August 2021, Vol. 248, No. 8
Features
A Case Study: Control Room Management as a Service
By Whitney Vandiver, Pipeline Compliance Specialist, NuGen Automation
The traditional model of control room management (CRM) has operators managing infrastructure, personnel and daily operations internally.
However, as technology has advanced and overhead costs have grown, operators have voiced their concerns about how prohibitive the costs of such a framework are becoming for daily operations.
In response, a new model of CRM and related operations has emerged to reduce operator costs, improve operational efficiency, and assist with CRM compliance.
Model Application
The advent of cloud computing has provided companies with a myriad of opportunities to simplify their technology and integrate systems into more streamlined solutions. It has also ushered in the trend of providing third-party management of previously internal operations for oil and gas companies.
Generally referred to as “IT as a service,” the model modifies the traditional framework by eliminating a company’s management of certain technology and provides services via third-party infrastructure.
Similar to how files can be saved in the Google Drive for Gmail users and Microsoft Office products are now delivered on a download-and-subscribe basis, the model provides a more robust infrastructure with advanced capabilities as well as access with more sophisticated security measures – all with lower overhead than operators would face doing the same operations internally.
This model has a variety of applications within the oil and gas industry, and perhaps the most successful thus far has been with CRM. Control room management as a service (CRMAAS) replaces the traditional model of control rooms by exchanging internal control rooms with integrated technology and third-party management.
CRMAAS connects an operator’s assets with the third-party provider’s SCADA system, thereby bringing in all field and related data into a central control room.
The provider performs control room operations for the assets, including monitoring the pipelines, receiving and responding to alarms, maintaining communications with the field, initiating relevant procedures, diagnosing abnormal operations and implementing emergency processes when necessary.
In this way, the CRMAAS model acts as the operational bridge for operators to establish a well-oiled and compliance-driven process to monitor their assets and run their daily control room operations.
CRMAAS Model
Control room operations are a combination of compliance and response, experience and planning. Doing it well as an internal process can provide operators with a smooth experience; however, moving to the CRMAAS model grants operators access to several benefits that they otherwise would struggle to obtain.
From reduced overhead and more experienced controllers to improved compliance and operational efficiency, operators will find that CRMAAS offers an environment for more effective and manageable control room operations, regardless of the size of their assets.
Where traditional thought required a control room to be managed internally, CRMAAS brings an operator’s SCADA and other relevant systems into a centralized control room that is operated and maintained by the service provider.
Advanced infrastructure is supplied by the service provider, eliminating an operator’s need to purchase and maintain hardware while also benefitting from advanced physical and cybersecurity measures.
The provider hires and manages personnel, often attracting more experienced controllers and management team members, thereby reducing operator overhead for salaries, benefits and training. Compliance is also woven into the service such that the provider offers CRM compliance management for documentation, processes, scheduling and audits.
Add to it a designated disaster recovery location that can be based geographically far away from an operator’s assets, and CRMASS is a comprehensive service that supports CRM operations with a holistic and streamlined approach.
CRMAAS also provides operators with opportunities to save on CRM costs. Third-party management solutions redesign the overhead responsibility for CRM by offloading the primary and upfront costs, which allow operators to pay only for those services they desire – and then only pay for the portion they use when applicable.
Cost savings can be experienced in infrastructure, software licenses, security features, personnel and administration management. It also translates into the related services that come as part of CRMAAS solutions, including compliance management, documentation review and audit support. Most operators will find that CRMAAS translates into a lower overhead well within the first year of service.
Mid-Sized Operator
When the client came to NuGen Automation for the control room operations of a Texas-based asset, the operator was experiencing a high overhead for maintaining their internal control room and was facing continually rising costs as more assets were being acquired.
As with most operators, they were looking for a solution that would allow them the flexibility and security of an internal control room with reduced overhead.
A closer look at the client’s operations found that, as a mid-sized operator, they were paying the operational costs of an internal control room with substantial infrastructure and software requirements, a direct reflection of the operator’s technological demands for reliable control room operations.
Additionally, the combined cost of personnel and compliance/LDS (leak detection system) management claimed $700,000 of the annual budget. On infrastructure, personnel and compliance/LDS management alone, the client was spending $848,000 outside of training, testing, security and licensing.
NuGen Automation’s third-party control rooms are designed to provide a centralized primary location that monitors and responds to multiple operators’ assets.
This requires an extensive infrastructure to provide not only the technology capabilities but cybersecurity and reliability for heavy workloads.
This setup frontloads the infrastructure costs as part of the CRM responsibilities, which allows them to then assess how much of the overall infrastructure an individual provider requires.
This determination then creates an allocated cost for the operator, a reduced cost that is valued based on the portion of the overall required infrastructure usage and is spread out over the term of the agreement.
The greatest benefit in this model is that operators are not responsible for the initial purchase, installation or maintenance of the infrastructure, only the usage to operations.
Personnel
Another area in which the client experienced a larger cost savings was in personnel, because the third-party control rooms are operated by full-time personnel that include console operators, compliance specialists, leak detection specialists and managers who have been vetted and trained for a variety of pipeline operations.
With the traditional control room model, the client’s internal controllers were often dedicated to one asset; however, with the CRMAAS model, one controller is assigned to multiple assets so that customer pricing is structured as a percentage of the controller’s total cost based on how many of the operator’s assets make up the controller’s full workload.
Depending on client needs and asset workload, control room personnel are either shared among multiple operators for those who have lower-demand assets or dedicated to specific operators for those who have higher-demand assets.
This setup allowed for a reduction in personnel costs because the necessary positions did not require full-time dedication to their assets, meaning their annual costs were based on their personnel allocation rather than the industry’s standard salary.
LDS Management
The third area in which overhead for CRM operations can be reduced is compliance and LDS management.
In addition to the administrative costs of hiring internal personnel, the client faced costs for records management, CRM documentation, audit preparation and more. Inherently, these aspects bring about major costs for operators, especially if they are mismanaged and lead to violations.
As a standard part of proper CRM, these elements must be included for the safe operation of pipelines.
As a mid-sized operator, the client required a substantial dedication of compliance and LDS resources, but not the entirety of a full-time staff. This allowed for a reduction in related costs, bringing down the client’s compliance and LDS management costs from $500,000 to $40,000.
Comparative Cost
In addition to the top three most significant control room costs of infrastructure, personnel and compliance/LDS management, the client had several other areas of CRM costs, including software and licenses, system upgrades, IT and SCADA support, personnel training and qualification, system testing, physical security and more.
The initial evaluation revealed that the client faced an annual cost of $1.15 million to manage infrastructure, personnel and compliance and LDS management for their internal control room.
A full assessment of the client’s assets and needs showed that a great deal of major overhead could be reduced via the CRMAAS model with savings in every area of their CRM operations.
As shown in Table 1, the client experienced cost savings throughout CRM operations as a result of the CRMAAS model. This not only translated to a significant reduction in first-year costs but a noticeable simplification of the client’s time necessary to achieve a compliant control room environment.
As is common with CRMAAS models, the cost savings that operators experience are more substantial during the first year of operations. This is because of the elimination of certain costs and fees, such as infrastructure, that internal control rooms cannot structure based on shared workload, but the overhead reduction does not stop after the 12-month mark.
Conclusion
CRM is by no means a simple process, and operators are likely to incur more costs than what can adequately be discussed in this article.
Depending on the size of the operator, overhead can be increased by the number of necessary controllers and support personnel, maintenance and testing a fully redundant back-up control room, system-specific training, assessment and documentation of systems for state and federal regulations, and much more.
However, CRMAAS can capture these aspects and more within a safety-focused model that provides efficiency and overall cost reduction. The CRMAAS model has been successfully integrated into the oil and gas industry and continues to show substantial savings for operators along with increased compliance and security.
While not all operators will find the model to be necessary, most will recognize the benefits of not only reduced overhead but the expertise and reliability that comes with third-party control rooms.
In this way, CRMAAS is leading the industry into the new age of CRM compliance and assisting operators in redefining how they view compliance management and the ROI that can accompany such an innovative solution.
Author: Dr. Whitney Vandiver is a compliance specialist at NuGen Automation and specializes in control room management. She previously worked for a pipeline operating company in compliance-driven documentation and served as a volunteer editor for the drafting of API MPMS 18.2. She holds a bachelor’s degree from the University of Central Oklahoma, along with a master’s degree and Ph.D., both in Linguistics, from Purdue University.
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