A new 12 page position paper from Arthur D. Little, (ADL) ‘Time for Change, Oil Company Asset Management’ highlights ‘structural changes’ in the industry that make the goals of reserves replacement and operational efficiency increasingly hard to achieve. For ADL, the problem is the ‘traditional’ asset management model that focuses on individual asset performance and short term results. ADL proposes a new ‘holistic’ asset management approach and ‘integrated decision making’ at each level of the asset hierarchy.
‘Traditional’ refers to the current combination of an asset-based organization and asset lifecycle management systems (ALMS). While successful in improving operational performance, the ALMS fails to provide adequate ‘cross asset line of sight and portfolio control.’ ADL proposes to build on the ALMS with an ‘asset network integration’ layer and enterprise-wide portfolio optimization.
The integration layer provides common services to assets such as supply chain management and piloting of new technologies. The top tier mashes up individual asset data, rolling in strategic considerations such as investment magnitude and risk profiles. The move from ‘siloed’ assets to portfolio-based management requires new tools—enter the ADL Performance Dashboard, a service offering that advises on KPI selection for field and portfolio analysis, capex budgeting and resource allocation. More from adl.com.