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Digital Capital Projects

The capital project of


the future
Capital project insights
Contents
Executive summary 01
Where is the industry now? 02
What’s the value of digital? 04
Transforming to a digital capital project 06
How can we help? 11

Capital Project Insights is a series of papers bringing together the latest thinking from
members of our team on optimising performance and value across the lifecycle of
capital projects.
Digital Capital Projects | The capital project of the future

Executive summary
A digital capital project is more than simply the use of
technology in delivering a project. It represents a
fundamental shift in how a project is designed,
constructed, operated and decommissioned.
Digital transformation provides an opportunity to gain safety, • A digital mindset that permeates teams, culture and
efficiency, and significant financial benefits. However, unless working practices within capital projects, and
strategically planned, the investment in digital can be costly, understands fully how technology can realise the value
time and resource intensive, with benefits only attained behind the digital opportunity.
several years down the line.
What is a digital capital project?
Projects need a digital strategy and data foundation to The digital capital project has data at its heart, as an integral
succeed, this considers an organisation’s current digital and crucial part of managing successful delivery. Technology
maturity and provides an achievable roadmap to adopt and is used to capture, store, analyse, display and use this data
sustain key technologies such as a digital twin. Digital allowing project teams to make faster and better decisions.
technologies should be selected to add value throughout the
journey and build on previous successful initiatives. It is just For project owners willing to invest, future digital capital
as important to develop the team’s digital skills as it is to roll projects will be designed and built to be safer and more
out new technology. efficient. Importantly, digital initiatives can influence each
stage of the project lifecycle.
Deloitte has extensive experience of digital transformation.
While the journey can be complex, we know that a successful Why now is the right time?
outcome can be characterised very clearly and simply: The industry is always looking to reduce design, construction,
and handover costs and scope risk. Current technology now
• A data-driven approach that runs through everything and makes data collection, analysis and interaction more
everyone in the project. powerful and intuitive than ever before, bringing benefits
• An innovation process that tests the value and from early phase design through to de-commissioning. These
opportunities of technology in an ongoing and agile way, benefits can outweigh the costs, as long as investment is
backed by a sustainable strategy that recognises the approached early, consistently and strategically. If you invest
evolving nature of technology. late, you get left behind.

Four challenges to digital transformation People and buy-in:


• Siloed teams with differing views on requirements
• A lack of internal skills and reliance on external
Finding funding: resources
• A lack of a clear • No clear sponsorship to drive investment
commercial or
procurement Selecting the answer:
approach to • No overall strategy to support choice
technology of applications, infrastructure and
• Building the case for tools. (A ‘project-by-project’ mindset)
R&D and intangible • Solutionising before focusing on user
benefits needs and requirements
• Underestimating • Understanding the complex web of
operational and solutions and suppliers on the market
support costs • Not thinking about investment from a
• Finding and portfolio, programme and project
leveraging existing perspective
innovation funding Delivering the change:
channels • Inappropriate internal governance to support technology development
• Effectively engaging • Taking a waterfall, rather than true agile approach
the supply chain to • Tactical implementation that limits wider transformation
share the innovation • A lack of a business change approach that looks at the impact of digital
cost across the operating model – i.e. people, processes and systems.

01
Digital Capital Projects | The capital project of the future

Where is the industry now?


Digital initiatives seldom deliver and sustain the value
anticipated, or achieve their full potential. We've
observed many reasons why this happens in capital
projects.
The capital projects industry has traditionally prioritised Figure 1:
VALUE
investment in conventional tools, techniques and process Construction and
DELIVERED
mining lag furthest
changes, as familiar ways to improve delivery on time and Aerospace behind regarding
digital maturity.
budget. Technological change can seem more uncertain, and Nuclear However, all these
digital initiatives have been less ambitious as a result. Infrastructure
sectors are
significantly behind
Oil and gas other industries such
While digital maturity varies from sector-to-sector, the whole as technology, media,
Mining finance.
industry lags behind other sectors, such as media, retail and
finance. However, those organisations that have invested Construction

wisely are seeing significant benefits. EMERGING ESTABLISHED


Source: Deloitte

For example, Rio Tinto’s[1]Pilbara mine uses a fleet of Projects are still not delivering a fully digital operation.
autonomous trucks to haul ore, which improves safety, Typically, they’re delivering a traditional asset with some
productivity and cost, as one remote operator can supervise digital functionality, and this fails to realise the full potential of
multiple trucks running 24 hours a day. the technology. In other cases, digital ‘quick fixes’ may be too
limited in scope to deliver meaningful improvements.
For the majority of the industry, digital investment has
typically been ad hoc. Initiatives have simply emulated that Central teams still focus on impressive-sounding ‘headline’
done elsewhere, or used what seemed most convenient or initiatives, but the advanced technology is often not mature
readily-available. Historically, project teams have tended to enough, and as a result, fails to solve key business problems
work in silos, adopting piecemeal and unconnected and delivers no immediate value to projects. This can
technologies that fail to serve the full project lifecycle. Such discredit further initiatives, limit budgets and stall new digital
thinking and practices have led to inconsistent data and ideas.
information management within and between projects,
leaving capital projects organisations unable to develop and The scale and complexity of the digital landscape makes it
mature their digital capabilities in the longer term. hard to determine the most appropriate solution, with
multiple providers, manufacturers and consultants each
Project teams, owner organisations, and the supply chain are pushing different solutions. The right approach requires a fit-
coming to the overwhelming realisation that their traditional for-purpose, organisation-specific digital vision and strategy
approach to technology investments are not yielding the that allows cohesive piloting and appraisal, investment,
benefits they’d hoped for. planning and implementation.

02 [1] Rio Tinto


Digital Capital Projects | The capital project of the future

1
4

Figure 2:
Collaborative engineering
design work is facilitated
though an immersive design
environment, with data readily
available from vendors and
previous projects, in a cloud
hosted platform.

Example technology1: digital through the lifecycle – Phase 1: design, financing & procurement

1 Drones 3 Intelligent design search


Surveillance, inspection and topographical surveys are Organisations have access to huge amounts of
just some of the applications for drones in the field. For information from previous projects – engineering
example – a drone can provide live visual support to a designs, inventory lists, technical standards, historic
design or construction team, with off-site teams viewing costs, trends and project plans. Artificial intelligence can
footage and relaying feedback, or the construction provide real time support in the design process by
team viewing drone visuals through augmented reality analysing and processing vast amounts of data to
wearables. provide insights and comparisons with previous
projects.
2
Collaborative design
4 Blockchain (digital ledger)
The advance of 3/4/5D modelling and visualisation
technologies supported by cloud hosted data enables a Blockchain has an application as a secure transaction
highly collaborative design process, with multiple and record platform – a digital ledger. Throughout a
engineers working on the same design in real time. Live project, the complex network of interactions between
manipulation of the design is possible, and Virtual the project owner, contractors, suppliers and other
Reality (VR)/Augmented Reality (AR) can be utilised to stakeholders necessitates an environment where digital
provide a fully immersive design experience and information (e.g. financial transactions, equipment
capability. history, inventory) is securely managed.

1. Some of the technologies listed will be applicable in other lifecycle phases. 03


Digital Capital Projects | The capital project of the future

What’s the value of digital?


Digital – when integrated and used effectively – has the
potential to add value throughout a project’s lifecycle.
Those who invest with a ‘data from day one’ approach
can realise significant benefits.

Cost benefits come from targeting the fragmented supply Digital can reduce risk and enhance risk assessment in
chain, and minimising intermediary costs. Capabilities are delivery and operation. Central capabilities include
needed in the provision of collaboration tools; programme cybersecurity strategy; big data analytics and modelling
controls governance and standards; and general technology capability risk-based project controls; data quality and
competency. As a result, benefits can be seen in: governance. Risk value benefits include:

• CAPEX savings on construction, design and delivery • Lower risk and cost contingency.
• OPEX savings through Enterprise Asset Management • Better, repeatable designs, improved design assurance,
(EAM) technology. compliance and integrity management.
• OPEX savings due to automated business processes. • CAPEX and OPEX savings through risk-based and
predictive maintenance.
Time benefits arise from improving design, capital delivery • Insights into efficient spending: analytics help reduce the
and operational efficiency. These follow directly from the risk of expenditure in the wrong areas, by using historic
‘data from day one’ approach and visualisation capabilities, data to predict future outcomes.
giving value such as:
Health and safety benefits are typically focused on
• Time saved by reusing designs, rather than recreating minimising human intervention in hazardous areas, as well as
them or searching for information. having appropriate tools to capture, manage and mitigate
• Reduced time to review and approve submissions, by incidents through awareness and training. This requires
using automated workflows. capabilities in data analytics; defined processes and
• Efficient and better-informed business decisions through standards; and data quality and governance. The value can
clearer visualisation. be seen in:
• Use of technology such as robotics to reduce or replace
manual design, construction or operations tasks. • More efficient and real-time safety information.
• Reduced near misses and safety incidents.
• Easier warnings and safety contingency planning
capability.
• A healthier, happier and more productive workforce.

Building a truly digital capital project means much more than adopting ad hoc technologies into an existing
project delivery framework.
By starting with a solid digital foundation, built around data, subsequent investment in technology can be much more
effective. The earlier that initial investment is made, the more that digital can add value[2] throughout the lifecycle. For
instance:

Design, financing Construction Operations and asset Decommissioning


and procurement 5–10 per cent management 5-10 per cent
10–30 per cent reduction in build 10–20 per cent reduction in
reduction in costs. reduction in operating decommissioning
engineering hours. costs. hours.

04 [2] Deloitte cross-industry analysis


Digital Capital Projects | The capital project of the future

Figure 3:
During construction, workers 4
equipped with exoskeletons, drones
and mobile solutions are supervised
off-site through augmented reality
technology.

Example technology2: digital through the lifecycle – Phase 2: construction

1 Exoskeletons 3 Augmented Reality


Although in its infancy, exoskeletons augment the AR technology provides a virtual overlay of information
human body to provide the ability to avoid repetitive onto a real-world view. Construction workers equipped
strain injuries, and add additional strength and with AR headsets can view design schematics during
dexterity. on-site activities. Integration of wearables with live
video-feed and sound allows offsite personnel to ‘view
what the worker is viewing’ – one technical specialist
2 Modular design & construction can provide live oversight and support to a team of on-
site workers.
Modular construction (closely linked to pre-fabrication)
allows construction assemblies to be built more
efficiently than ever before. Through the use of a
standardised design inventory, and a set number of
4 Mobile/tablet solutions
commonly used components, complex assemblies can Mobile/tablet solutions are already being used in many
be built by robots with minimal human interaction. 3-D construction projects, providing worksite personnel
printing can often be used in parallel to manufacture with easy access to designs and work instructions, as
elements of the design with greatly reduced lead times. well as being able to submit project data (e.g.
Ideally, the construction process can occur off-site in a health/safety audits, progress data and images).
controlled and hazard free environment, limiting on-site
activities to installation and commissioning.
5 BIM (Building Information Modelling)
Advanced 3D models through BIM can be used to
understand the impact of design changes and inform
sequencing of tasks. This also includes capture of
operational asset data throughout the design and
construction stages.

2. Some of the technologies listed will be applicable in other lifecycle phases. 05


Digital Capital Projects | The capital project of the future

Transforming to a digital
capital project
The journey to digital maturity must be planned
properly. A holistic approach that encompasses the
digital workforce, current and future maturities, along
with targeted business outcomes is required.
Capital project organisations need a digital strategy and For example, Google applied machine learning to data collected
vision to realise and gain early value from digital, by having by thousands of sensors to reduce the energy consumption of its
tangible ambitions and timelines. This work needs to be split data centre cooling systems by up to 40 per cent. After a
into distinct stages that progress the organisation from a successful pilot, where the algorithm made recommendations for
traditional approach through to a digital capital project that human operators to implement, today it is in direct control of the
can routinely adopt the latest technology. This ensures the system.
strategy can deliver on project needs, as well the enterprise’s
broader digital vision. Alongside technology, organisations must build a digital team,
equipping their staff with the requisite digital skill sets to use
Each stage should focus on the consistent adoption of the data the organisation is generating. The more familiar
specific technologies across project portfolios. There must be people are with digital ways of working, the more effectively
an investment plan, project sponsors, and clearly-defined they can test and adopt new technology. In technology firms,
outcomes, combined with a benefits realisation plan. Digital for example, the pace of innovation shows how agile a truly
solutions can then be designed and piloted in an agile mature digital operation can be. Project teams must be
manner. When benefits are proven, those solutions can then equipped to use the initiatives in each stage, and able to see
be scaled across the organisation. tangible benefits from them. Initiatives are likely to fail
through lack of support if the benefits aren’t both realised
The scope and pace of each stage must be driven by a and felt to be useful.
realistic view of the organisation’s current digital capability,
not just by considering its future aspirations. Each stage Technology will change, and what is new now will soon be
should deliver technology with the largest return given outdated, so a sustainable innovation process is the most
current maturity. important investment for ongoing digital uptake. The
approach of creating a proof of concept (POC) means that
Once technology from one stage is operating, it can prove its failing or outdated initiatives can easily be stopped, and
value to the business, embed new ways of working and decision-makers can avoid falling foul to the ‘sunk cost
provide the basis for building the next stage. Outputs from fallacy’.
one stage should enable the technologies in the next.

The digital journey:

Digital Diagnostic Digital strategy Investment planning

Assess existing digital capability, Define a vision and strategy for a Create an investment plan
level of maturity and identify coherent approach to realise and considering benefits against a
appropriate solutions to meet the accelerate value through digital with robust evaluation model.
digital strategy. tangible ambitions and timelines.

Operate & optimise Deliver Design

Run capital projects with enhanced Deliver digital solutions in an Based on the investment plan,
digital capability, review against agile manner, supported by design digital solutions for future
strategy and continue to evolve. technology capability. delivery.

06
Digital Capital Projects | The capital project of the future

Data is the foundation


Building a data foundation (with a governance framework, tools, process and capabilities) is critical to the digital capital project.
This can progress from simply making data available in a single database through to an advanced digital twin. New trends in
digital and technology should be considered, but only if they ultimately contribute to building the maturity of the data landscape.

• Most ‘physical’ digital initiatives (e.g. sensors, drones, AR/VR) are about interfacing with this data.
• Suppliers and partners must also be integrated into this ecosystem.
• Even physical technologies such as robotics are reliant on data, and most current applications relate to collecting data more
safely and efficiently.

Build a digital twin


A digital twin combines many different technologies (e.g. modelling, sensors, analytics and 3D visualisation) to create a ‘live’
digital replica of a physical asset in operation. Both are dynamically connected, so the digital twin provides ongoing
visualisation and analysis of the asset’s performance. It is a solution that unlocks significant value from design, through
construction and into operations.

We take a staged approach to building digital twin capability, to ensure that each stage provides business benefits in itself,
while serving as a solid foundation for the next:

• Be ready to adopt new technologies in augmented reality;


robotics for remote operations; AI-driven plant diagnostics 4. Emerging
and operational enhancement; AI-driven plant design. technology

• Complete full digital twin.


• Have integrated digital team (including data scientists).
• Link data and operations, so most decisions are driven by
data, using predictive and reliability-centred maintenance.
• Advanced physical tools are in use, such as workforce 3. Fully
monitoring, smart hard hats, drones and laser mapping. digital

• Build an interactive 3D visualisation of the asset used for


construction and operations.
• Designate digital roles and responsibilities.
• Make all operational data easily accessible.
• Implement data-based maintenance tools, and physical tools,
like tablets, so teams can interface with data. 2. Improvement

• Digitise project data to a single platform, where it can be


searched easily and contextually.
• Install networked sensors, along with wireless connectivity
throughout the facility.
• Empower people to adopt a digital mind-set.
1. Foundation

To embed any digital initiative effectively (not just digital twin), projects should fully complete each stage before progressing to
the next. We find companies are often looking at Stage 3 initiatives while still struggling to implement a single data platform.
This means that benefits aren’t realised, digital loses credibility and therefore becomes harder to adopt.

07
Digital Capital Projects | The capital project of the future

Develop a digital mindset and capability The operations data should keep its active link with assets as
Digital maturity isn’t just about technologies and data. It’s also they are upgraded or renewed to ensure ongoing digital
about ways of thinking and working, so the capability must twinning.
permeate the project’s people and suppliers through a
fundamental shift in how they value data. For example Microsoft’s HoloLens 2 allows an engineer in an
office to see what a remote worker is viewing and then highlight
Projects should have a digital lead who is accountable for areas of interest for them using augmented reality.
meeting digital objectives. This should be a dedicated role,
filled by someone with relevant experience, not a secondary Quality assurance processes must include digital data, and
responsibility for an engineer or traditional project manager. give data quality comparable status to other design
parameters.
The project’s people must be trained to use digital systems to
gain greatest benefit from them. In particular, they should Supply chain contracts and deliverables must meet digital
learn how to ask questions of data and draw on the expertise standards at the procurement phase. There can be
of data professionals. Skilled technology professionals should significant value in making operator performance data and
also be available to support project teams as they develop past designs available to suppliers and technology firms (e.g
for tasks such as building interactive dashboards, or through the PAS 1192 framework), allowing new applications
providing monitoring and training for using tools and data. and collaborations to be explored and encouraged. For
example, as-built information should be stored in indexed
Operations and maintenance should be designed from the open source file formats which have greater future value
ground up with data in mind, including training engineers than scans of wet signed drawings.
and operators, so that decisions are based on data, and can
change dynamically as parameters change.

Critical success factors


Based on our experience, we have identified four key factors that are critical for successful digital transformation.

Develop your digital roadmap: this is the foundation for digital transformation. The design must consider
current digital capability, investment environment and key issues that could be addressed by digital. The roadmap
depends on the project or organisation’s lifecycle phase, and will evolve as these progress. Transformational
leadership is needed to set the direction for and drive the organisation’s digital journey.

Ready your digital workforce: digital capability is not simply about technology, systems and data. Successful
transformation comes from people, culture and behaviours, so preparing for the ‘future of work’ is essential.
Today’s digital natives will be the people delivering projects in the medium and long term, and they will expect a
digitally mature working environment. The future workforce will demand agility, efficiency and the facility to use the
vast amounts of project data available.

Invest at the right time, for the right reasons: develop a strong business case and clear sponsorship for the
digital journey. The ability to introduce digital to the heart of the organisation may be affected by the current data
and information landscape, level of design standardisation, risk appetite, and organisational culture, so all these
areas should be considered. A holistic business case and clear vision can make the difference between an
investment being a success or a failure.

Embrace the digital operating model: digitally transforming a capital project is a major undertaking. Such scale
and complexity requires careful considered assessment, design and implementation; bringing the team along on
the journey is a must. It’s essential to consider and understand all the strategy, capability, organisation, process,
systems and data elements.

08
Digital Capital Projects | The capital project of the future

4
Figure 4:
A network of sensors capture data from the
operating asset, with background AI analysing the
digital twin to generate predictive maintenance
regimes.

Example technology3: digital through the lifecycle – Phase 3: operations and asset management

1 Robotic Process Automation (RPA) 3 Internet of Things (IoT)


Technicians are supported by computer software which The introduction of sensors and internet connectivity to
enables the automated processing of transactions, data new applications enables complex equipment and
manipulation, and communication with other systems. networks to provide live feedback on various operating
Companies are able to spend less time on parameters. The vast amounts of data being fed back is
administrative tasks and more time supporting value- supported by analytics capability to analyse, process
adding tasks. Back-office functions can also benefit and provide insights based on the data. Operating
from RPA, enabling an organisation to be more efficient. patterns and malfunctions can be identified and
proactively addressed.

2 Digital twin
The digital twin is a complete digital replica of an
4 Predictive maintenance
existing asset - created through the combination of 3D Equipment and network connectivity supported by
visualisation, analytics and sensors (IoT). Sensors Artificial Intelligence enables maintenance regimes to
attached to the operating asset provide real-time data, be more effective and proactively designed. Significant
with analytics capabilities giving insights from other reductions in equipment down-time can be achieved
similar assets. Predictive maintenance regimes can be when a network is managed in this way, with data and
established, as well as the digital twin feeding the design information at the heart of the maintenance process.
for new assets.

3. Some of the technologies listed will be applicable in other lifecycle phases. 09


Digital Capital Projects | The capital project of the future

Figure 5:
Decommissioning risks are mitigated
through use of robots and
autonomous vehicles, with hazardous 3 5
areas restricted through workers’
RFID wearables.

Example technology4: digital through the lifecycle – Phase 4: decommissioning

1 Robotics 4 RFID identification


The application of robotics across asset management RFID (Radio Frequency Identification Technology) uses
and decommissioning significantly reduces hazards on- electromagnetic fields to identify and track proximity of
site. As well as being able to enter environments unfit objects. It has various applications – for example,
for humans, multiple types of data collection are workers can be alerted when entering restricted areas
possible during operations. controlled by an RFID sensor – called geofencing. The
restriction of various areas of a site can be remotely
controlled, minimising the need for physical barriers.
2 Wearables
Wearables have a wide ranging number of applications,
including monitoring of remote workers and external
5 Environmental modelling
environmental factors (such as radiation and gas Following decommissioning of engineering facilities, it is
concentrations in enclosed spaces). important to understand how quickly the natural
environment will regenerate. Advanced modelling and
impact assessment software is supported by GIS to
3 Autonomous vehicles provide project owners with long term project impacts.
(Geographical Information Systems – systems designed
Autonomous vehicles combine sensors and software to to capture, store and analyse spatial and geographic
allow driverless carrying capabilities. In applications with data).
fixed-routing (e.g. transportation of goods in a
warehouse, or mining trucks ferrying waste tailings
along a predefined route) these solutions are in place.
The driverless car revolution, combined with advances
in battery technology, has the potential to transform
the construction site into a safer, and more
environmentally friendly place, with reduced demand
on the workforce.

10 4. Some of the technologies listed will be applicable in other lifecycle phases.


Digital Capital Projects | The capital project of the future

How we can help


Our three-phase transformation process supports you
on your journey to a holistic, digital way of working,
while our experience, tools and partnerships are
available to help us help you with that process.

1: Imagine. We work with you to identify where you want to 2: Deliver. Our business and technology experience helps you
be, where you are now, and a plan for the journey. put the plan into action.

• Digital diagnostic: assess your existing digital capability • Design: based on the investment plan, design and pilot
and identify the issues that could be addressed by digital solutions for future delivery.
initiatives. • Deliver: implement digital solutions, supported by analytic
• Digital strategy: define your vision and strategy to inform capability to maximise investment value.
a coherent approach which can realise and accelerate
value through digital, measured against tangible We offer a Centre of Excellence (CoE) for construction
ambitions and timelines. analytics; draw on extensive experience in transition and
• Investment planning: create an investment plan readiness planning; provide agile delivery for new capabilities
considering economic drivers against a robust evaluation and staff empowerment; and have an Insight Driven
model. Organisation (IDO) offering that builds analytics into your
ongoing decision-making and improvement.
Deloitte’s Venture Path approach can help you innovate
faster and cheaper; our extensive thought leadership in 3: Run. We’ll stay with you once your projects are up and
engineering and construction helps us solve your business running, to keep them performing.
and technology problems; while our investment appraisal
and benefits modelling toolkit can help you assess and • Operate: run the capital project with enhanced digital
decide between your investment options. capability, review against strategy and continue to evolve.
• Optimise: enhance your digital solutions to better suit
your operations as they adapt.

Deloitte has strong partnerships for delivering simulated


reality and 3D digital twin models. We can help you visualise
and interact with data to give clear insights to project teams,
management and executives.

Get in touch with one of our capital projects leaders

Hani Girgis Marc O’Connor Guri Neote


Partner Partner Director
Global Digital Capital Energy, Resources & Digital Capital
Projects Lead Industrials Lead Projects
hgirgis@deloitte.co.uk maoconnor@deloitte.co.uk gneote@deloitte.co.uk

11
Digital Capital Projects | The capital project of the future

Notes

12
Authors: Guri Neote, Sarah Crawford, Louise Suen, Ed Lambourn, David Sammons, Alex Gaastra, Nicola Mason, Rich Hallahan, Seth Scafe-Smith, Mufadzi Shava
This publication has been written in general terms and we recommend that you obtain
professional advice before acting or refraining from action on any of the contents of this
publication. Deloitte LLP accepts no liability for any loss occasioned to any person acting or
refraining from action as a result of any material in this publication.

Deloitte LLP is a limited liability partnership registered in England and Wales with registered
number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United
Kingdom.

Deloitte LLP is the United Kingdom affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche
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© 2019 Deloitte LLP. All rights reserved.

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