The bubble has burst, the .COM hype is over, or is it? With many riches turned to ruins, and dream shattered, we will have to wait and see who remains afloat after the dust has settled and reality for many starts to sink in. Despite all the chaos, the .COM hype has undoubtedly accelerated web technology and proved its feasibility on many grounds. As the future horizon leans forward, the Internet technology is offering new steps for change.
In parallel, Oil and Gas projects are flourishing like never before as the demand for fossil fuel continues to grow. Yet these projects don't come cheap, and many rely heavily on professional engineering firms. Most firms depend on skilled engineers along with highly specialized tools to produce engineering packages, many of which exist to aid in optimizing engineering processes.
A new concept I call Web Based Engineering, E-Engineering or simply E-Consultancy is a web-based concept, catering to the specific needs and requirements of the design and construction practices within our industry. In some cases, it can provide rapid solutions to operations and maintenance entities in owner/operator companies. By serving as a hub for standard engineering solutions as well as providing professional consulting services, E-Consultancy has the potential to provide accurate and efficient solutions to engineering firms, giving them a time and cost-effective edge.
The sites' main features are embedded multidiscipline applications for either standard engineering design practices.
These applications are template interactive calculation pages where the user would input his design parameters and have instant answers generated and streamlined across the office workspace. The templates are collections of design calculations each focusing on a specific problem ranging from the routine and repetitive to detailed and complex project-specific approaches.
The technical aspects of the site are compiled and managed by senior engineers, in conjunction with programmers, database administrators and site administrators, the programs are assembled and hosted to participating clients with links to vendor information and websites. Refining the aesthetics of the output to reflect specific needs of firms such as logos and letterheads streamlines the firm's process. Added literature, internal safety factors or any other specifics are handled and incorporated into the application accordingly.
Consultants from within a respective field can work remotely after an application is in place. Their services would always be required, at a minimum to make known to the website administrators any updates in standards or to develops in that respective area of engineering.
The online application would provide numerical results, the design approach and assumptions used in the program, generating full reports and results, streamlining signatory processes and approvals, and in essence providing a self contained engineering service. The site would also serve as an archive for all the previous design case studies encountered and implemented in the oil and gas industry as the database grows.
This paper discusses how this site can be created, utilized and we will display the potential cost savings in using these sites to delegate engineering projects, tasks or calculations to our service. In addition it will display examples of real problems and solutions.
Background: Engineering as a History
Engineering, is the profession in which a knowledge of the mathematical and natural sciences, gained by study, experience, and practice, is applied to the efficient use of materials and the forces of nature. The term engineer properly means a person who has received professional training in pure and applied science. Among various recent trends in the engineering profession, are licensing and computerization. Computers are increasingly used for solving complex problems in addition to processing, storing, and generating data, however they do have their limitations.
The Internet and Engineering
The Internet has spawned endless new companies and opened venues previously unimaginable, it has provided technical papers, products and references to all disciplines of engineering. Many tools have become available to assist the engineer in solving common problems, however, for the most part these tools have been means to compare manual or computer generated results with someone else's product. With disclaimers and “no liability” clauses appended to them, these ad-hoc applications have never been taken seriously. In addition, engineering standards change regularly rendering most downloadable applications obsolete. However, the Internet provides a means to reference up-to-date standards and applications residing on central servers. Moving from a static to a dynamic paradigm.
The Oil and Gas Industry
The oil and gas industry has provided the world with one of its cheapest means of fuel and power. It provides the substance that drives the world as we see it. The industry itself is fueled by the prospect of generating massive revenues, which has made it an enticing industry to work in and around. Indeed, many spin-off industries have emerged from oil and gas, hoping to nibble bits and pieces from the large economy oil and gas has generated. Engineering is one such industry.
The Industry and Engineering
One field that relies heavily on the tools of engineering and engineers in general is the oil and gas industry. With many nations' economy based on the vast reservoirs of subterranean oil or gas, governments and private companies have protected their investments by setting up standards and boards to oversee engineering practices in this lucrative industry. Although the costs of engineering may vary they have always commanded high fees. Shutdowns of facilities mean losses in revenue, so proper engineering justifies its cost by reducing these shutdowns, failure to do so opens the door to losses in revenue, and compromise safety.
Billions of dollars are spent annually to engineering firms in the energy sector to secure national wealth and investments, in turn engineering firms compete to attain an advantage among other firms to provide integral engineering services, assuring their survival in their industry.
Many engineering firms have collaborated and formed mergers to be able to maintain multidisciplinary staffs; huge investments have been poured into quality assurance which have included stand alone software agreements to provide software to aid engineers perform consistent efficient outputs. However many firms cannot justify the costs some software command, reducing efficiency both financially and time wise. These two factors become increasingly important in a lump sum turnkey (LSTK) bid.
Where the Money Is
The bulk of LSTKs costs lie in the construction and procurement areas: 45% Construction, 30% Procured items, 20% Engineering, 5% others.
With many of the large LSTKs running well over $100 million, the engineering portions are in their tens of millions, with marginal savings bid decision can easily be swayed to one firm or the other. As with any infrastructure there are overhead costs involved to maintain and operate a full-service engineering firm; personal salaries and benefits, office space, annual standard updates, conferences and training cost are but a few involved. The simple economics involved with reallocation of manpower and time reduction costs to maintain or acquire a competitive edge makes this paradigm alluring.
Traditional Computer Power
Engineering, given its analytical nature, was one of the first disciplines in which computer computational power was applied. Complex and tedious iterations could be preformed effortlessly. As computers became widespread and desktop computing became affordable, mainframes were relegated to the sole purpose of data management. Engineers now had a powerful tool at their disposal, spreadsheets emerged among professionals' favorite calculating tools. However, truly specialized programs and applications only recently appeared to provide even more powerful specialized tools to tackle complex analysis.
Benefits: Engineering software offered speed and efficiency, consistency in an analysis is maintained and reliability in the results are assured as long as the input is correct and the equations and standards are up-to-date.
Pitfalls: The point of updated standards and equations must be stressed, changes in standards are frequent and unless the most recent standard and program is purchased, liability issues may arise. Alternatively when an engineer makes his own template it becomes almost impossible to decipher by others who whish to use, hence it becomes unusable, and untrustworthy. As mentioned specialized software is expensive and sometimes does not justify its cost. Another pitfall is that standards change almost without notice, and to the unwary engineer this may pose liability problems. Finally, applications once sold are sold as is and are not dynamically upgradeable, meaning more cost is involved when upgrades are required or desired.
The Internet and Engineering Applications
Although the Internet has provided many services to the engineering spectrum, it has not offered a structured engineering services websites, only ad-hoc, solutions. An engineer can find many sites providing downloadable applications that perform simple or even complex calculations; however, they are usually provided on an “as-is” basis. This introduces liability issues, which prevent the use of any programs found on the Internet by engineers.
The Internet Provides a Solution
In my opinion, E-Consultancy will become the de facto standard for engineering outsourcing solutions in the Oil and Gas industry. The model it will adopt is that of an Application Service Provider (“ASP”) providing both the software and its specific engineering consulting services online.
Imagine you are an engineer with a request to perform a succession of similar calculations, you could request for a specialty program to be allocated, then requested, and finally purchased if budgetary constraints permit. Assuming the software is purchased, the Return on Investment (ROI) then depends on the number of times it is used before deemed obsolete. After which, you the engineer must transpose the information into a report to complete the job. An alternative could be the following: you log into a secure website, choose the type of application, enter the data click “Finish” and view the results generated on your screen embedded in the company's format document. The information is stored and can be retrieved at any time, you may email the results or rout them as part of an approval cycle. They may be part of a procurement cycle, which is incorporated with the procurement management system hence streamlining that process too.
What has happened is you, the engineer, have been provided with an online service, tailored to your company or firm's needs. Time savings, reallocated man-hours, process streamlining, consistency, and up-to-date standard conformity are but a few of the advantages allocated by using the service I am referring to.
ASP models are abundant in several industries and are currently experiencing a period of significant growth. The penetration of the Internet and people's awareness of the uniqueness of this model is driving this growth. The most common areas of application include financial services and an array of administrative outsourcing solutions, i.e., pension management, payroll, human resources and tax. The engineering industry desperately needs standardization and homogenization of its software solutions. Engineers generally use ad hoc spreadsheets with limited calculation capability and or accuracy. Software solutions are available for numerous sub disciplines but the high licensing fees (typically in access of $10,000) sometimes not justify its purchase for a one off calculation. By charging it's customers a “pay as you use” fee E-Consultancy attracts a much larger customer base then currently targeted by the niche engineering software providers.
Benefits of an ASP Model for Engineering
Reallocation of Costs
Firms will reallocate their software cost else where as frustration over obsolete software disappears. Being online means the databases reside on the site's host server, the client will not have to purchase new versions of software.
Changes in standards are updated automatically as dedicated personnel are charged with the task of managing standard changes. This increases quality assurance in a firm's output, and removes the need to purchases the usually expensive standards annually as well as reallocating the time spent in finding any changes. Our specialist can take care of flagging and changing parameters remotely as needed this would serve the entire network of users at once.
The use of programs provides consistency and accuracy in results. Many firms charge their engineers to come up with their own ad-hoc programs, many of which contain erroneous basis, and most of which can only be deciphered by those who created them. A system that is prepared by a group of trained programmers can structure an application that would provide clear, decisive instructions and parameters. The result is consistency.
Engineers can access their tools away from their office to check or even generate reports and calculations remotely provided they have Internet access. One of the many constraints traditional programs have is that they are linked to particular computer stations, meaning if an engineer wishes to work on a program he or she must do it at that location. With online access, the program, database and results can all be retrieved generated or reviewed from anywhere. Employers can trust their employees to work from home as their logon times can be reviewed, employees who have a preference to work in odd hours can do so without jeopardizing their quality family times.
This is intuitive; with fewer excuses to use traditional methods, the engineer needs not look for which standard applies to what calculation, he doesn't need to lookup databases to find material specifications, and he doesn't need to put it all together and perform the calculations, it's all done form him using a comprehensive online service like this.
With a dedicated staff of specialists working from remote locations, their services talents knowledge and expertise can be pooled to work on a program used by all the firms at once. Traditionally, employers hire general employees to do many specialized tasks, the result is undermined quality, alternatively some firms may employ specialists who are either relocated to other locations once a job is finished, or work on short-term basis, which introduces the problem of relocating them when their services are needed again. How ever, with a service such as e-consults, a general engineer can communicate with our specialists and arrange to have access to the appropriate programs. The user would have to know how to navigate through the program, hence would be provided with support when deemed necessary through visits by our staff or by attending forums—training seminars—sales pitches.
A standing staff would be reduced through all levels of the organization, fewer engineers to conduct the calculations and research standards or tables, fewer clerks to format outputs as they would be streamlined into the process, all adding to savings.
Time and Cost Savings for the Client
The time saved utilizing these tools go beyond the engineer's time; it transcends to reduce work needed to complete by freeing clerks, draftsmen, designers, engineers and supervisors. It also eliminates much of the wasted time needed for review of calculations and typographical errors. The only review is that to ensure that the input was correct.
Timesaving in itself relates to cost savings. Engineering time charges by the hour, with an average of $45–80/hour (Depending on the region), the number of hours is based on standard agreements. For example, if an arrangement is made to base a certain number of hours on a type of calculation, that will be what the client is billed for, regardless of the actual time it takes. Now imagine, an engineering firm can complete a predefined task in 20% the time it usually takes, it will generate 500% the revenue it would have.
The Rollout Plan/Recruitment
In order to establish an E-Consultancy one would need to recruit the following professionals.
Full time: An assembly of full time general engineers who can serve as salesmen are needed full-time to meet with clients, presenting the product, and selecting the resources needed to complete a job including determining which engineers are needed to work on a job.
Adjunct: Engineers with specializations in certain fields would be adjunct to projects on an as needed basis, we anticipate that their services will be highly needed in the beginning of forming the service to set a broad enough basis to interest potential clients.
A group of dedicated programmers conversant in XML, Java, and VB to manipulate websites and program codes. E-consults is confident it will be able to attract the necessary programmers to build the engineering software tools as well as manage the databases of engineering specific data. This will allow it to offer its customers a suite of engineering solutions ranging from electrical, instrumentation, mechanical, structural, civil engineering solutions.
A set of graphic designers provide the professional look the website needs.
And that's all there is to it, along with proper Project Management a mid-sized design firm can gear its resources.
They say brevity is the soul of wit, not claiming any wit, I'll be brief. Working on several large design projects in the past, I've learned that in addition to the problem at hand, design engineers work with several moving targets including the standards we work with. Purchasing sophisticated libraries and software to assist us are only as good as their shelf life, dictated by the release of the next addendum or revision or version. The Internet is accessible and dynamic enough to provide a portal to access updated information with the touch of a button. Though initial investments need to be made in order to define parameters and set a website up—the site would require dedicated personnel, both technical and logistical to maintain the applicability and validity of the information. Once overcome, the site would provide great savings both in time and money.
Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 · San Antonio, Texas, USA