Anthony "Tony" Bazzini, chief engineer at ExxonMobil Global Projects Co., said two issues have contributed to the fragility of the current business model system, creating risk for owners, service providers and suppliers when facilities are being planned for construction. The first issue is a lack of alignment and misunderstanding what creates success.
Anthony Bazzini, chief engineer at ExxonMobil Global Projects Co.
"Each party that participates in a project comes into the project with an objective," he explained. Whereas a service provider may have a financial objective, an owner's objective is to conduct the project safely, competitively and predictably.
"We don't normally - as a matter of normal practice - share in a detailed, lowrisk kind of way what those objectives are. I believe if we did that, we would be able to mutually support each other in meeting those success objectives," Bazzini said during a recent webinar called "Aligning Owner/ Contractor/Supplier Relations in the Future - A Better Business Model" presented by Petrochemical Update (Reuters Events).
He added that addressing risk has been another issue, with a lack of transparency contributing to the need for a "common language" in the industry.
"The hardest thing we do in a project is dealing with all of the alignment, communication and transparency, which are all human interactions," Bazzini said. "We have a system where 'risk' isn't expressed in a common language."
He explained there is no standard for expressing risk, which is to the industry's detriment.
"Until we get to that point - where we have transparency and alignment on what success looks like - the ecosystem will remain stressed," he explained.
Goal congruence
Cameron Remeljej, head of facilities at BHP, is part of the Operating System 2.0 (OS2) research group. OS2's goal is to transform the way facility construction is conceived, evaluated, planned, delivered and operated. He said OS2's research has concentrated on a topic called "goal congruence," which focuses on how to create business contracting models that incentivize collaboration. He explained that the research helps to remind the parties "we're all in it together; we're looking after each other."
Cameron Remeljej, head of facilities at BHP.
Bazzini noted that OS2 is progressing research that goes beyond the engineering aspects of project risk to incorporate insights from law, finance and human dynamics. The physical aspects and work only make up about one-third of a project, he said.
"Two-thirds of the effort on a project is managing information, dealing with interfaces and aligning organizations (whether it be supply chain, service provider or the owner). If we look at it that way, it changes how we address the problem," Bazzini continued.
Remeljej said BHP is looking to utilize digital tools for design, construction and construction monitoring more often, which is a "journey we've just started."
A goal for the company, he added, is for 3-D models to one day be on the cloud so that construction partners can see the project model as it is being built. This allows all the moving pieces of creating a project plan to be in one place, meaning the contributors can provide input and easily verify plans, reducing the risks of miscommunication and lack of alignment.
"If you can't control or manage the risk and things go wrong, you can get yourself in a lot of trouble," Remeljej said.
