Deloitte Uk The Capital Project of The Futurev4
Deloitte Uk The Capital Project of The Futurev4
Deloitte Uk The Capital Project of The Futurev4
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.
01
Digital Capital Projects | The capital project of the future
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.
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
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:
Figure 3:
During construction, workers 4
equipped with exoskeletons, drones
and mobile solutions are supervised
off-site through augmented reality
technology.
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.
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.
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
• 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.
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:
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.
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
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.
Figure 5:
Decommissioning risks are mitigated
through use of robots and
autonomous vehicles, with hazardous 3 5
areas restricted through workers’
RFID wearables.
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.
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
Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"). DTTL and each of its
member firms are legally separate and independent entities. DTTL and Deloitte NWE LLP do not
provide services to clients. Please see www.deloitte.com/about to learn more about our global
network of member firms.