Global competition and volatile markets are creating a challenging business climate for project-based firms which leave them with little room for error when managing projects. Asset intensive industries have their own individual challenges when it comes to managing their asset's lifecycles, but one area that is often overlooked or pushed off until the last minute is the decommissioning phase of their assets. The key to decommissioning is delivering projects and milestones on time and within budget. However, as the number of moving parts in a project increases, so does the difficulty in maintaining visibility and control. Companies need to take a holistic approach to enterprise project management to reduce risk in the business and be successful.

Based on the experiences of over 600 respondents, this report will explore proper asset lifecycle management. Specifically the decommissioning phase of an asset's lifecycle - how it needs to be treated like its own major capital project and planned for now while the necessary resources are present.

Project Management Landscape for Asset Intensive Industries

In project-based business, there is a unique set of challenges when it comes to managing both customer-facing requirements and operational processes. Many projects are complex and have a large number of milestones and process checks. These milestones are usually tied directly to the financial performance of the project. The wide range of tasks may include bidding and estimating project costs, working collaboratively across distributed teams, and managing multiple resources (whether people or assets). These processes must be managed effectively in order to deliver projects successfully on-time and under budget.

For asset intensive companies, the speed at which an asset goes on line is a high priority; because of this, the retirement phase is frequently an afterthought. There is no production loss by not finishing a decommissioning project on time. It, ultimately, comes down to opportunity cost. By not finishing a decommissioning project on time and within budget, additional resources will be needed to complete the project. These are resources that could have been used to invest further in the business. Companies that have put plans in place ahead of time to decommission their assets reap the benefits and this gets carried over into future projects.

Also, in asset intensive industries, physical assets form a significant proportion of the total assets of the organization. These industries face the harsh realities of operating in highly competitive markets and dealing with critical assets and equipment where each failure is disruptive and costly. At the same time, they must also adhere to stringent Environment, Health, and Safety (EH&S) regulations.

The largest pressure driving all companies, especially asset intensive ones, is the lack of talent and resources that are present today (Figure 1). In fact, recent Aberdeen research has shown that over 60% of companies feel they are understaffed in their high skill positions. When you factor in the growing practice of globalization, a scenario is starting to build that is straining the ability of asset intensive companies to hit time and cost targets for their projects. Asset intensive project-based companies are being asked to deliver the same high-quality work with fewer resources at their disposal. This is starting to increase risk in the business. These organizations have no choice but to work smarter and focus their attention on managing costs for all of their projects. This is especially important when it comes to decommissioning. There is a tendency to make the retirement phase of an asset an afterthought, companies must plan now before these aging workers retire and are no longer available to assist.

This business environment is difficult enough to wade through. But, if you throw in the fact that a lot of companies still rely on manual processes to manage all of their projects it almost becomes impossible. Automating the process for asset intensive industries would do wonders for the business. Companies need an efficient and holistic system to make effective decisions. A manual system has a trickle-down effect into visibility and change management, a key component of successful project management.