Zombies and oil refineries really don’t mix well.

 

So it was with some alarm that I awoke abruptly last Sunday morning and heard nearby the chuckling voice of my teenage daughter, “Dad….dad….there’s a zombie massacre down at Ineos…can we go and watch?”

 

My first thought was that my old boss must have let Health & Safety slip a little, and that his job might be at stake.  Then I remembered Brad Pitt was in the district, filming “World War Z” close to the Ineos oil refinery, where I used to work.

 

A ‘post-apocalyptic zombie horror’ needs good backdrops, and in its own way the refinery is spookily spectacular, especially at night.

 

What a refinery doesn’t need though is the undead breaking bits off it.

 

Refineries are highly complex machines designed to optimise production and flows of product.  A breached pipeline here, or a smashed valve there, would interrupt the flows and obviously lose a company money, as well as increase the chances of an explosion.

 

In Oil & Gas, digital sensors are attached to every asset in a plant, and digital flows (representing product flows) are clearly understood and constantly monitored, both from a production and a fiscal perspective.  Should a flow be interrupted, control room operators and automatic systems monitoring the real-time performance of the plant will intervene quickly, and take appropriate action to maintain safe operations.

 

So, safe to say, it wouldn’t be ideal if the people in the control rooms had their brains eaten.

 

Assuming the undead did damage the plant, and were then defeated, at that point the business managers and technical specialists would sit around the table together, roll out Piping and Instrumentation Diagrams (P&IDs), and get to work on restoring the safe flow of product through the refinery.

 

P&IDs are print-outs from a computer model.  The model allows all relevant parties to see clearly how individual assets interact – things like pipes, valves, pumps, meters and sensors.

 

Take a look at this part of the Ineos plant.  With a P&ID such as this, the tech and non-tech personnel can easily understand, and communicate about, where the zombies compromised the flows through that part of the refinery, and which assets have to be replaced.  They can also gain a reasonably accurate understanding of the timings and costs of the maintenance project.

 

The Oil & Gas industry have made it their business to understand how everything is put together to make their business work – there is clarity about the flows of product through and between all businesses in Oil & Gas.   Which means that failures which threaten the well-being of the business hardly ever happen.  Only the most prolonged zombie attacks have any chance of completely stopping production.

 

Occasionally in the industry there is a product flow disaster serious enough to cause boardroom heads to roll.  An example is the replacement of the BP CEO after the Gulf of Mexico oil spill, but that was a rare occurrence.

 

The same is not true of failures in major IT projects.

 

According to research from Oxford University [pdf] such failures are ending the careers of senior executives in both the public and private sectors.

 

Researchers studied over 1400 large IT projects around the world, and found an average cost overrun of 27%.  But ‘an unusually large proportion’, one in six, had ‘a cost overrun of 200%, on average, and a schedule overrun of almost 70%…’

 

According to the study,

IT projects are now so big, and they touch so many aspects of an organization, that they pose a singular new risk.

Examples of corporate and senior management casualties of IT project failures are included:

 

Levi Strauss – migration of disparate IT to single system – $200 million loss, CIO resigned

Auto Windscreens – new order management & ERP systems – 1,100 employee company bankrupt

Airbus – product development software issues – delivery delays, CEO resigned

Kmart – IT modernisation / supply chain software upgrade – $2 billion wasted, merger with Sears

 

But the researchers’ belief that such failures can be attributed to ‘black swans’ is not one that we’d share here at OBASHI.

 

Back in May, my conclusion on the general IT industry attitude towards the Amazon/Sony cloud outages was,

“Ascribing the ‘black swan’ to events caused by a lack of business clarity, faulty engineering, poor operational procedure or inadequate design, smacks of complacency.

 

There are no black swans in the cloud.”

There are no ‘black swans’ in on-premise IT either.

 

Information technology exists for one reason – to support the flow of data between business assets, which includes people.

 

The reason so many large IT projects fail is that, unlike Oil and Gas, IT does not have clarity about how data flows through the assets of the business.  There has been no simple ‘big picture’, an equivalent of the P&ID, of how everything is put together to enable flow.

 

If you can’t see, and easily communicate, how data flows through people, process and technology, how can you manage risk?

 

The authors of the Oxford University research state that,

“It will be no surprise if a large, established company fails in the coming years because of an out-of-control IT project.”

Very rarely is anything “out of control” in Oil & Gas, which is why we have spent over 10 years working on OBASHI, adapting the well proven practices of Oil & Gas IT to bring the same degree of clarity to the wider business world.

 

Most businesses today are inexorably reliant on flows of data to compete profitably.  As such, it is essential that appropriate governance is applied by CxOs in the management of those data flows.

 

A few years ago, when the U.S Congress was holding hearings on the financial crisis, I commented on JP Rangaswami’s blog,

“…As complexity has built up over time, with systems and technology being piled on top of other systems and technology, the need to understand vulnerabilities is becoming ever more acute. A failure may not cause a physical explosion but it could certainly cause an economic one…

 

…I hope IT doesn’t get to the stage where similar hearings are being held and IT leaders are ‘in the dock…’”

It will be no surprise if CxOs of a large, established company are prosecuted in the coming years because of an out-of-control IT project.