Digital Revolution

Chemical companies have invested billions in automation and information technology. These investments have increased reliability, reduced costs and created greater operational efficiency in production and supply chain management. The next frontier of value creation in the chemical industry can be reached by the digital revolution that has only just begun.

The world of estimating and cost management is a traditional one. While experience is of vital importance, methods often require a large amount of time to be spent on detailed estimates, gathering large amounts of cost data and then restructure it for reporting. In the digital age we now find ourselves in, project controls software has not stood still. Rather, processing of large amounts of cost data can be done in the blink of an eye. 

You may wonder: why are companies still struggling innovating while the advantages are so clear? A survey by PWC highlights a number of barriers to innovation (see the figure below).

Barriers to Innovation

Why are companies not innovating? 

Besides the initial investment required before the result is obtained, a very important factor is the will and capacity of the organization to innovate. For a successful transition to new technology, everyone has to be engaged in the process. What makes it difficult is that estimating and cost control often are a very traditional discipline, in which estimators have collected their own cost data and cost estimating models that only they can maintain. With pride they try to hold on to it. There is no reason for them to change to a different system. This is a problem when they retire or leave the company, because this valuable information leaves with them. Getting rid of this diversity of cost data and getting a consistent estimating method can be guaranteed by a transition to modern software solutions. The benefits are numerous: safeguarding and maintenance of data, sharing knowledge, better estimates and consistent reporting. 

The successful companies have created a culture of innovation, actively motivating people to innovate, which includes giving people extra time to create and develop opportunities for collaboration that go beyond the traditional functional and organizational boundaries of their jobs. 

In terms of cost engineering processes, the entire project controls team should be aware of cost estimating, cost analysis/ assessment, schedule analysis/planning and risk assessment of the project, as well as what is happening in the field. 

Make use of modern technology and don’t make the mistake of standing still. Your competitors aren’t!

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