Interoperability

An AVEVA White Paper

Neil McPhater
Marketing Manager
AVEVA Solutions Ltd
Published April 2009

Interoperability - an AVEVA White Paper

Contents
Page
Introduction

1. Interoperability Today
1a. Cost of inadequate Interoperability
1b. Barriers to Interoperability

3
4
4

2. Macro-economic drivers of Interoperability

3. Business Value
3a. Digital Convergence
5 Steps to Value
3b. Potential Value from Interoperability

6
6

Market Context
4a. Market Trends
4b. Evidence for Digital Convergence today

7
7
8

5. Interoperability infrastructure
5a. Engineering data standards and their
market adoption
5b. Standards-based Interoperability Layer
5c. Technology Platform
5d. Interoperability Partners

9
9

9
10
10

6. Conclusion:
No Limits to value from Interoperability

11

References & Bibliography

11

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Interoperability - an AVEVA White Paper

Introduction
This White Paper sets out to define and describe software
interoperability within the context of the Plant, Marine and
Building & Construction industries today and in the future. It
identifies a long-term business trend and demonstrates how the
cross-functional team acts as its agent of change. It outlines a
business model which defines both interoperability value derived
pragmatically today and the business mechanism for unlocking
value tomorrow. Finally, this paper outlines the sort of
interoperability infrastructure required to overcome the
complexities of interoperability and disentangle the spaghetti of
structured and unstructured data.

1. Interoperability Today

What is certain is that

information from different
sources is very hard to
integrate despite the value of
the sum being greater than
that of the constituent parts the description information
silos is an apt analogy...

Interoperability is a term used increasingly in engineering

industries to refer to the sharing and exchange of digital
information. Its definition, however, is rather vague. What is
certain is that information from different sources is very hard to
integrate despite the value of the sum being greater than that of
the constituent parts - the description information silos is an apt
analogy. Creating a complete knowledge base from disparate
engineering information can seem like knitting with spaghetti.
Wikipedia defines interoperability as a property referring to the
ability of diverse systems and organisations to work together. More
specifically, interoperable computer systems must defer to a
common information exchange reference model. The content of the
information exchange requests are unambiguously defined: what is
sent is the same as what is understood.
A separate definition (ref.1) defines interoperability from three
interrelated viewpoints technical, cultural, and working practices.
From an information technology viewpoint, interoperability is the
ability to manage and communicate electronic data among
collaborating firms. From an organisational culture viewpoint, it is
the ability to implement and manage collaborative relationships
among members of cross-functional teams that enables integrated
project execution. These views can be brought together at a
working practices level to define interoperability as if all members
of a team can freely exchange data across different software
products and platforms, every member of the team can better
integrate the project delivery.

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Interoperability - an AVEVA White Paper

So interoperability is a desirable goal but, in spite of this and the

advances in IT capabilities, we find inadequate interoperability
everywhere. This is becoming a serious obstacle in the industry and
a number of studies in the last five years have attempted to qualify
the issues and quantify the costs.

1a. Cost of inadequate Interoperability

A report from NIST (ref.2) refers to the US capital facilities industry.
It estimates that inadequate (software) interoperability may cost
$15.8 billion annually in America. This corresponds to 1-2% of the
industrys entire annual revenue! Significantly, almost two thirds of
these costs are borne by Owner Operators. Engineering Procurement
and Construction contractors (EPCs) are also affected, but less so.
ENR magazine (ref.1) believes the potential dollar losses are twice
as big as the NIST estimates. This view is reinforced by other recent
reports (ref.3) (ref.4).
These reports suggest that the greatest pain is currently being felt
in the Architecture Engineering Construction (AEC) industry, but
many problems are shared with the Plant industry.

...it estimates that

inadequate (software)
interoperability may cost
$15.8 billion annually in
America. This corresponds to
1-2% of the industrys entire
annual revenue...

1b. Barriers to Interoperability

There are many limitations or barriers to interoperability, but three
principal categories may be identified. Firstly, information
technology is a key limitation, arising from incompatibility across
software products. This involves a number of factors; primarily,
incompatibility between the software product data models.
Engineering data standards are intended to address this issue but,
perversely, have also been part of the problem. In the 1990s the ISO
10303 STEP international standard was hailed as the standard for
intelligent engineering exchange. However, there was no reliable
compatibility between data models from different software product
types.
A further hindrance to the use of standards to support exchange
has been the low acceptance within the market. A technically
excellent data standard is worthless if it is not implemented
successfully by stakeholders like Owner Operators and EPC
contractors.
Secondly, organisational cultural boundaries can limit
interoperability. Such boundaries include geographical distance as
well as functional ones between different offices, sites, time-zones,
divisions etc. They also include cultural inabilities to collaborate
with third parties.
Lastly, rigid working practices also create barriers to
interoperability if existing business processes are cast in stone.
Any such organisation will have great difficulty in establishing
flexible, cross-functional teams. One common impediment is the
failure to stipulate applicable data standards on commercial
contracts. This can be significant when close co-operation between
contractors is necessary during the contract, or during project
handover to the Owner/Operator, when a lot of valuable
engineering intelligence can be lost.

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Interoperability - an AVEVA White Paper

2. Macro-economic drivers of Interoperability

To look into the future we must first understand what is driving
changes in the global economy. There are three main macroeconomic drivers. These are globalisation, digitalisation and the
industrialisation of emerging markets. In the last year these have,
unfortunately, been joined by the economically and financially
disruptive credit crunch.
Driven by continually reducing transportation and communications
costs, globalisation is the extension of markets across the globe,
driven by increased flows of capital, goods and services.
Globalisation develops through the reconfiguration of supply and
value chains, including outsourcing, and freedom of choice both in
markets and at the ballot box.

The UK rail network, 1960

Technology continues playing a full part. Digitalisation and the

implementation of information technology have been driven by
dramatically falling telecommunication and computing costs. In his
recent book The world is flat (ref.5), Thomas Friedman describes
the convergence of a number of flatteners to create a whole new
digital platform which is global, web-enabled. and supports
multiple forms of interoperation and collaboration.
In synopsis, digital convergence is one of the most important
drivers affecting the business environment today. Its key agent of
change is the IT-enabled networked team. Such teams can span
functions and organisations, facilitating changes in working
practices that can deliver very high value. So how valuable can such
networks be?
In fact, the value of a network grows disproportionately with size.
Historically, railway networks have demonstrated this, and the
importance of market-acceptable standards. A century and a half
ago, only after common agreement on the standard gauge track
were all the English railway Owner Operator companies able to
deliver interoperable services on a single national network. As a
result, the railway market increased disproportionately. In todays
digital world, examples includes mobile phones (based on the GSM
standard) and download music sales (based on MP3).

...the value of a network

grows disproportionately
with size... railway networks
have demonstrated this... a
century and a half ago, only
after common agreement
on the standard gauge track
were all the English railway
companies able to deliver
interoperable services on a
single national network...

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Interoperability - an AVEVA White Paper

3. Business Value

3b. Potential Value from Interoperability

Unlike the industrial economy and the railway network, in the

information economy businesses, markets, and products and
services are interrelated (ref.6). This has two potential effects.
Firstly, it opens up the possibility of collaborative advantage in
addition to competitive advantage. Secondly, new market
opportunities may be created as the value chain is reconfigured by
digital convergence.

One absolute pre-requisite for value from cross-functional

networked teams is common engineering data standards. Given
this, a number of key drivers emerge which can create value from
networks. These are shown graphically below.

3a. Digital Convergence Five Steps to Value

HIGH
Transform Market

Level of Business Transformation

The most important sources of value through interrelatedness are

networks and operational compatibility. Significantly, the more
users there are in a network the disproportionately greater becomes
its potential value. Specific requirements for compatibility include
standards-based interoperability, collaborative skills (with the
ability to partner across functions, boundaries and organisations),
and information content. IT-enabled, cross-functional networked
teams thus have considerable potential to reconfigure working
processes, remould organisations, and transform markets.

IT-enabled Business Transformation Added-value

Engineering Value Chain
Network

Reconfigure Value Chain

Exploit Value Chain

Exploit Integrated Products

External to
Organisation
Internal to
Organisation

Data Standards
Exploit
Single
Product
Exploit
Single
Product

LOW

One particularly illuminating business model articulates digital

convergence as adding value in five steps. It is called IT-enabled
Business Transformation and is illustrated below. (For a full
explanation see the original reference (ref.7). In general, the
greater the business transformation that takes place, the greater
the business value that can accrue via the networked team. The
Five Steps are:

IT-enabled Business Transformation

Engineering Value Chain

LOW

Potential Business Value

HIGH

Digital convergence is inexorably driving the global business

environment up through the interrelated steps. Importantly,
network value increases as you climb the steps - initially internal to
the organisation (competitive advantage) then, later, external to
the organisation (collaborative advantage with partners). The value
sought by the Owner/Operator or EPC depends on their business
ambition attenuated by their risk-reward strategy.

HIGH
Level of Business Transformation

Transform Market

Reconfigure Value Chain

Exploit Value Chain

Exploit Integrated Products

External to
Organisation
Internal to
Organisation

Exploit Single Product

There are a number of specific qualifiers which determine network

value. The first is its number of users. As you climb the steps the
number of network users increases. Remember that the value of a
network increases disproportionately the greater the number of
users.
The second value qualifier is the number of sources of engineering
content; that is, data from design software products as well as
lifecycle information sources. It is also clear that, as with network
users, the greater the number of sources of engineering content
that can be integrated, the greater the potential to deliver value.

LOW
LOW

Potential Business Value

HIGH

However, business transformation is not an overnight process it is

a long strategic process.

Finally, the third qualifier of business value from the network is the
number of boundaries spanned by the networked team. As
mentioned above, this can include the number of geographical sites
spanned, functions crossed, organisations covered.

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Interoperability - an AVEVA White Paper

4. Market Context

For the Plant design market the following trends exist:

The Gartner Report (ref.3) cited previously surveyed the business

environment of the AEC market for market trends worldwide.
Gartner defined this market as comprising four sub-markets:
Architecture, Plant design, Civil applications (including Building
design) and Facilities management. The key market trends
identified are as follows:

T A lifecycle approach to information management must be an

integral part of any software vendors product set. Open access to
the widest possible range of information sources is key.
T Data integration between Owner Operators and EPC companies
will become an increasingly important issue and will include a
requirement for two-way data interchange from the outset.

4a. Market Trends

For the Architecture and Building Design market the following

trends exist:

For all AEC markets the following trends exist:

T The Building Information Model (BIM) is now beginning to have a

substantial business impact across this complete value chain.
T The software vendors who will be most successful are those that
supply integrated solutions across the complete lifecycle. These
solutions will attract new types of customers thereby increasing
the market

T In general, Owner Operators will exert increasing influence over

their chosen markets as they have the biggest stake in their own
complex engineering projects, buildings and operating assets.
T Globalisation of both Plant and AEC projects is driving the
development of software to overcome geographical barriers to
interoperability.
T Interoperability with the ever-increasing quantities of both
structured and unstructured legacy data demands open access.

Another way to look at digital convergence is to consider the market

diagrammatically, as illustrated below. Until quite recently the
markets for Plant, Marine, and Architecture and Building design
were relatively discrete, with little overlap. However, this is
changing.

Digital Convergence and Markets

Marine
Design
Software
Market

Building
Design
Software
Market

ISO 15926
market (Plant)

BIM market
(Buildings)

As-built models
(scans, photos, terrain, maps)

Increasing move
towards industry
data standards away from
proprietary formats

Increasing move
to software
products with
data models

FUTURE

Converged software markets for

Plant, Marine & Building design in engineering
and business domains

TOMORROW

Mechanical Equipment

TODAY

Plant
Design
Software
Market

Increasing need for

managing large volumes
of data on global
engineering projects

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Interoperability - an AVEVA White Paper

...site surveying has recently received a considerable boost with the

introduction of high-bandwidth laser scanning, dramatically reducing
the costs and increasing the precision of as-built data capture...
As well as the three markets mentioned previously, the business
environment also includes mechanical design and the as-built
engineering domain. A recent report (ref.8) considers the overlap
between mechanical CAD and plant layout tools for Power Plant
design, and how to get the best value respectively from mechanical
and plant software products. Separately, site surveying for as-built
surveys has recently received a considerable boost with the
introduction of high-bandwidth laser scanning, dramatically
reducing the costs and increasing the precision of as-built data
capture.
There are also a number of long-term trends (shown in the diagram
as downward-pointing arrows.) First, there is the move away from
proprietary data standards towards market-acceptable
international standards. Second is the move towards data-modelled
software products with a high level of engineering intelligence. This
reflects a move away from 2D CAD draughting with its very much
lower level of engineering intelligence. Thirdly, there is the need to
process and manage ever-increasing quantities of data.

4b. Evidence for Digital Convergence today

So much for the business theory! But what is the evidence to
support it in todays information-intensive engineering businesses?
There are many examples of digital convergence today. These
include:
1. In the Plant market, handover is the intersection between an
assets design & construction phase and its subsequent
operation. Digital handover is proven to have high potential for
replacing existing paper-intensive processes with improved
automation in the population of Operations systems and tools.
2. The emergence of BIM as an international engineering data
standard. A recent article in The Economist (ref.9) stated that
Aircraft and cars are designed using elaborate digital models.
Now the same idea is being applied to Buildings. It also
observed that very complex new buildings, such as the
Guggenheim Museum in Bilbao and the Walt Disney Concert Hall
in Los Angeles might not have been possible to build at all
without the help of BIM.
3. The overlap between the Plant and Marine markets is best
exemplified by Floating Production Storage & Offloading (FPSO)
vessels; offshore Oil & Gas production facilities that extract
underwater petroleum reserves. They are, in effect, moored oil
tankers with oil and gas processing facilities designed into their
structures.
4. Last year Bentley Systems Inc and Autodesk Inc surprised the
market by announcing (ref.10) that they had agreed to
collaborate to support interoperability between their software
products.

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Interoperability - an AVEVA White Paper

5. Interoperability Infrastructure

5b. Standards-based Interoperability Layer

So what sort of infrastructure is needed to deliver value on

engineering projects and operating assets today without
compromising the future potential of interoperability? Certainly it
must overcome the barriers to interoperability described above, but
it must also include appropriate data standards, an Interoperability
Layer, a robust and flexible Technology Platform, and supporting
interoperability partners.

Within its widest context a standards-based Interoperability Layer

should act like a multi-lane highway bridge between the external
business environment and a Technology Platform. On this Platform,
information is harnessed with consistency and full accessibility.

5a. Engineering data standards and their market adoption

After recognising the shortcomings of the ISO 10303 STEP standard,
in the mid/late 1990s the Norwegian POSC CAESAR Association
(PCA), with able assistance from the Dutch SPI-NL consortium set
about rectifying the non-compatibility issues. Building on the
foundations of STEP they established and developed ISO 15926 for
the Offshore Oil & Gas industry. This has now achieved the status of
an international standard.
Over the last few years, in the process plant industry, FIATECH has
brought fresh American vigour to accelerate the deployment of ISO
15926 (ref.11) and ensure its wider acceptability. This AmericanEuropean double act is speeding up the adoption of marketacceptable standards.
As PCAs efforts over the last decade have shown, the development
and successful implementation of such data standards and
methodologies as ISO 15926 and BIM takes time and effort. The
extent of the Norwegian ambitions is exemplified by their offshore
vision of the future that is aiming towards a digital infrastructure
and information platform to enable unmanned operation, from a
shore-based control centre, of heavily instrumented Oil & Gas
production platform facilities in the North Sea and Barents Sea.
Market adoption by industry stakeholders also does not happen
overnight. Engineers are justifiably cautious about adopting new
practices. This is strikingly illustrated in the Figure below (ref.12)
which envisages that market adoption of BIM by structural
engineers will not reach a tipping point until after the year 2015!

Percentage of industry

Structural Engineer projects BIM adoption

by structural engineering industry
100
80
60
40
20
0

2000

8%
2010

2020

2030

...a standards-based
Interoperability Layer should act
like a multi-lane highway bridge
between the external business
environment and a Technology
Platform...
While it is important to have a clear vision for the future, it is vital
to get value from appropriate engineering data standards today.
This demands a pragmatic approach to exploiting workable
standards right now while continuing to drive the development and
acceptance of industry-wide data standards.
This leads to the need for a pragmatic, standards-based
Interoperability Layer. It must be able to deal with the spaghettilike complication of todays business environment and bring order
out of the chaos of heterogeneous information on topical industry
project and operating assets right now. It must also be able to be
extended and stretched to meet future demands for improving
existing standards or introducing new ones.
The diagram below illustrates a sub-set of an Interoperability Layer
in this instance an as-designed domain sub-set. It supports
appropriate engineering and commercial data standards in
different markets Marine, Mechanical, Plant, Building &
Construction.

Year

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Interoperability - an AVEVA White Paper

5c. Technology Platform

5d. Interoperability Partners

The Technology Platform must be easily and quickly implementable,

and provide a number of basic capabilities across all engineering
domains and related business functions. As outlined above, the
Platform must be able to support an extensible Interoperability
Layer which is based on a number of engineering data standards. It
must also be able not only to manage vast amounts of information,
including documents, but also to share and exchange this
information with a high degree of integrity and no loss of
engineering intelligence.

There are a number of types of Interoperability Partners. These

include partnerships for providing information technology, for
integrating engineering content, and for business implementation
on engineering projects and operating assets.

The Platform must also be able to support networked teams as they

adapt their business practices and workflows to exploit emerging
business opportunities.
The Platform must be tightly integrated with the Internet and the
World Wide Web to take full advantage of the Flat World envisaged
by Thomas Friedman. This will include sophisticated levels of access
to support the work processes of networked project teams, fleets of
operating assets, organisations and business units.
The Platform must be able to support the development of new
software products which can take advantage of the Platforms
capability.
Finally, the Platform must be able to incorporate third-party
information technology which strengthens the Platform and adds to
its capability and not solve just the Platform providers own
interoperability issues. This is described in paragraph 5d. opposite,
under information technology partners.

Hull
Structure

Mechanical
Equipment

E&I

3D
Piping

Information technology partners bring specific technologies into

the Technology Platform, increasing its integrated capabilities and
its potential to deliver more value. Such technologies might include
database manipulation, document management, engineering data
translation and workflow management.
Engineering content integration partners are those with specialist
competencies in particular software products and/or information
sources. Relating to the Interoperability Layer diagram below, such
partners are likely to include those who support such engineering
and commercial content as:
T
T
T
T
T
T
T

ships hull structure

mechanical equipment
electrical and instrumentation
3D piping
P&ID schematics
3D steel structures
as-built models

Business implementation partners supply extra resources to scale

up interoperability implementations on customers engineering
projects or operating assets. Each customer, whether Owner
Operator or EPC contractor, will have his own specific requirements.
The value delivered might be at enterprise level or at the level of an
individual asset or engineering project.

P&ID
Schematics

3D Steel
Structure

ERP,
EDMS,
DBs, etc

DCS,
real-time,
etc

Interoperability Layer

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Interoperability - an AVEVA White Paper

6. Conclusion: No Limits to value from

Interoperability
Digital convergence is a long-term business trend which is
inexorably changing the business environment. However digital
convergence is as much about the journey as the destination. For
Owner/Operator and EPC contractor alike, this journey offers the
potential to overcome software incompatibility and progressively
climb the Steps to Value.
Substantial value is already being gained in the Plant, Marine and
Building Design markets by the pragmatic use of appropriate
standards. Wider usage of cross-functional teams and the changing
of working practices are taking greater advantage of the
collaborative power of computer networks. Extensible
interoperability infrastructure appropriate to your business needs
can deliver value both now and in the future. This technical choice
can be reinforced by a contractual one to prescribe appropriate
data standards, such as ISO 15926 and BIM, on planned contracts
for both engineering projects and asset operations.
Your interoperability aim should be No Limits to:
T
T
T
T
T
T
T

functions crossed
numbers of users in networked teams
sources of engineering content
organisations covered
global operation
volumes of data managed, both structured and unstructured
engineering and commercial domains spanned

Your objective should be to start disentangling the spaghetti of

interoperability right now and strive to reach the next value Step
ahead your competitors.

...your
objective
should be to
start disentangling
the spaghetti of interoperability
right now and strive to reach the
next value Step ahead your
competitors....

References & Bibliography

1. The McGraw Hill ENR Technology for Construction report on Interoperability in 2007.
2. National Institute for Standards & Technology (NIST) 2004 report, Cost analysis of inadequate interoperability in the US capital facilities industry.
3. Gartner Report, Market Trends: Full Speed Ahead for the Worldwide AEC market, Sharon Tan, October 2006.
4. ISO 15926 Research Report, Business Advantage. The Impact of Open Standards, Sue Hannay, January 2009.
5. Friedman T L, The world is flat, Penguin, 2005.
6. Scott-Morton M S, The Corporation of the 1990s Information technology and Organisational Transformation, New York, Oxford University Press, 1991.
7. Venkatraman N, IT-Enabled Business Transformation, Sloan Management Review/Winter 1994.
8. Cambashi Limited report M2850, Using mechanical CAD and plant layout tools for power plant design, 2008.
9. Economist, From blueprint to database, June 2008.
10. ENR 8 July 2009. Bentley and Autodesk Agree to Exchange keys to sharing of data.
11. Joint IDS/ADI Project. See respective websites of FIATECH and POSC CAESAR Association.
12. BIM uptake curve source: Structural Engineer.

Page 11

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