Justifying Your Modernization Project to Management

Part Two of our Control System Modernization Blog Series

Control System ModernizationWhile having an obsolete ICS is troublesome, it’s often hard to get the money to upgrade your system because management doesn’t understand automation. “Why fix what’s not broken,” management tells you. You won’t get the cash needed to fund your control system modernization unless you justify your project in business terms that make management understand the problems with your current system and the benefits of a modernized system.

To do this, you need to capture the total cost of ownership (TCO) for maintaining your legacy system and compare this to the total cost of a control system modernization project. Here are factors to consider when calculating your TCO:
• Cost to maintain obsolete system
• Replacement and spare part acquisition
• Cost of downtime incidents
• Quality issues
• Energy Costs
• Operating Costs
• Employee training on old system

Calculate all these costs associated with maintaining your current system. Now compare this cost with the cost of a control system modernization project. Maintaining an obsolete system costs you money that could be going to fund a modernization project. While control system modernization projects are typically high in cost, they will give you a ROI that could pay for the project within a few years. Here’s some ROIs and business drivers that an upgraded system will give you:
• Increased productivity and throughput
• Increased safety and security
• Quality improvement
• Energy management
• Reduced operations costs
• Innovation required in today’s marketplace
• Combat aging workforce dilemma

Corporate doesn’t always understand the downfalls of obsolete technology and the many benefits to increasing automation in your plant. Instead, they see a high project cost. To effectively get a control system modernization project approved by corporate, you’ll want to demonstrate the business benefits that will increase revenue or reduce costs in your plant. These business benefits should not just include your new systems features, but also the cash flow the new system will bring. By taking the time to do calculate your TCO vs. the project cost and ROI, you will clearly show management why modernization is preferred over migration. Once your control system modernization project is approved, you have more decisions to make on how your improvement project will be implemented.

 

Check out Blog 1 in this series, here.

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