How Digital Transformation in Engineering and Design boosts Project Profitability

Posted: October 16, 2018

Oil and Gas

How Digital Transformation in Engineering and Design boosts Project Profitability

In the past few years, low oil prices had sanctioned almost every large Exploration and Production (E&P) projects in the oil and gas industry. Today, with the recent recovery of oil prices, most oil and gas companies are starting to see light at the end of the tunnel and preparing to ramp up their investments to either maintain or grow output. Yet, despite the increasing investment in E&P projects, companies are facing tougher contracting and more intense global competition. According to a EY report, 64% of the capital projects had cost overruns while 73% of the mega projects experienced schedule overruns. Any slight delay or budget overrun in a project can easily turn profit into loss. To improve performance and reduce risk of cost and schedule overruns, companies must leverage effective project management tools and best practices at the outset of a project to improve productivity and reduce uncertainty.

Can you get design “right first time” at the outset of a project?

Getting design “right first time” is simply unrealistic and not achievable in most cases as this ideology does not have the flexibility needed to cope with client, legal, contractor and environmental changes which influence scope changes throughout the project.  Evolutionary design requires the design process to be adaptable to change, and allowed to cycle through alternatives as quickly as possible until its most ideal form is achieved. For instance, a single change in temperature value of a design will propagate changes in critical requirements from Engineering and Design to Procurement, and to Construction, often leading to delays, rework and cost overruns.  With a long list of design influencing factors and still counting, is it possible for a design which is ‘right first time’ to stay indifferent to these influences throughout the project lifecycle? 

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Efficient Management of the Design Spiral is key to Project Performance

Improving project performance lies in the ability to effectively manage the design spiral to reduce iterations and enable better communications between designers and constructors. This requires a collaborative digital environment that enables all the engineering and design disciplines to respond to multi-discipline changes in an ordered and organised manner. As design information is created, it needs to be shared across other design disciplines and across contractual boundaries to make sure that the project progresses to schedule. This process is not a linear sequence by nature; design information is passed to the next team while progressing to the final constructed form. Any construction reworks due to bad quality of deliverable from Engineering and Design phases can result in huge overspend in a capital project, impacting the bottom line.


Digital transformation of Engineering and Design Processes

Today, advancements in technology – cloud platform, analytics and computing power – are revolutionising how companies transform their Engineering and Design processes to improve project execution.  As change management is critical to managing the overall design spiral, the technology must provide the multi-disciplinary teams with the ability to control and communicate change while enabling each discipline to respond to changes in a prioritised and well-controlled manner. This is in marked contrast to the common situation where each discipline is continually distracted by the constant blizzard of changes generated by others, to the detriment of its own efficiency.

With improved collaboration and efficient management of change, companies can effectively reduce the number of iterative steps in the ‘design spiral’ and compress the time needed to reach the final, optimized design in a project. It empowers companies to:

  • Reduce Project Cost and Schedule
  • Improve Engineering Efficiency with fewer design iterations
  • Reduce Project Risks with clear visibility of progress against plan
  • High ROI with significant reduction in Total Installed Cost by up to 10%


Are you ready to digitalise your Engineering and Design processes to boost Project Profitability?

Join our ‘Digital Transformation of Engineering & Design in Oil and Gas’ webinar on Dec 4th at 3 PM London / 10 AM New York. In this webinar, Henrik and Brian will outline the importance of an integrated platform to streamline project execution from design to construction and handover, highlight customer use cases - FPSO, Gas processing plants and others- and demonstrate how the digital platform improves collaboration and reduces wastes and reworks, enabling companies to deliver their projects on time and schedule in this competitive environment, boosting project profitability.  

Register now!


Written By
Eddy Lek

Eddy Lek is the Global Industry Marketing, Senior Manager for Energy. He is responsible for leading industry marketing campaigns in Oil and Gas. With over 15 years of experience in varying roles from sales to product management and marketing, he is a strong advocate for leveraging technology to improve efficiency and reduce waste. He has a MBA from National University of Singapore and an B.Eng from Nanyang Technological University.

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