in inventories) through a direct channel and acquires other
companies ($500 million to $2.0 billion in revenues and at least $10 million in inventory)
through business partners. The company works very closely with each customer’s
operations, inventory, supply chain, maintenance, reliability, and materials managers. The
significant configuration flexibility and scalability of the solution’s architecture has helped
Oniqua secure customers of all sizes, from small single site installations to large multi-site
installations of global enterprise clients.
Some of the leading oil and gas companies that have used Oniqua to reduce production
risks, improve operational and plant efficiencies, improve service levels, and optimize
maintenance and supply chain processes include BP, ExxonMobil, BHP Petroleum,
Occidental Petroleum Corporation, ConocoPhillips, TOTAL, Transocean, Phillips 66 and
ADMA-OPCO. ExxonMobil is currently one of Oniqua’s largest and fastest growing oil and
gas customers, having signed an agreement in December 2015 and is rolling the IQ
Optimization Suite out globally, two to three sites at a time. ConocoPhillips was able to
lower its inventory levels by 10 percent for three years in a row and reduced MRO working
capital by 10 percent at one of its sites in just six months. This resulted in ConocoPhillips
quickly saving $10 million. Due to its 99.0% customer retention rate over a rolling five-
year period and a robust, continuously expanding customer base of hundreds of
customers with thousands of users, Oniqua is expected to even further strengthen its
market position in the coming years.
Growth Potential
The Oniqua IQ Optimization Suite has been installed across more than 30 countries,
supported by offices in North America, South America, South Africa, Europe, and
Australia. Celebrating 26 successful years of MRO optimization, Oniqua manages billions of
dollars worth of inventory (critical spares and materials) and millions of unique stock
items. ASCO, a pioneer in oilfield support services such as oilfield logistics, transportation,
fueling, and maintenance specific to the oil and gas space, acquired Oniqua in 2012.
The Oniqua IQ Optimization Suite has not only been highly successful in promoting
product leadership in oil and gas, but has also drawn the attention of leaders from a range
of other industries, such as mining, petrochemicals, utilities, manufacturing, and
transportation. Oniqua has nine of the top 10 global mining companies as its customers,
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including BHP Billiton – one of Oniqua’s biggest and longest standing customers (over 20
years). BHP Billiton has a global license with Oniqua, where the IQ Optimization Suite is in
use in about 130 mining sites across the world. Other Oniqua customers include Newmont
Mining, Rio Tinto, Freeport McMoRan, AEP, Tennessee Valley Authority, Nebraska Public
Power District, Alcoa, ORICA, BlueScope Steel and many other marquee names.
Going forward, Oniqua’s product vision and strategy is strong for the foreseeable future.
In July 2017 Oniqua is going to introduce a major upgrade to its inventory optimization
module. In addition to this module upgrade, the company plans to enhance its other
modules, such as maintenance, equipment, and procurement. In its maintenance module
Oniqua will be adding more predictive capabilities, leveraging the use of Big Data.
Oniqua’s ability to work across a plethora of asset-intensive industries and its strong
product strategy are expected to boost Oniqua’s growth potential in the coming years.
Conclusion
Leveraging its expertise in developing technologically advanced asset performance
management solutions, Oniqua’s IQ Optimization Suite addresses industry complexities by
optimizing the management of critical maintenance spares and materials across the full
asset lifecycle. Oniqua has secured a competitive edge over its peers by providing a
solution with prescriptive analytics, multi-dimensional inventory forecasting algorithms,
and reporting capabilities that fill gaps in leading ERP and EAM systems. The advanced
MRO-specific analytics transforms data into actionable insights and helps asset-intensive
oil and gas companies balance costs and risks. Its customers have successfully reduced
costs, increased service levels, minimized unplanned downtime, and achieved greater
efficiencies across their operations. Designed as a cloud-based solution specifically for
complex, asset-intensive MRO environments, the flexible configuration, interactive
dashboards, advanced reporting, and intuitive visualizations clearly enhance the value
proposition to its customers. With its strong overall performance, Oniqua has earned Frost
& Sullivan’s 2017 Product Leadership Award.
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Significance of Product Leadership
Ultimately, growth in any organization depends upon customers purchasing from a
company and then making the decision to return time and again. A comprehensive
product line, filled with high-quality, value-driven options, is the key to building an
engaged customer base. To achieve and maintain product excellence, an organization
must strive to be best-in-class in three key areas: understanding demand, nurturing the
brand, and differentiating from the competition.
Understanding Product Leadership
Demand forecasting, branding, and differentiating all play a critical role in finding growth
opportunities for your product line. This three-fold focus, however, must be complemented
by an equally rigorous focus on pursuing those opportunities to a best-in-class standard.
Customer communications, customer feedback, pricing, and competitor actions must all be
managed and monitored for ongoing success. If an organization can successfully parlay
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product excellence into positive business impact, increased market share will inevitably
follow over time.
Key Benchmarking Criteria
For the Product Leadership Award, Frost & Sullivan analysts independently evaluated two
key factors—Product Family Attributes and Business Impact—according to the criteria
identified below.
Product Family Attributes
Criterion 1: Match to Needs
Criterion 2: Reliability and Quality
Criterion 3: Product/Service Value
Criterion 4: Positioning
Criterion 5: Design
Business Impact
Criterion 1: Financial Performance
Criterion 2: Customer Acquisition
Criterion 3: Operational Efficiency
Criterion 4: Growth Potential
Criterion 5: Human Capital
Best Practices Award Analysis for Oniqua
Decision Support Scorecard
To support its evaluation of best practices across multiple business performance
categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool
allows our research and consulting teams to objectively analyze performance, according to
the key benchmarking criteria listed in the previous section, and to assign ratings on that
basis. The tool follows a 10-point scale that allows for nuances in performance evaluation.
Ratings guidelines are illustrated below.
RATINGS GUIDELINES
The Decision Support Scorecard is organized by Product Family Attributes and Business
Impact (i.e., These are the overarching categories for all 10 benchmarking criteria; the
definitions for each criterion are provided beneath the scorecard.). The research team
confirms the veracity of this weighted scorecard through sensitivity analysis, which
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confirms that small changes to the ratings for a specific criterion do not lead to a
significant change in the overall relative rankings of the companies.
The results of this analysis are shown below. To remain unbiased and to protect the
interests of all organizations reviewed, we have chosen to refer to the other key
participants as Competitor 2 and Competitor 3.
Measurement of 1–10 (1 = poor; 10 = excellent)
Product Leadership
Product Family
Attributes
Business
Impact Average Rating
Oniqua 9.5 9.5 9.5
Competitor 2 8.0 8.0 8.0
Competitor 3 7.0 7.0 7.0
Product Family Attributes
Criterion 1: Match to Needs
Requirement: Customer needs directly influence and inspire the design and positioning of
the product family.
Criterion 2: Reliability and Quality
Requirement: Products consistently meet or exceed customer expectations for
performance and length of service.
Criterion 3: Product/Service Value
Requirement: Products or services offer the best value for the price, compared to similar
offerings in the market.
Criterion 4: Positioning
Requirement: Products or services address unique, unmet need that competitors cannot
easily replicate or replace.
Criterion 5: Design
Requirement: The product features an innovative design, enhancing both visual appeal
and ease of use.
Business Impact
Criterion 1: Financial Performance
Requirement: Overall financial performance is strong in terms of revenues, revenue
growth, operating margin, and other key financial metrics.
Criterion 2: Customer Acquisition
Requirement: Product strength enables acquisition of new customers, even as it enhances
retention of current customers.
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Criterion 3: Operational Efficiency
Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high
quality standard.
Criterion 4: Growth Potential
Requirements: Product quality strengthens brand, reinforces customer loyalty, and
enhances growth potential.
Criterion 5: Human Capital
Requirement: Company culture is characterized by a strong commitment to product
quality and customer impact, which in turn enhances employee morale and retention.
Decision Support Matrix
Once all companies have been evaluated according to the Decision Support Scorecard,
analysts then position the candidates on the matrix shown below, enabling them to
visualize which companies are truly breakthrough and which ones are not yet operating at
best-in-class levels.
High
Low
Low High
Bu
sin
ess I
mp
act
Product Family Attributes
Oniqua
Competitor 2
Competitor 3
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Best Practices Recognition: 10 Steps to Researching,
Identifying, and Recognizing Best Practices
Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and
assess their fit with select best practice criteria. The reputation and integrity of the
Awards are based on close adherence to this process.
STEP OBJECTIVE KEY ACTIVITIES OUTPUT
1 Monitor, target, and screen
Identify Award recipient candidates from around the globe
Conduct in-depth industry research
Identify emerging sectors
Scan multiple geographies
Pipeline of candidates who potentially meet all best-practice criteria
2 Perform 360-degree research
Perform comprehensive, 360-degree research on all candidates in the pipeline
Interview thought leaders and industry practitioners
Assess candidates’ fit with best-practice criteria
Rank all candidates
Matrix positioning of all candidates’ performance relative to one another
3
Invite thought leadership in best practices
Perform in-depth examination of all candidates
Confirm best-practice criteria Examine eligibility of all
candidates Identify any information gaps
Detailed profiles of all ranked candidates
4
Initiate research director review
Conduct an unbiased evaluation of all candidate profiles
Brainstorm ranking options Invite multiple perspectives
on candidates’ performance Update candidate profiles
Final prioritization of all eligible candidates and companion best-practice positioning paper
5
Assemble panel of industry experts
Present findings to an expert panel of industry thought leaders
Share findings Strengthen cases for
candidate eligibility Prioritize candidates
Refined list of prioritized Award candidates
6
Conduct global industry review
Build consensus on Award candidates’ eligibility
Hold global team meeting to review all candidates
Pressure-test fit with criteria Confirm inclusion of all
eligible candidates
Final list of eligible Award candidates, representing success stories worldwide
7 Perform quality check
Develop official Award consideration materials
Perform final performance benchmarking activities
Write nominations Perform quality review
High-quality, accurate, and creative presentation of nominees’ successes
8
Reconnect with panel of industry experts
Finalize the selection of the best-practice Award recipient
Review analysis with panel Build consensus Select recipient
Decision on which company performs best against all best-practice criteria
9 Communicate recognition
Inform Award recipient of Award recognition
Present Award to the CEO Inspire the organization for
continued success Celebrate the recipient’s
performance
Announcement of Award and plan for how recipient can use the Award to enhance the brand
10 Take strategic action
Upon licensing, company is able to share Award news with stakeholders and customers
Coordinate media outreach Design a marketing plan Assess Award’s role in future
strategic planning
Widespread awareness of recipient’s Award status among investors, media personnel, and employees
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The Intersection between 360-Degree Research and Best
Practices Awards
Research Methodology
Frost & Sullivan’s 360-degree research
methodology represents the analytical
rigor of our research process. It offers a
360-degree-view of industry challenges,
trends, and issues by integrating all 7 of
Frost & Sullivan's research methodologies.
Too often companies make important
growth decisions based on a narrow
understanding of their environment,
leading to errors of both omission and
commission. Successful growth strategies
are founded on a thorough understanding
of market, technical, economic, financial,
customer, best practices, and
demographic analyses. The integration of
these research disciplines into the 360-
degree research methodology provides an
evaluation platform for benchmarking
industry participants and for identifying
those performing at best-in-class levels.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth
and achieve best-in-class positions in growth, innovation and leadership. The company's
Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined
research and best practice models to drive the generation, evaluation, and implementation
of powerful growth strategies. Frost & Sullivan leverages more than 50 years of
experience in partnering with Global 1000 companies, emerging businesses, and the
investment community from 45 offices on six continents. To join our Growth Partnership,
please visit http://www.frost.com.
360-DEGREE RESEARCH: SEEING ORDER IN
THE CHAOS
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