InsightDecember 2014
Business intelligence and analytics are exploding in popularity, however some industries, including the infrastructure sector, risk being left behind. How can you apply these tools and techniques to your infrastructure programme and draw clear insights from a complex world?
We are entering a data revolution. The industrial and mineral giants of the last two centuries are being displaced by those whose business models are developed around a different, more intangible resource. Witness the rise of organisations like Google, Facebook and Apple.
But in the infrastructure sector we build physical assets that enable the movement of people, goods, commodities, energy, water and information. So data is less relevant, right?
Wrong. It may be more difficult to exploit data in infrastructure than in other industries – we are often creating and managing highly complex, unique and physical assets – but it is no less useful.
This article explains five ways to exploit data to drive improved business performance across your infrastructure programme.
1.Gain insight from your cost base
2.Predict the future
3.Make your capital programme intelligent
4.Benchmark performance
5.Visualise and analyse data geographically
Gain insight from your cost base
Business intelligence describes the facts and insights created from existing raw data that enable managers to make more informed, evidence-based decisions. The easiest starting point is to analyse your cost base. All organisations produce basic accounts to record income, expenditure, assets and liabilities, and this provides a readily available source of data.
It is likely that your finance systems already feature detailed hierarchical structures of what has been spent, with whom and when. Applying simple business intelligence techniques can enable you to explore your cost base, drill into areas of interest and extract valuable insights in minutes. Then you can start answering questions like “where do I spend the most money?”, “what are the drivers of these costs?” and “what actions can I take to reduce my cost base?”.
This approach can specifically benefit the infrastructure sector because in many regions it is highly regulated, with a constant focus on capital efficiency to deliver maximum public services at minimum cost. Being able to explain the reasons for expenditure in a clear, compelling and persuasive manner is critical. Evidence, rather than anecdotes, provides credibility.
Predict the future
If business intelligence helps you to understand and diagnose problems, then analytics helps you to predict what might happen and recommend courses of action. You may see that you spend large amounts on expensive reactive maintenance on your assets and want to reduce your costs or asset downtimes. A branch of data science called ‘machine learning’ can help you to more effectively predict the assets that are likely to fail before they actually do.
It is also possible to fuse your own data with external data sources to support your decision-making. For example, you might want to gain better visibility of financial risks in your supply chain. So rather than just downloading credit reports for your first-tier suppliers before you award a contract, why not map your entire supply chain and introduce automatic credit and financial data feeds for these organisations? This will give you continuously updated and aggregated financial intelligence that keeps pace with your constantly changing supply chain, helping you to anticipate and mitigate risks before it’s too late.
Make your capital programme intelligent
An intelligent capital programme is one that integrates and presents live and accurate information – schedule, cost, quality, risk and progress being the most common – to support decision-making.
Effective information management will provide assurance that, in weeks rather than months, you will be able to answer questions like: “am I ahead or behind budget and does the progress of my capital programme reflect this?”, “what headcount do I need over the next five years, and how many of them should be project managers?”, “who within my supply chain is performing well?” and “where are all my water mains installation projects and are there any clashes with road maintenance projects?”.
Programmes should use data visualisation tools to explore and experiment with data, working with management to understand what information they need to make better decisions. Once the content of a dashboard has been agreed, production can be automated by creating live feeds from the systems that generate the data.
Benchmark performance
Infrastructure organisations do not always compete for customers but they do compete for resources and capital, be it private investment or government subsidy. To be exceptional, their performance needs to significantly exceed that of peers. This means comparing yourself to other organisations in your sector, or indeed outside.
You need to consider who to benchmark against and what to benchmark; for example, cost, schedule and major programme ratios, or even more subjective areas such as delivery models.
As the old clichés go: if you cannot measure it, you cannot improve it; and you need to make sure you are comparing apples with apples. Capturing schedule and cost details in the right structure from day one, along with the right contextual information, will enable you to draw valid conclusions and identify where to make improvements.
Visualise and analyse data geographically
Infrastructure by definition has a location. Most organisations use geographical information systems to understand and map the location of their assets. However, this information is rarely shared with the broader organisation – a missed opportunity.
When you visualise assets or works geographically, correlations become immediately obvious. Are water pipe bursts particularly common in a certain location? Is the construction of a cluster of assets behind schedule, perhaps due to a lack of access?
Incorporating external data sources into scenario modelling through the use of application programming interfaces (communication protocols that enable you to draw live data feeds from third party databases into yourown applications) can enable you to make much quicker and more accurate decisions.
For example, you can automatically calculate the quickest route for an engineer between a series of jobs. If you are planning to set up a materials stores facility, you can instantly calculate the precise driving distance and time to each of your schemes of work depending on a number of stores’ location options. You can then balance the transport costs and carbon usage with the facility acquisition costs. If you are building a new road, railway, water mains or energy distribution line, then you can incorporate data on land topography, geology, population or acquisition costs. All of these data sources reduce the reliance on assumption and judgement to make informed decisions.
Conclusion
The data revolution will radically change the way we manage capital programmes in the future. Other driving forces, like building information modelling and the internet of things (the proliferation of internet- connected sensors and devices that monitor and control the environment), will produce data that will open up vast opportunities for greater control, insight and automation of capital programmes.
The benefits will be step changes in predictability and capital efficiency. The initiatives described above are just the first critical moves towards a new world of efficient and effective infrastructure.
For more information, please contact:
Chris Gage
Director
t: +020 7544 3730
e: