With good data, better asset decisions can be made, ensure investment and achieve Defence goals.

Thinking

Data driven decisions: The future of decision making on the Defence Estate

This article is the third in our three-part series on ‘Data and digital smarts for better asset decisions in Defence’. Read article one: ‘Capturing data to enable Defence strategy, capability and operations’, and article two: ‘Making sense of data for more valuable insights across asset management and operations.’

Data-driven asset management will be a critical enabler in meeting the performance challenges of tomorrow. Asset-intensive industries in particular are increasingly using data to optimise asset-related decisions. They are doing so by taking advantage of rapidly evolving digital technology such as 5G, IoT, cloud storage and processing, edge computing machine learning and scalable, interoperable platforms that enable rapid solution development and deployment.

With this technology at their disposal, it becomes feasible and economically viable to collect, analyse and interpret detailed information about the condition, costs, usage and performance of assets. Good data and rigorous analysis yield valuable insights, and can help remove subjectivity and inconsistency from decision making and asset management.

Some organisations in asset intensive industries are now seeing true value realisation from making better investment allocation decisions, leading to outcomes such as improved project execution, improved asset and operational performance, and optimisation of the interaction between people and assets.

One of the world’s largest heavy earth moving equipment providers needed to improve their rate of return on capital and keep their assets longer. This longer ownership meant additional failures would occur, and therefore each site would have to be much better at managing the assets reliability and availability to meet customer expectations.

Over four years, this organisation changed the way assets were managed across their business. Using intelligent asset management approaches, with data at the heart, the organisation fundamentally changed their cost of capital and de-risked their entire asset portfolio. Rather than thinking about assets as a whole, massive gains were made by using component analytics i.e. breaking each asset down into individual components within the asset portfolio, for optimisation of equipment life and reinvestment over time.

This different asset management model – moving from a view of managing 800 heavy mobile equipment assets to managing 12,000 major components – brought greater efficiencies at scale, improved the supply chain to better manage risk and created greater sustainability within their business model to adapt to changing market forces and customer expectations. An increase in the return on capital from 6 per cent to 22 per cent was achieved by industry leading asset management and digital practices. This built a competitive advantage that reliably delivers a lower capital intensity profile for this organisation and helps to retain their position as the supplier of choice in the resource market.

Case study
Harnessing insights to change the way assets are viewed

Managing heavy mobile equipment – Aurecon

Defence’s data driven asset management opportunity

Australia’s Defence industry can certainly learn from the experience of asset-intensive organisations in adopting data-driven asset management – and take this to another level. With its vast estate and the nation’s biggest portfolio of assets, Defence has the opportunity to build a uniquely valuable data resource, and then leverage this to develop world-class asset management capabilities.

With focused analysis of this data, Defence will be able to quickly pinpoint problems, identify and embed best practices, and gain insights into the complex relationships between assets and the people that use them.

This will yield significant benefits given that the reliability, performance and efficiency of all assets and people is of utmost importance to Defence, underpinning its capability, sustainability and efficiency. It is also vital to ensuring the wellbeing and safety of its people and the communities within which it operates.

Making better asset decisions to achieve Defence’s strategic goals

Defence’s ability to meet its strategic goals and achieve desired outcome in areas such as Capability, Sustainability, Cost and People, is highly dependent on many strategic, tactical and day-to-day decisions in key areas, such as:

Making better asset decisions – Aurecon

  • Investment allocation – ensuring that we invest in the right projects to maintain and grow capability through Defence assets (sustaining capital and expansion capital)
  • Project execution – ensuring that projects are efficiently and effectively executed
  • Asset and operations management – optimising the performance of assets
  • Human asset management – creating policies, processes and working conditions that optimise the safety, wellbeing and performance of our people and community

The quality of this decision making is heavily influenced by the quality of the data and analysis that informs the decision-making process, as illustrated in the figure below.

Decision making process – Aurecon

There are many ways in which the analysis of relevant data can improve the quality of decision making and help secure desired outcomes across these key areas.

Harnessing insights for investment allocation

Using data analytics to inform decisions across Defence assets ensures that investment is prioritised where it is needed most to maintain and grow capability. Key areas include:

  • Asset criticality assessment: While Defence already undertakes asset criticality assessments, data can be used to test and refine these assessments. For example, data-driven simulations and scenario analysis can be used to test and quantify operational capacity given the failure or degradation of specific assets or combinations of assets. This will enable more rigorous prioritisation of investments in asset capacity, modernisation, maintenance, redundancy and protection.
  • Asset condition assessment: Accurate and timely assessment and reporting on the condition of assets is required for optimising decisions on asset maintenance, upgrading, decommissioning and replacement. Eliminating ad-hoc decision making greatly reduces risk, avoids unnecessary costs, improves mission readiness and provides clarity on investment priorities across Defence’s enormous asset base. Visibility and constancy of asset information and investments across a large portfolio can be enhanced bringing together relevant data from numerous sources (including contractors and operational systems) and visualising this data in a digital twin of the Defence Estate.
  • Asset reliability: With the right data, it is possible to predict asset failure and intervene early. By shifting from reactive to proactive asset maintenance and sustainment, Defence will be able to better predict what assets are likely to fail (and when), identify the sweet spot for investment and have the robust data to underpin effective predictive maintenance, extend asset life and identify where in the lifecycle an asset should be replaced instead of repaired.

When SA health sought to address the inequalities in the health system between urban and rural communities, they needed to ensure funding was being allocated into the most appropriate works to best support the existing and planned health service delivery.

Using digital methods to capture asset condition data, the information was then efficiently categorised according to 98 classifications across 10 disciplines. This digitally-enabled methodology allowed Aurecon to readily capture a vast amount of asset data from the 75 sites. To enable insights to be gleaned from this data, an interactive digital asset management planning tool was developed.

Managers and planners use this information to inform, prioritise and budget asset renewal and replacement works for subsequent years of the sustainment program. And the data and insights also enable SA health to make more informed decisions to determine which investments will yield the best service outcomes for people in regional and rural South Australia.

Case study
Asset sustainment program for remote healthcare facilities

Digital methods to healthcare system – Aurecon

Digital insights for project execution

Data analysis can also improve the efficiency and effectiveness of project execution for the Defence Estate. Some key areas where digital insights could drive benefits are:

  • Understanding the drivers of project performance and risk: Analysis of the data associated with and generated by asset maintenance and sustaining capital contracts can yield valuable insights that can then be used to improve project design, project management processes, cost and schedule estimation, and risk assessment. Recently Aurecon conducted an analysis of 2848 requirements across 237 GEMS projects, which provided many insights. For example, the highest risk requirements involve the removal of asbestos containing materials. In fact, the median risk score for this type of work (256) is 250 per cent higher than the median risk score for general demolition works (102). Digging deeper into the drivers of this high overall risk score shows that reputation risk, legislative risk and OH&S risk are of particular concern when working with asbestos, whereas those risks are assessed as low for general demolition work.
  • Tie asset management contracts to performance: Asset maintenance and sustaining capital contracts are more compliance driven than performance driven. There is an opportunity to learn from other industry sectors where data is used to develop and enforce performance-based contract structures. These can be used to improve outcomes in terms of quality, reliability, and cost, and can substantially de-risk the ongoing delivery of Defence capability.
  • Project innovation: Data insights allow scope to apply innovation to various aspects of project execution. Examples of project innovation include option evaluation tools, external benchmarking and strong project controls and reporting to ensure that once the prioritised projects are chosen, then each project is done effectively.

Asset and operations management

Understanding how assets perform through powerful data analytics, and implementing automation to make processes more efficient, will help to optimise asset performance over time and minimise consumption across the entire portfolio. Key areas include:

  • Energy and resource consumption: Sustainability is improved, and unnecessary costs avoided by minimising the consumption of energy and resources such as water and consumables. This can be achieved both by making the right asset investment decisions (e.g. energy efficient buildings and vehicles), and by optimising the way in which assets such as HVAC systems and water infrastructure are used, controlled, and maintained.
    At a basic level, effective reporting and analysis of consumption data can be used to track progress against sustainability goals and pinpoint where resources and money are being wasted, such as poor control of HVAC systems or leakages in water pipes and taps.
    With the right data, advanced analytical techniques such as machine learning can be used to optimise the operation of assets such as HVAC systems and water pumps, minimising energy consumption without compromising comfort, performance, or safety. For example, Aurecon demonstrated how using a machine learning model to optimise HVAC systems across data centre assets resulted in a predicted reduction in energy usage of 15 per cent.
  • Achieve climate change goals, while maintaining mission critical capability: We all have a role to play in decarbonising our way of life over the coming decades, and data can be used to help with measuring our emissions, identifying technology to invest in, and determining a path to net zero. For Defence, climate change brings many risks, and will be essential to understand its impact on Defence’s assets and people, and consequently its capabilities. Data can provide the key to unlocking insights around the impact of climate change and extreme conditions on asset integrity and performance, energy consumption, the health, safety and performance of personnel, and the operating environment (e.g. vegetation, pests and disease). With its vast and diverse asset base and operational footprint, there are endless examples where Defence could lead the way as a living laboratory.
  • Automation: With the right data and digital technology, many processes can be automated to reduce operational cost, improve reliability, and shorten timeframes. Automation can be small scale such as automation of parts of a process (e.g. detecting cracks in a façade), or larger scale where entire processes and systems are automated. Assets an also be enabled to report on their own health and performance, and self-optimise through an automated feedback loop.
  • Learning from best practice: Analysis of data across a large asset portfolio makes it possible to identify best performance and best practice – for example looking into why one building is performing so well and answering: “what are they doing, is it to do with building characteristics, or is it their behavioural or operational practices?” Whatever the answer, identifying the good and bad outliers and delving into the drivers of these performance differences is a great way to unearth opportunities to deploy best practice across the Estate.

La Trobe University is committed to future sustainability by ensuring campuses are carbon neutral by 2029. Aurecon is working in partnership with the university to analyse and implement large-scale carbon emissions reduction initiatives in pursuit of achieving carbon neutrality. Initiatives under consideration include solar photovoltaic farms, a battery energy storage system, lighting and HVAC energy efficiency, a community-owned energy generation network and alternatives to procure electricity, such as entering into power purchase agreements.

One of the key projects is the La Trobe Energy Analytics Platform using AI and machine learning, which monitors consumption patterns and building performance at all campuses, enabling the university to make decisions on initiatives that reduce energy consumption. These initiatives respond to the risks of climate change and provide pathway options to improve sustainability and lower carbon emissions.

Case study
Data for better decisions on the road to Net Zero

Data for better decisions to Net Zero – Aurecon

Human Asset Management

Using data analytics to understand people, optimise their work environment and design to their needs will help to optimise the safety, wellbeing and performance of people and the community.

  • Understanding human assets: People are Defence’s most precious assets and, as with all assets, it is essential to know where to invest in them and how they can be managed to maximise capability. Analysis of the right data can provide deep insights into the condition of personnel (mental and physical health), their performance and their contribution to capability outcomes, and thus pinpoint priorities for action. It can also provide hard evidence into the effectiveness of specific programs and human resource management practices.
  • Optimising the working environment: Data about the working environment can be used to improve employees’ wellbeing, safety and performance, and a number of studies outlined below have shown this. From understanding the impact on people when systems break down, to improving the comfort of a working environment, insights into a great many aspects of the workforce experience can be gained from analysing the right data. For example, air quality can be improved by tracking CO2, dust particles, volatile organic compounds, and humidity, and microclimate modelling can help to optimise building design for occupant comfort and productivity. In the context of the COVID pandemic, we now know that CO2 levels in buildings can be used as an indicator of how well ventilated they are.

With good data, good decisions can be made to achieve these outcomes for people. The health and wellbeing of ADF staff is essential to Australia’s Defence capability and capacity. There are now well understood associations between people’s experience in the working environment and wellness, productivity, and retention. According to the Green Building Council of Australia, optimising Indoor Environmental Quality increases productivity by up to 11 per cent.

At the Aurecon Centre in Melbourne, the use of intelligent temperature, air quality and noise control systems has resulted in productivity increasing by 8 per cent and staff health increasing by 11 per cent. Research by Harvard University found that people working in high-performing buildings report 30 per cent fewer sick building symptoms, perform much better on cognitive tests and are more satisfied with their work environment.

Case study
Improving staff experience leads to better outcomes

Optimising indoor environmental quality – Aurecon
  • Feedback and learning: Data can be also used to identify and address user human behaviours that affect the condition and performance of other assets. For example, driving behaviour can have a major impact on vehicle fuel consumption and maintenance costs, and of course on operational performance and safety. Through a qualitative study of 34 drivers, Aurecon helped one of the world’s largest toll operators understand underlying behaviours and emerging patterns to mitigate congestion. Pulling this data into a visual summary helped to convey complex data in a way where decisions could be made easily. Behaviours that have an impact on resource consumption (e.g. leaving air conditioners or lights on for extended periods when facilities are unoccupied) or asset health (e.g. failing to report malfunctioning or damaged equipment) can be influenced by providing feedback and incentives to adjust these behaviours.
  • Design data driven precincts: with a human focus, which objectively considers how people move and interact with each other and with assets; and how Defence bases link with nearby communities. Data helps with decisions to improve design and enable Defence to operate its Estate as a better functioning precinct and as a good citizen within the community.

As two of the most important gateways in Australia, facilitating the movement of people around Sydney Airport and Port Botany precinct is critical. With important utilities, rail freight lines, residential and business areas, and airport related restrictions, the precinct is a complex and challenging area.

Aurecon took a digital approach to this challenge, using the visualisation expertise of our inhouse agency – Unsigned Studio and Aurecon Digital Tool siteLab® to bring the project to life. The interactive model was used on site, communicating several major constraints, including gas, rail, sewer, flood and aerospace, and detailed some of the construction staging of the bridge structure. It led to a successful collaborative experience with the client and construction teams, and helped to improve traffic flow to the busy precinct. It’s a best-in-class example of how bringing several kinds of data into decision making can create trade-offs and optimise designs.

Case study
Data for precinct decision making

Airport East Precinct, Sydney, Australia – Aurecon

The road to data driven asset performance: three practical steps to take now

As discussed in our previous articles, there are the two fundamental buildings blocks Defence needs to have in place in order to use data to achieve its strategic objectives: capturing the right data with the right tools (aka the fuel for the insights engine) and making sense of that data – building a strong analytics capability (aka the insights engine).

But at a practical level, what should Defence do to move forward with this opportunity? We suggest three simple and practical steps to start with:

Road to data driven asset performance – Aurecon

  1. Define value and purpose: This is fundamental for asset performance in any scenario. Many organisations face challenges in making value cases and often focus on the wrong problems. But when you know your value and purpose and have the information and analytics to go with it, it enables high agility, and allows the business to adapt to changing conditions – which for Defence is crucial to achieving strategic and operational goals.
  2. Shift mindset to understand that the challenge is not insurmountable: Be comfortable building the ecosystem and foundations while you are managing operations, and work with what you have as a start. With a strategically designed program, it is possible to get value with what you already have and there are ways of attaching a degree of confidence to the analysis to get real outcomes. The key is to get started – you don’t need 100 per cent of the data on day one to obtain valuable insights from data analysis and take the first steps towards a data-driven decision making culture.
  3. Create strong data teams and capability: Provide strategies to ensure the right people, processes and tools are in place to understand what data is most useful to enable better decision making about assets and business purpose, and maintain Defence ownership of critical data. Creating an internal data analysis capability is an achievable first step to get into the data, understand what the questions are, if they can be answered or supported with data you have, and take a view on what additional data may be needed to collect going forward, and how to structure and analyse it. Also, bringing in expertise to create quality control at the data entry point is essential. Data quality is a significant challenge, especially with data that has come from multiple parties and contractors. Bringing in expertise to ensure robust data quality up front, creates a strong foundation and gives teams confidence in the data and analysis to make informed operational decisions.

Managing assets into the future starts now

Data underpins the ability to make informed decisions, quickly. And with rapid advances in data capture, processing and analytics technology, managing assets without data – or with bad data – will hamper an organisation’s ability to achieve its strategic and operational goals. With the vast scale and diversity of its assets and infrastructure, Defence is in a unique position to fully realise the value that data can deliver.

Now is the time for Defence to embrace digital technology to enable cost-effective data-driven asset management. This will improve Australia's Defence capability, reliability and sustainability through the efficient planning, management and operations of the critical assets, infrastructure and people that support it. Taking simple, practical steps will allow Defence to start this value realisation journey by extracting insights from the from data it has today, while building a strong value-focused data capture and analytics capability for the future.


About the authors

Eric Louw is Managing Principal, Data and Analytics at Aurecon. He has thirty years of international experience with leading management consulting firms and as an executive in the telecommunications industry, focusing on business strategy, technology strategy, digital transformation, and data analytics. He is the co-author of three business books, as well as numerous articles and academic papers.

James Trezona is Aurecon’s Industry Leader, Defence Design. With a background in structural engineering, he has over 29 years’ experience across the Defence, Health, Education, Commercial and Government Sectors. Often acting as the Project Director of large, multidisciplined teams, James adopts collaborative design processes and high-performance team philosophy to achieve integrated design solutions.

Elisha Bellchambers is a Principal and QLD Asset Management and Performance Leader, with more than 20 years of experience in private and public sectors. She has worked with clients across the globe across the areas of business financial performance, business strategy, stakeholder management, business development and program management.

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