Real-time, cross-enterprise collaboration improves decisions and reduces wasted effort.

The energy industry spends hundreds of billions of dollars each year executing capital projects that involve a network of companies, contractors and vendors. Too often that network contains unintentional, built-in time and efficiency blocks that waste money and resources.
A major exploration and production project involves multiple owners as partners, and work with tens if not hundreds of contractors, distributed around the world in a complex value web - the project enterprise.
To improve project cycle time and costs, the industry needs a practical, Internet-based platform that enables real-time, cross-enterprise collaboration and consultation. This will enable faster and better decision-making distributed across the project enterprise, which unifies owners, producers, partners, contractors and vendors.
These enterprises are temporary business entities that come together to conceive, design, construct and manage complex custom projects, according to "Powering the Project Enterprise into the 21st Century," by Suresh Madhavan, Pradeep Anand and Shree Nath, presented at the 2000 PMI-Arabian Gulf Conference in Bahrain. These enterprises are goal-driven, highly networked, fluid, self-organizing systems consisting of multiple players - collaborating corporations, their employees and free agents.
Managing interactions across this globally dispersed network is difficult and expensive. No wonder cycle time and time-to-first-cash are such big challenges.
Interaction costs
Interaction costs refer to the costs of people and companies interacting to specify, design, plan and construct assets. It is the searching, coordinating and monitoring done when people exchange goods and services.
Interaction costs pervade all industries. They account for 51% of labor costs in the US economy, a third of the country's total economic activity, Patrick Butler and Ted W. Hall wrote in "A Revolution in Interaction" (McKinsey Quarterly Report, 1997, No. 1). The average for one US electric utility business is about 58%. For the petroleum industry, interaction costs may exceed 70%.
Contexts for efficiency
In this world of time and space, north, south, east and west are geographic contexts. The position of the sun, hours, seconds and minutes set context in time. These are our coordinates for time and space.
So what are the contexts for efficiently running a business or a project? They are what a firm sets out to accomplish, the direction it sets for itself and the goals and objectives it has decided to accomplish. To attain them, the business develops an objective-driven work plan for itself and other organizations, with which it will consult, share, partner, transact or otherwise interact.
Normal collaboration is simply restricted to people sharing data and information. However, in a multienterprise environment, businesses need to execute by contextual collaboration. This is particularly true when business processes are not fully owned and controlled by one organization, as is the case during business acquisition activities, large-scale custom projects and the product development life cycle.
Today's business environment is largely driven by sequential individual interactions. This is contrary to the ambition of every business to be dependent on its processes rather than limited by individuals. Not everybody has real-time, fingertip access to the information required to make timely decisions.
Considerable effort is spent locating, packaging and sharing the information and managing associated communication. That effort helps transform information and communication into knowledge that is then available for decision-making. These activities are compounded if information is transacted solely with documents because naturally concurrent interactions turn into serial processes.
A project has multiple objectives or contexts that define it. For example, the contractual context is a structured system of contracts and agreements that define how each company is obliged to perform. The technical context is defined in terms of a hierarchical structure of technical specifications, including design and performance details.
The execution context is a structured organization of the scope of work that each participating company agrees to perform in order to meet project objectives. A work breakdown structure represents the project management context, or perspective. Multitudes of smaller contexts are embedded within these contexts.
Contexts are crucial in terms of determining interactions and associated costs. Designing the context for every aspect of a project such as contractual, technical, scope of work and work breakdown elements directly define the way the project is structured and executed. Every point in this context tree is a decision point.
Every decision point in turn requires consultation with other people and reference to previous discussions, best practices and knowledge, all of which are meaningless without context, and assembly of which always impacts interaction costs and time.
Context and collaboration
In today's work environment, the bulk of the created knowledge asset stays trapped in the "people network" instead of the "business process network." Contextual collaboration is critical to modern businesses because it abstracts people from the grind and minutiae of information handling.
A contextual collaboration platform is also needed for frontline people to make real-time decisions across the enterprise, while management continues to have visibility into progress toward project objectives.
If the true value of organizational networking - reduction in interaction costs and time - is to be realized, contextualization must occur at several layers:
• work processes must be tied to visible business objectives across the entire project network;
• relationships among business objectives and strategies to achieve them must be explicitly linked;
• people across multiple organizations, and at multiple layers within them, must be dynamically mapped to objectives and work processes; and
• all network relationships and the data, information and knowledge that drive them must be managed in context.
All communication must occur and be captured in a self-organized manner around specific business contexts. A contextual communication platform is thus necessary at the core of the value web.
Communication platform
To deliver major savings in time and money without compromising quality, the networked project enterprise needs a multilayered "project bus" that carries data, information, knowledge and wisdom behind decisions, and connects all participating organizations for real-time, consultative decision-making.
A contextual communication platform harnesses scattered project resources like people and knowledge, simultaneously giving every team member access to project information, on a need-to-know basis, in real time.
Additionally, it helps in creating a knowledge base for every project enterprise, so that project knowledge can be used in production operations and reused for new projects.
Importantly, the contextual communication platform enables globally dispersed organizations to rapidly create new, dynamic, virtual project enterprises with their inherent advantages.
Automatic sorting, filing, storage and easy retrieval of voluminous e-mails from personal accounts demonstrate the benefits of contextual communication. Employees are inundated with person-to-person emails that need to be forwarded and manually filed into an appropriate business context.
Traditional e-mails are so commonly used in today's work environment that they are significant contributors to information and work overload, B. Jensen wrote in a Perseus Books publication titled Simplicity. The New Competitive Advantage.
Moreover, the sheer volume of peer-to-peer e-mails has become a hindrance to fast execution of projects and achievement of business objectives. The joke of the day going around the office has the same priority as an e-mail highlighting the risk to a US $68 million project.
Information trapped in e-mails is not readily available when working on a business decision. Context switching is an expensive and wasteful exercise, and forces each e-mail recipient to independently maintain filing folders simply to keep track of communications.
In the contextual communication platform, all communication is automatically sorted by context, threaded, filed and made available to anyone who has responsibilities for the business context. This approach eliminates e-mail clutter and the drudgery of sorting by priorities and filing e-mails for future retrieval and use. Communication becomes an integral part of real-time work processes.
Customer adoption
Global exploration and production firms use project enterprise management solutions to accelerate business cycles and revenues while reducing costs. The cross-enterprise solution offers considerable promise in terms of achieving the requirements of businesses to interact contextually by:
• assisting in the development of business and project objectives - not just financial, but people, health, safety, environment, contractual, legal and engineering;
• spawning off work processes from these objectives by defining the who, what, where, when, how and costs for each objective;
• dynamically and continually mapping people and participating organizations to these objectives and processes;
• integrating data analysis, interpretation and a suite of integrated business applications into the contextual collaboration platform for real-time communication and decisive work processes;
• incorporating a project bus that carries data, information and knowledge to all participants, on a need-to-know basis, for faster and better decisions;
• making Internet communication event-driven and an integral part of real-time work processes by including a smart, context-aware communication system that sorts and files e-mails and discussions in the appropriate business context;
• creating an invaluable knowledge warehouse that can be reused in production operations and future projects - again, reducing interaction costs and time.
Market leaders, including several Fortune 100 energy companies, already have embarked on initiatives to garner the full value of this technology.

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