Live Recording: Managing APM Return-on-Investment (ROI) Risk

Recorded Live at Operational Excellence in Oil & Gas Online - May 4th, 2021

Managing APM Return-on-Investment (ROI) Risk

Asset Performance Management (APM) projects focus on improving equipment availability, reducing lost production, lowering maintenance cost, improving safety, and delivering an overall reduction in equipment related risk.  As a result, APM can create significant value and improve the financial performance of industrial companies. Like all major initiates, APM projects require a value driven justification and the business case is the tool used to identify, quantify, and communicate value to leadership.  These business case results are quantified as NPV, IRR, Breakeven analysis, etc., and typically offer very attractive returns.  However, based on past maintenance, reliability and asset management project returns where projects did not deliver the promised ROI, management often views ROI projections as “risky business”.

This session will address the elements of an APM business case, and common reasons that some APM projects underperform promised results.  Risks common to delivering projected ROI will be discussed and applicable risk management tools and techniques to identify and mitigate potential risks will be reviewed.  Special emphasis will be given to enlisting senior management assistance in management ROI risk.

Learning objectives:

• Review the elements of a business case
• Understand ROI Risk; definition, estimating challenges, and quantification techniques
• Recognize common risks that impact APM project ROI and techniques to mitigate these risk
• Discuss how to create leadership alignment to support ROI risk mitigation

Paul Casto, APM Industry Principal, GE Digital