DCS | Picking a DCS: Who Decides and How | Control Global

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This article was printed in CONTROL's December 2009 edition.

By Willem D. Hazenberg

The choice of a distributed control system (DCS) for a process company is one of the most

important ones it can make. First, it is expensive. Average cost for a DCS is $1.5 million.

Expenses for the selection process alone can run from !100,000 (approximately $150,000) for

one project to!

3 million (approximately $4.4 million) for a corporate-wideimplementation. Investments in large-scale projects can run as high as !30 million ($45 million).

The service costs over the lifetime of the DCS can run into multiples of the initial investment.

Vendors typically will spend upwards of!35,000 ($50,000) to make a sale. Second, the selection

process takes a long time and involves a lot of personnel. Selection alone can take nine month to

three years, and the implementation can take another 12 to 24 months.

Then, the decision involves a long-term investment. The average life expectancy of a DCS is 17

years. Also, the choice of a DCS will have profound effects on the efficiency, productivity andprofitability of an operation. It's a decision that companies can't afford to get wrong.

At the same time, local employees tasked with making the decision about the firm's next DCS are

often at a disadvantage. Because this investment only takes place every 10 to 17 years, most

selection team members don't have the knowledge needed to perform this analysis. Selecting a

control system also is uncertain due to the subjective judgment of decision makers. The main

problems are: 1) the exact criteria for selection are not known; 2) the method for deciding is

unknown; 3) there are multiple actors, each with their own biases and preferences for particular

suppliers; and 4) internal politics.

So, the choice of a DCS is not always univocal, and the relationship between the business case,

chosen solution and selection process isn't always there. This disconnect will have growing

consequences in the future. In 2006, the value of the DCS installed base more than 20-years-old

was more than $65 billion, making them replacement candidates soon. As a result of my research,

I've concluded that process users need to choose DCSs in a more univocal way, and so make

their decision process more transparent.

Within the framework of my MBA thesis, I conducted a literature review and interviews alongside a

Here Are the Results of a Survey of Who Makes This Important Buying

Decision and What Criteria Come into Play

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survey. Research was done in 39 countries with 166 people about the selection criteria and

processes for the purchase/migration/expansion or replacement of a DCS. The respondents work

for end users, DCS suppliers, system integrators and engineering companies.

I investigated what kind of value

proposition end users wanted from their

DCS vendors, and asked DCS vendors the

same (Table 1). For end users, it was not

the superior product, but the best product

for the best price that was the most

important value proposition.

When I looked at end users' expectations

about the technology, I discovered that

"cutting edge" was not necessarily what most of them wanted. More then 70% of all users callthemselves industry followers, and 51% said they will wait one year after the first product is

released before considering it. Twenty-four percent said they would wait more than a year to install

newly released products.

Multiple Phases of Selection

There are multiple phases in the DCS selection process (Figure 1). The first is the trigger point. A

company decides it needs a new system for any number of reasons. The primary business case

and trigger point to start the process of buying a DCS for replacement and migration projects is

externalthe DCS supplier will no longer maintain the current system. The vendor ceases

support, and replacement parts become unavailable.

A second reason for many customers is the need to reduce

equipment maintenance and related expenses, or the desire for

process improvements and increased production. So, it's reasonable

to say that migrations and replacements are more driven by fear of

an obsolete system than by potentially improving capacity, gaining

better control or other functional possibilities of a new system.

However, when considering extending an existing system or

choosing a DCS for a greenfield project, the main drivers are

improving automation, availability of improved algorithms, ability to

get business information to the workplace through real-time data to

enable faster decision-making, and automatic start-up and shutdown

routines. In these cases, an internal desire to improve automation is

the driver.

Figure 1. The DCS selection

process involves asystematic elimination of

possible vendors influenced

b a variet of stakeholders
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Once this trigger point is reached, a funnel effect begins to take

place. The choices, determined by a variable group of people and a

variable set of criteria, continuously narrow the options until one

vendor remains. The first set of narrowing variables is corporate guidelines about preferred

vendors, usually defined by the purchasing manager and an engineering consultant. The field of

possible DCS vendors is narrowed to between one and five vendorsoften only one or two.

Government or related organizations mostly follow government procurement rules, which often

require choosing the lowest-cost or, in the best case, the most economically advantageous tender.

Next, the selection process begins again, and the long list is narrowed even more, using more

specific criteria, until finally the decision makers arrive at one choice.

Before a company starts the prioritization process, it should first define its business needs

(function requirements) and its strategic outlook for how it wants to operate the plant in five to 10

years. Is it in the plan to outsource the system maintenance or not? (This has an influence on thepriority for training or needed services). What about integration with other units? When these

questions are answered, selection can begin.

Then we go to the long, short and final list phases, the thing to keep in mind about selection is that

in a selection phase, there are actors with influence or power, and there are criteria with a certain

weight factor or priorities. The results of this combination will be a shorter list of vendors in the

next phase, where this process starts again, sometimes with other actors and a new set of criteria.The goal of our research was to define the core selection criteria and their priorities for the

purchase of a DCS in the chemical industry, and to design a decision-making model, so the

decision-making process for new systems was more balanced, more transparent, more

consequent and faster.

Actors and Criteria

The main actors during DCS-selection phases are the control engineer, purchasing manager,

project manager, consultant from headquarters, plant owner and maintenance manager. Other

actors at the short list phase are engineering firms. The role of operatorsthe ultimate end users

is minor in the selection process.

An in-depth study inside and outside the academic world, inside and outside the DCS world, and

company evaluation models provided 24 models. From these, I extracted 12 main criteria:

Supplier vision

Supplier's ability to execute

Supplier's guarantee of the business case

Functionality

in the outcome.


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Interoperability

Technology

Implementation

Documentation

Training

Service and support

User experience and costs, including the initial costs, on-going expenses and exit costs.

The four most important criteria for end users are functionality (11.5%); technology (10.73%);

service and support (10.65%); and business case guarantee (8.97%). On average, the highest

priority is given to initial costs when buying a system, and the lowest to exit costs. Exit costs

(switching costs) don't play a significant role in changing a DCS system. Lifecycle costs don't play

a major role; the longer the period, the lower the given priority by the respondents.

At the long phase of the prioritization process, the business case guarantee (9.34%),interoperability (6.88%) ability to execute (5.05%) and exit cost (2.99%) are the most important

criteria. Using a mathematical model, I calculated the influence from every actor for every phase,

in which zero is no influence and five is a veto on every aspect. The control engineer (2.31),

consultant from headquarters (1.68), project manager (1.49) purchasing manager (1.31) and plant

owner (1.31) are the most influential actors.

At the short phase, the functionality (11.50%), technology (10.42%), implementation process

(8.08%), user experience (6.66%) and vendor's vision about automation (5.60%) are the most

important criteria. User experience is the feedback the actors will get from reference visits to other

end user sites. The control engineer (2.34), consultant from headquarters (1.88), purchasing

manager (1.82), plant owner (1.75) and engineering firm (1.58) are the most influential actors.

At the final phase, service and support (10.57%), initial cost (9.57%), training (4.86%);

documentation (4.39%) and on-going cost (4.13%) are the most important criteria. The purchasing

manager (2.41), plant owner (2.40), the control engineer (2.25), project manager (2.17) and plant

manager 2.03) are the most influential actors.

It's not that certain criteria are important only in a certain phase. But, vendors who lack scoring on

these criteria will not proceed to the next stage in the process (Figure 2).


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Between the various industry sectors is a remarkably wide variance in the weight factors for the

initial costs. For greenfield projects, over 90% of all respondents find that they are only interested

in the pure system price or the initial installation price when they select a DCS. Life-cycle costing

(LCC) considerations play no role. The initial costs get the highest weight priority from the group's

headquarters consultant (often an internal engineering group) and an engineering

company/engineering procurement contractor (EPC) (Figure 3).

Figure 2. The importance of specific criteria will vary, depending on

the selection phase of the process.

Figure 3. When buying a system, the initial costs have the greatest weight.


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Improving the Method

To improve the selection method, I propose using a multi-criteria analysis, analytical hierarchy

process (AHP) method (Figure 4), and the presented selection criteria provide a reliable method

for an objective system and partner selection. The application of an AHP model improves the

decision making, and the AHP's systematic approach reduces the time needed to select a

supplier.

Purchasing a DCS system is a balance between costs, returns and risks of migration and

replacement projects. The goal is to choose a supplier that offers the lowest risk in the long run

and best added-value services during the DCS's life cycle. By combining the lowest risk to the

highest (satisfaction) score on the selection criteria, and by keeping the costs as low as possible,

it's likely to result in a recommendation for that particular supplier. The AHP method provides an

objective, systematic approach to achieving this goal.

Willem D. Hazenberg, MBA, MIM, EUR, ING RI, is a senior process control consultant, Stork

Industry Services, the Netherlands.

For more information on this subject, including a PowerPoint summary of Mr. Hazenberg's

thesis, go to www.controlglobal.com/0912_DCS.html. See also the following LinkedIn

group: www.linkedin.com/groupRegistration?gid=142172b

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Exit costs have the least.

Figure 4. Using an analytical hierarchy process (AHP) concept selection

model improves the decision-making process when selecting a DCS,

and the AHP's objective and reliable approach also reduces the time

needed to select a supplier.
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