Australian Journal of Multi-disciplinary Engineering

ISSN: 1448-8388 (Print) 2204-2180 (Online) Journal homepage: https://www.tandfonline.com/loi/tmul20

How Does Operational Readiness Assist in Asset

Management: It Surely is an Operations Function?

E. Krauss

To cite this article: E. Krauss (2014) How Does Operational Readiness Assist in Asset
Management: It Surely is an Operations Function?, Australian Journal of Multi-disciplinary
Engineering, 11:1, 1-11, DOI: 10.7158/14488388.2014.11464878

To link to this article: https://doi.org/10.7158/14488388.2014.11464878

Published online: 16 Nov 2015.

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technical paper 1

How does operational readiness assist in asset

management: It surely is an operations function?*

E Krauss†
Clough AMEC, Perth, Western Australia

ABSTRACT: The notion of operational readiness gains momentum in all industries and the
public sector. What do we understand of operational readiness? How does operational readiness
fit in with projects? Asset owners/operators specify as part of the project process the need to carry
out an operational readiness review. Project managers who have been asked about the inclusion
of operational readiness activities acknowledge that these days operational readiness is part of a
project delivery. A majority still appear “annoyed” by the distraction of having to deal with the
operations people and their demands during the project. Recent involvement of the author in
operational readiness activities indicate that by and large the elements of operational readiness
are not defined with any clarity or embedded either in the asset owner/operators processes or the
project delivery processes. Operational readiness activities that are carried out add substantial cost
to a project. What is the value added if the processes are not embedded in asset owning and project
organisations? These and many more questions come to mind when discussing operational readiness.
The paper examines the need for operational readiness activities in the project and identifies value
add outcomes that are the compelling reasons for planning operational readiness.

KEYWORDS: Operations; readiness; risk; management; project.

REFERENCE: Krauss, E. 2014, “How does operational readiness assist in asset

management: It surely is an operations function?”, Australian Journal of Multi-Disciplinary
Engineering, Vol. 11, No. 1, pp. 1-11, http://dx.doi.org/10.7158/N13-AM10.2014.11.1.

1 INTRODUCTION prolonged start-up periods are required to rectify

Project delivery has been ailing for a long time. With
increasing complexity of equipment, processes and
deliverables, keeping projects on track and efficient
has also become more complex. There have been
over the years many attempts and improvements
of the projects and their deliverables. In large scale
projects improvements are still not resulting in better
outcomes. It may be said that especially in large
scale process plant projects such as in the oil and
gas and mining industries, public utilities, project
delivery focuses on delivering a scope of work and
a plant (asset) “to specification”. Does that mean that
the plant will function when we start production?
Too many times have we been disappointed that
* Reviewed and revised version of paper originally presented
at the 2013 Asset Management Conference, Melbourne, 3-6
June 2013.
† Corresponding author Ernst Krauss can be contacted at
ernst.krauss@cloughamec.com.au.
issues that were not realised until the facilities
were handed over, capacity shortfalls that required
immediate engineering effort to increase production
rates to nameplate capacity and many more shortfalls
in project delivery. One way to remediate this long
standing problem is explored in this paper, the
inclusion of operational readiness in the project
delivery plan. This requires the project manager to
think differently, delivering a plant or facility that
actually can be operated to specification.
2 WHAT WENT WRONG?
There are many examples in the industrial and
public domain that bear witness to the issues and
problems many experience in respect to operational
readiness and readiness assurance. These two terms
mean different things but are inextricably linked and
closely related.

© Institution of Engineers Australia, 2014 Australian Journal of Multi-Disciplinary Engineering, Vol 11 No 1

2 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
In a recent major project carried out in Australia,
the owner organisation intended to get things right.
The project execution procedure was augmented
requiring the input of operations personnel;
during the project phase and then to implement
a commissioning and start-up process. From past
experience and learning this was seen as major
improvement assuring project success.
Operators were included in the project team starting
their work and input during the design phase,
once the concept selection was completed, process
requirements established and major pieces of
equipment were specified and on order. The operators
participated in risk studies, hazard identification,
and hazard and operability analysis studies. They
were reviewing the control systems design and
the alarm screens and offered improvements to the
way the process was displayed on screen. Towards
the end of the design phase, the project plan called
for maintenance personnel to come on the scene,
build the Asset register for the computerised
maintenance management system (CMMS) and
develop maintenance plans and instructions.
Many engineering changes were documented and
authorised, and piles of technical, operational and
supporting documentation filled the servers.
The commissioning phase identified a number of
technical issues, which caused delays to mechanical
completion and start-up, but gave the maintenance
team a chance to catch up and deliver another 15%
of the volume of work associated with maintenance
strategies, maintenance plans, estimating and
resourcing. When the plant finally started up,
the CMMS was to approximately 70% populated
with asset and maintenance information. Before
introducing hydrocarbons (post-mechanical
completion) for commissioning of the whole
plant, the requirement for an operational readiness
status was identified. At that stage, operators were
trained, maintainers had an idea about the complex
machinery that is part of the process, but only had
fragmented maintenance plans available to them.
After further delays in commissioning an operational
readiness statement was produced and the plant
was pressurised, at which stage further issues
alighted and caused delays in actually commencing
production. Compressors are unforgiving to
installation errors, especially when those are not
found during dry commissioning.
Post-start-up, some human error situations were
identified where people were unaware of specific
requirements to operate or maintain equipment.
In the first year of operation, the cost attributed
to maintenance activities (mostly unplanned) was
approximately 35% higher than budgeted for.
Full facility start-up was delayed by 9 months at
approximately 50% of nameplate capacity production
losses averaged over that period. The project was
declared a success, as it was producing at the lowest
Australian Journal of Multi-Disciplinary Engineering
end of the expected first year performance. Has
the life cycle cost been addressed and considered?
Perhaps project delivery was a success: the plant
started up.
It is not difficult to imagine the issues that arose
in the plant during the early production phase,
when operators had to be trained in all sorts of
different aspects of the process and equipment and
maintenance was required to rebuild the maintenance
plans in year 2 of operation. Close to 32% capital cost
overrun added to the woes of the organisation, as did
some other issues relating to safety and environment.
Still the project was declared a success. Does this
sound in some way familiar?
3 GENERALISED ANATOMY
OF PROJECT DELIVERY
Projects of today, when compared to projects of
30 or 40 years ago, seem infinitely more complex.
The complexity not only relates to technical issues,
but includes relationships with stakeholders,
private and public agencies and multitudes of
suppliers. Establishing effective and efficient project
management is of significant importance, as it directly
relates to the ability of the project team to deliver the
project objectives. By definition, team capability
is about competence of the people involved at all
levels, the resources they have available to perform
their roles and the processes or management systems
they are able to deploy in fulfilling their function.
It is not surprising that project management varies
markedly by organisation and industry (Morgans &
Gbedemah, 2010).
A project is initiated to create new or additional value
and will generally depend on the forecast return on
investment and expectations to help the board or
management team to decide that it is worthwhile.
These expectations become the reason for the project
existence and should be in the terms of reference
all personnel in the project must keep in mind.
A challenge for larger projects with long project
duration and certainly for project managers charged
with delivering the project on time, on budget and
appropriate quality. That leads back to the general
deliverable of projects, namely assets and supporting
documentation so that someone else then can learn
how to operate the hardware and make the widgets.
Considering the example in section 2, the dissection
of the project delivery often found when analysing
project performance and project outcomes points
to many steps that go wrong either individually or
in parallel. A statistic from the National Institute of
Standards and Technology (NIST, 2006) in the US
states that there are only 30% of major projects that
come in on time and budget. Another statistic indicates
that about 30% of project costs can be attributed to
waste: waste in information transmission, waste in
rework and waste in non-productive activities within
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 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
the projects. In Australia we do not have similar
statistics, but if the resource projects which amount
to in excess of A$100 billion are considered, the waste
inherent in project cost alone is staggering.
Asset owners now stipulate that the Enterprise
Resource Platform system requires updating as
part of project delivery, especially the maintenance
management and materials management systems.
Projects often deliver the update of an asset register
and the identification and delivery of spares is a
standard requirement. Maintenance strategies, tasks
and plans are too often still a late delivery and more
often than not incur high cost or are incomplete.
Considerations and estimates of operational
expenditure are often cursory and do not include life
cycle cost calculations and evaluation of best options
based on operating cost and renewal. Decision
making in projects is found to lack in definition and
has no set boundaries, is often made by engineering
judgement and in many instances by perpetuating
decisions made on other similar projects. The chain
of evidence is hardly broken, bad decisions follow
project teams.
In the enlightened environment of operator
involvement in projects we find that operator training
requirements are identified earlier than used to be
the case. Operators especially those that work in a
in a continuous process environment also suggest
to the project teams the ways they would like to
operate a plant or section or process. The decision
on following this advice is not always well founded
and often signifies the lack of operator understanding
of a particular process or variation thereof. Often
bad practices are found to be perpetuated in this
fashion also.
It is not uncommon to find that stakeholder
requirements are changed during a project with
little feedback and consensus from those who
identified the need for the project. Project managers
often feel the obligation to deliver the asset within
Figure 1: Life cycle cost commitment by project phases.
Australian Journal of Multi-Disciplinary Engineering
3
the budget constraints, as it is difficult in their eyes
to ask for more funds from owners. The results are
documented in the public domain as failures to
meet stakeholder objective and in many industry
sectors manifest themselves in reduced output and
requirement to finance costly repairs and upgrades
to meet the initial nameplate capacities (which were
subject to the project delivery in the first place).
The UK Association of Project Management (2004)
has decided to define governance requirements
for projects, based on corporate governance
requirements. These project focused governance
definitions are intended to eliminate the situations
where far reaching decisions are made in projects
without the appropriate stakeholder/owner
authorisation. Project governance is described as the
“areas of corporate governance that are specifically
related to project activities. Effective governance of
project management ensures that an organisation’s
project portfolio is aligned to the organisation’s
objectives, is delivered efficiently and is sustainable”
(UK Association of Project Management UK, 2004).
While there is a great focus on managing project
risk, the assessment of the likelihood of delivery
of an operable and sustainable solution is not so
often carried out and less often documented in
form of competency requirements of all project
team members. Project internal risk assessment
must include the risk arising from personnel
competency, whether engineering, maintenance
or operations staff, or personnel co-opted from
the owner’s organisation. The above observations
have been collated over a period of time for project
remediation work in Australia, Asia and UK. If
these points are not compelling enough to consider
a change, the following (figure 1) should provide the
drive to improve. It shows how operating cost and
requirements are locked in early in the life cycle of
a project.
Blanchard (1978) provided the first clues, since
corroborated by numerous projects, that operating
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4 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
costs are locked in as early as making a decision to
use a specific process or a specific machine to achieve
the outcome required by stakeholders.
A similarly compelling picture can be constructed
from the analysis of value erosion during the
project. All decisions contribute to this phenomenon
of lost value due to non-life cycle centric or low
sustainability (across the useful life of the facility/
asset) of decisions or solutions. Highest value erosion
occurs during the construction, commissioning and
start-up phases. The example in section 2 above
is representative of how many a times such value
erosion occurs. Typically such erosion occurs due to:
• poor construction methods, requiring considerable
rework
• low competency in commissioning execution
(construction personnel)
• insufficient quality control
• equipment failure during the commissioning
period (and lack of maintenance/repair capability)
• lack of competency in commission practices
(operations and engineering support personnel)
• incomplete and at times incorrect maintenance
plans and maintenance instructions at time of
commissioning
• lack of direction and leadership at that stage of the
project (key personnel move to the next project/
location)
• incomplete operators, maintainers, support
engineer training
• operations personnel competency including
support staff
• equipment failures and issue during start-up
period (when process matter is introduced into
the plant or facility)
• lack of supporting documentation or inability to
locate relevant documentation
• support IT infrastructure incomplete.
Deloitte & Touche (2012) identified in a recent study
that approximately 30% of project value is lost during
Figure 2: Value loss graph.
Australian Journal of Multi-Disciplinary Engineering
the critical stage of commissioning and start-up. This
not only has a direct impact on production capability
and reputation, the net present value (NPV) and
value return on the project is seriously affected. In
marginal projects, this might cause serious retrospect
consequences to the governance team, project
manager and others, as the achieved NPV will be
well below the expectations and approval conditions
of the project. Figure 2 depicts the value erosion
that occurs when a particular project completion
strategy is employed. Lamentably, many only start
to think about operational readiness at the time of
commissioning and during the start-up period. The
results are qualitatively highlighting the outcomes of
the generally encountered strategies resulting from
lack of planning for and inclusion of operational
readiness as a key project outcome. Value loss is the
difference of the quantities represented under the
respective curves. The aim is of course to meet best
practice, the expectation of stakeholders.
“Industry achievement” shows where many
organisations find themselves when starting a
processing plant or complex facility. Start-up plans
usually improve the situation, but too often are
started too late and fail to convince the project
manager that the activity is value add to his priorities.
A start-up plan usually assists the project and
operations personnel to prioritise the activities that
lead eventually to project completion and start-up.
Start-up plans do not provide assurances that the
project deliverables meet stakeholder and business
expectations, it merely ensures that tasks are carried
out. It is not unlike a checklist to ensure that all tasks
are completed. Operational readiness cannot be
achieved with a start-up plan alone, as often they
focus on the delivery of the hardware, documentation
and budget compliance.
A managed start-up is observed as achieving a closer
fit to the stakeholder expectations, but delivering
short of best practice. This strategy includes the
participation of operations personnel during the
project and alignment with the requirements for
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 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
operational concerns in a project. Operations
personnel usually identify a need for training early
and will also ask for simulator training (in case of
operators), vendor training and development of
maintenance strategies. The success of these actions
identified during the project phase depends on
many factors and particularly the project manager’s
willingness to sacrifice some of the engineering
budget to carry out operations related activities.
Commissioning also drives some of the project
activities, which generally improves project success
and moves the start-up capability closer to best
practice, still leaving some shortfalls in the expected
early delivery capability of the facility.
To turn around these problems typical for so many
large scale and smaller projects there have been
many processes and methodologies developed and
implemented over the years. The approach that has
provided consistently outstanding results and is a
repeatable method tightly aligned with the asset
management delivery models currently so ardently
discussed ties together the many aspects of the
complexity inherent in projects and their successful
start-up. Finding best practice, defining it in the
business context of the project and implementing
it will result in the most appropriate start-up
performance and most effective operation during
the life cycle of the facility or asset.
4 OPERATIONAL READINESS ASSURANCE
DRIVING PROJECT DELIVERY
Operational readiness is often performed at the end
of the project together with commissioning and
start-up activities. Operational readiness is more
often than not treated as a project “add on”, but it
is an integral and critical success factor of project
delivery. Operational readiness is a process by
Figure 3: Asset life cycle elements.
Australian Journal of Multi-Disciplinary Engineering
5
which a project can constantly review itself about
delivering the right outcomes and can regroup when
found to be straying from the business case and the
delivery intent.
Many companies are involved in the construction,
commissioning and start-up and operation of a
project. The division of an overall project into parts,
each consisting of separate engineering teams
multiplies the number of interfaces. Furthermore, the
modular and packaged nature of oil and gas project
design is intended to ease the project constructability
and reduce project costs. However, modular and
package design creates another multiplier of the
interfaces between designers, vendors, suppliers, the
project team, construction, hook-up, commissioning,
operations and maintenance: the greater the number
of interfaces, the greater complexity is. Complexity
is synonymous with risk: increased complexity
equals increased risk. Add to this heady mix the
necessity of procuring and manufacturing globally
in different cultures and language barriers, this risk
equally multiplies.
4.1 Operational readiness in the project phase
Operational readiness, embedded in the project
delivery process and following a quality standard
model, becomes a risk management activity. It
mitigates risk for the operator to receive something
of high cost and low compliance with business
requirements. The operational readiness team
embedded in the project initiates mitigation measures
for all the high and medium priority risks and
even for a number of low priority risks as well.
A risk register is established and managed by the
operational readiness team and thus becomes an
assurance device to demonstrate how operational
risks are managed and mitigated.
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6 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
Operational readiness assurance is now a feature
within the project and provides the owner beyond
punch lists with a validated assurance that the
organisation, the support processes and the people
are ready to receive and operate the new facility.
The operational and project interfaces are of
increasing complexity, not the least through the
present manufacturing, construction and engineering
practises that span global locations. To better
understand these complex activities, defining
interfaces and risks across all the elements, the
Asset Management Council delivery model (figure
3) highlights the stages in an asset life cycle. The
individual blocks focus on the development of the
asset as well as the underlying standards that assist
in the definition of achieving required outcomes.
Operational assurance fits into the overall delivery
model as well as within all the boxes leading up to
the operation and maintenance period.
Within each of the delivery model building blocks,
there are numerous other blocks of activity which in
their sum make up the whole project. Across each of
the blocks the risks that arise through the underlying
activities and the risks of through the interfaces
become tangible and quantifiable. In figure 4, the
main elements of “people – processes – tools” that
enable the transformation of thoughts into functional
and operational assets and facilities are highlighted.
Business as well as the asset management delivery
model cannot function without these elements.
4.2 Systems engineering as basis
for operational readiness
Operational readiness assurance when embedded in
the project structure becomes a best practice element
that is further underpinned by standards. One
key standard is the Australian Standard AS 15288
“Systems Engineering” (Standards Australia,
2003) defining life cycle processes that enable
the project to deploy the appropriate processes,
methods and measures to ensure a seamless project
Figure 4: Elements of the delivery model building blocks.
Australian Journal of Multi-Disciplinary Engineering
delivery. It “provides processes that support the
definition, control and improvement of the life cycle
processes used within an organisation or a project.
Organisations and projects can use the life cycle
processes when acquiring and supplying systems“
(Standards Australia, 2003). The processes provided
by the standard concern:
• agreement processes (with stakeholders, which
includes operations personnel)
• enterprise processes (purchasing, competency,
operations and maintenance)
• project processes (those enabling the connection
of the elements in project delivery)
• technical processes (engineering, design and
specification, data, information and communication).
Systems engineering, while not describing tools
or competencies, requires the application of
methodologies and requires development of
competencies to manage and work with the processes
specified. Applying systems engineering as the
platform for a project and managing the project in line
with these principles, will enable the development
of operational readiness assurance from the early
stages of a project. Systems engineering activities
cover the early phases of a project (stakeholder
agreement, needs analysis, concept evaluation) and
conclude at the stage of support analysis. Support
analysis concerns the determination of the required
supports that will enable the asset or facility to
function as required by the business case. Systems
engineering does not describe in any detail what
is required to deliver a functional system. Here,
operational readiness can bridge the gaps and define
what the operations people require and how the
various aspects of safe and effective operation are
to be carried out.
Operational readiness encompasses the elements
shown in figure 5.
Determining the scope and outcome requirements
in each of the sections identified will enable the
determination of deliverables from the project,
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 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
Figure 5: Operational readiness
assurance elements.
beyond the physical hardware, software and
documentation that is generally at the core of
the project deliverables. Operational readiness is
tracked against the sub elements in each section.
Operational readiness assurance as a process will
require governance independent from the project
management team, needs to be part of the agreement
process with stakeholders, suppliers and internal
customers, thus becoming the support function
giving project managers the required assurance that
they deliver to business requirements, and the owner
that the new asset or facility will function as required
by the business case.
This way of working and integrating the operational
readiness requirements directs focus on the capability
of the project team as well as the operations team
that is involved. Too often we find people who are
classed as competent moving from one project to
the next. This propagates the same mistakes from
one plant to another. We cannot just assume the
project team themselves are competent. When we
Figure 6: Value add graph.
Australian Journal of Multi-Disciplinary Engineering
7
assign operations personnel to a project to assist in
achieving operational functionality required for the
final deliverable, we often send the second team to
do so, as the most experienced personnel are required
in the day to day operation of the current facilities.
The same outcome as with project personnel is to be
expected, as the operations team will do their best
to direct the project team with their knowledge.
We need to ensure people in critical roles are truly
competent. We need to demonstrate that a thorough
and robust approach is applied to competency, by
having actually assessed and verified competency.
4.3 Competency elements in
operational readiness assurance
Operations personnel often have no or little project
and design experience. They know very well how
a plant should be operating and would be needed
to enable operators to take on the variety of tasks
they need to reform in the day to day operations.
Similarly, maintenance personnel understand their
function in the useful life period of the facility. Often
the issues arising in a project in the formulation of
solutions and the intricate problems that require
solving in achieving a deliverable are lost on the
operations teams. They have to find their way into the
project environment and learn to work with multiple
disciplines, engineering, procurement and other
personnel delivering the outcomes. They are more
often than not out of their comfort zone and normal
sphere of influence and activities. Similarly, project
personnel are not always attuned to the operations
team and their needs within the project. Both need
to learn to work together.
Both teams require being competent in the project
delivery, the understanding of operation requirements
and the connecting of all parts of the project and its
deliverables to the business case for the project.
Operational readiness if carried out correctly will
provide the level assurance for all of the elements in
figure 6 and hence give a high level of confidence that
start-up period will be as short as possible and the
ramp up to full production is in the shortest possible
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8 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
time. Value erosion is minimised and potentially
exceeds the expected planned ramp up. First and
subsequent year operation will be more efficient,
manifesting themselves in reduced cost of ownership.
This possible improved outcome can be represented
by the value add chart in figure 6. The “managed
operational readiness”, when started early in the
project, can achieve outcomes close to best practice.
Potentially early implementation of operational
readiness steps result in a value adding outcome
that reduces the duration of wet commissioning
(the period where process fluids are introduced
into a system) and the plant start-up at full rates.
Personnel trained in all aspects of operation,
equipment that has been operating early to enable
wet commissioning, has been maintained. The
potential for unexpected plant trips is somewhat
reduced. Operations plans, maintenance plans and
support elements are all established and available
from the beginning, reducing additional burden
of operations personnel having to produce project
deliverables that were left outstanding.
The introduction of a competency managed
operational readiness strategy as described below,
can add another dimension of early production and
hence early capital expenditure recovery. In observing
the impact of the early and competency managed
operational readiness strategy we find that there is a
high probability that start-up times are reduced, full
plant capacity is achieved earlier and unplanned plant
interruptions are less. Utility systems required early
to facilitate wet commissioning are also appropriately
maintained. Documentation is complete, references
are available to operations personnel, and all systems
function at a high level of maturity. The value added
is potentially multiplied due to reaching early
production steady state.
Figure 7: Relationship of competency and risk in projects.
Australian Journal of Multi-Disciplinary Engineering
4.4 Competency as risk management tool
Project delivery demands the streamlining and
standardisation of processes and methodologies as
much as possible. Operational readiness will also
look at the project processes and ideally they are
aligned with the systems engineering standard. Risk
management in projects requires the management of
risk across multiple interfaces, such as engineering
design, drafting, procurement, fabrication,
commissioning, documentation development to
name a few and operations. Successful project risk
management depends mostly on the capability of
people, as shown in figure 7, where competency in
using management systems and the resulting risk
are mapped. Risk mitigation is effective when the
competency of people is strong and management
systems are mature.
Competency can be identified therefore as another
method of mitigating risk in a project, and to mitigate
risk to operations. The task then of operational
readiness is also to ensure competency of personnel
involved in the project, and competency in the people
that will operate the new asset or facility.
Competency assurance requires the development
of documentation, training material and supportive
information to recognised standards, and the training
of personnel in the fields in which they are required to
be competent in. This requires mapping of the tasks,
be it in the project or in the operating environment,
and assigning a level of understanding and ability
required. One methodology uses a simple scaling
of increasing ability to gauge the maturity of the
capability (Performance Improvement, 2011):
• awareness – the basic understanding of a process,
method, outcome
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 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
• skill – the awareness is applied in the working
environment, it is entails supervised actions
• knowledge – the understanding of underlying
principles and the ability to apply the knowledge
in the work place to high standard and operate
with minimal supervision
• mastery – the ability to develop processes, work
unsupervised and have a deep subject matter
knowledge, enabling the guidance and direction
of others.
Using the systems engineering standard as guidance,
the required competencies can be defined and
personnel assessed against these requirements.
Naturally, managers and subject matter experts
should be at the upper end of the scale of knowledge
and mastery. Part of the project delivery process then
must be the competency assessment of all personnel
to form the basis of the confidence level in the
delivery of the project. This has been identified in
figure 6, the value add graph, where the qualitative
result of the possible value add through competency
assessed personnel in project delivery is shown.
Competency of course needs to be mapped for each
project role, and the level of competency required
must be ascertained and documented. Then it
becomes possible to progressively increase people’s
skill and knowledge levels, and devise training
requirements for each role. It is often not an objective
of projects to train personnel, but if that does not
happen, where does the next projects’ competent
personnel come from?
Cost effectiveness will demand that a plan is
established by which outcomes are achieved. A
structured process, such as the one below (figure 8)
aligned to the Australian Qualification Framework,
will aid in the achievement of this target.
Role definition, task delivery, responsibilities and
level of competency required are all part of the
effective competency assessment and assurance
system. Extending the requirements to the operations
personnel executing the operational readiness
Figure 8: Competency system (Performance Improvement, 2011).
Australian Journal of Multi-Disciplinary Engineering
9
assurance from the early stages of a project will
provide the additional benefits to the project manager
and governance body of identifying interface and
deliverables from each stage of the project that align
with the business requirements. In this way, the loop
closes and the stakeholder assurance that a project
delivers the required outcome can be demonstrated
much easier and with lesser hiding places for
incompetence in delivery.
5 EXAMPLES OF SUCCESS
For example, a refurbishment project on an Australian
offshore gas platform focused entirely on the
requirements of the operations teams, included them
in the project from the early days of engineering, they
participated not only in risk reviews, but determined
the quality and type of support and documentation
required, and was part of the engineering and support
deliverables approval process. This resulted in:
• the early identification of all documentation that
was required to be updated
• early identification of training needs and
competency requirements
• streamlining of the installation period.
The outcome was a 18% higher project cost, with a
total saving in installation, commissioning and start-
up cost of the changed plant of nearly 39%.
The start-up period was planned to take 8 calendar
days, full operation was achieved in 3.5 days,
resulting in an additional 4.5 days of production.
Another example from the Australian power
generation industry is the use of the competency
based and operational readiness driven project.
A new high voltage distribution system and
transformer was to be installed to service increased
demand beyond current plant capability. Due to
early operations involvement and the selection of
engineering personnel with specific competencies
and high degree of operational experience the
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10 “How does operational readiness assist in asset management: It surely is an ...” – Krauss
design period was reduced by approximately 3
weeks, resulting in the saving of approximately 36
man weeks, and competency assessed operations
personnel were involved throughout the project.
This resulted in a start-up time that reduced by about
6 working days, adding to the capacity of the power
supply company much earlier, gaining extra revenue
and gaining a positive reputational boost.
6 CONCLUSION
The paper is a high level appraisal of issues that
continue to plague projects and their owners in
achieving effective delivery and system start-up.
Operational readiness has become a more prominent
phrase in project delivery, promising the earlier
delivery of value from the complex new systems that
are the subject of these undertakings. Operational
readiness as subject is open to interpretation, but
has been defined by many in a variety of ways, from
military to industry:
• The capability of a unit/formation, ship, weapon
system, or equipment to perform the missions or
functions for which it is organised or designed.
• The process of preparing the custodians of an
asset under construction, and their supporting
organisation, such that, at the point of delivery/
handover, they are fully ready to assume
ownership of the asset and reassuring the various
stakeholders in a project that their asset is in a
state of operations readiness.
The paper examined a variety of aspects of operational
readiness that can successfully be implemented in
projects of all sizes and complexity, meeting with
the definitions above, but more importantly, meeting
the expectations of stakeholders of a safe start-up
without unexpected production interruptions and
without having to deal with unfinished project
business. While there is only a qualitative illustration
of possible gains shown in some figures above,
some real examples underlie the points made. The
success examples in section 7 are transportable to
much larger and more complex projects. Whether
the gains are as significant or greater will depend on
the maturity of approach and the level of cooperation
between owners and project managers.
Aligning operational readiness with asset
management principles, supported by systems
Australian Journal of Multi-Disciplinary Engineering
engineering principles and assessing project and
operations personnel for their competency to carry
out the work has significant benefits to all parties
involved. A major impact of aligned and coordinated
activities resulting in true operational readiness will
find its ultimate benefits in the potential of reduced
life cycle costs. The maturity of these approaches
to exceed best practice expectations as a matter
of course is unfortunately not observable across
industry. Waste resulting from current practices in
project delivery to the tune of over US$15 billion
annually is reported in the United States (NIST, 2006).
The equivalent Australian statistic is not conclusive,
it does not exist in the public domain. Can we
continue to endure such huge losses?
ACKNOWLEDGEMENTS
The author wishes to acknowledge the generous
support of Performance Improvement’s management
in making the paper possible and for the supply of
some of the processes that assist in the optimisation
of project delivery through operational readiness and
competency management.
REFERENCES
Blanchard, B. S. 1978, Design and Manage to Lifecycle
Cost, M/A Press, University of Michigan.
Deloitte & Touche, 2012, Effective Operational Readiness
of Large Mining Capital Projects, South Africa.
Morgans, A. & Gbedemah, S. 2010, “How Poor Project
Management Causes Delays”, paper presented to the
Society of Construction Law, February.
National Institute of Standards and Technology
(NIST), NIST construction project survey 2006, USA.
Performance Improvement, 2011, Competency process,
CA-PI-55400-CP.
Standards Australia, 2003, AS 15288 Systems
Engineering – Life Cycle Processes.
UK Association of Project Management UK, 2004,
Directing Change – a guide to governance of project
management.
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 “How does operational readiness assist in asset management: It surely is an ...” – Krauss 11

ERNST KRAUSS

Ernst Krauss has more than 40 years’ experience in petrochemical, mining and
general industries in instrumentation and electrical engineering, both overseas
and in Australia. Ernst also has over 18 years’ experience in reliability and
maintenance engineering, asset management and operations support. In his
current position he supports clients in defining asset management solutions
and asset performance improvements; carries out operational, integrity and
maintenance audits; carries out and manages risk, reliability and maintenance
studies; and develops and monitors reliability improvement programs for
production facilities. Ernst develops work scopes with and for clients, and
manages implementation. He has gained experience in business opportunity
development, program development and delivery, providing solutions for
operations as well as strategic and management improvements, and has
practiced and incorporated change management methodologies in his delivery.
Ernst’s objective is to provide business-centred asset management solutions and
risk-based maintenance support to business and projects; provide management
support for integrity and reliability improvement projects, including delivery of
training sessions for senior, middle and workforce management; and develop
availability assurance processes applicable over asset life cycle to maximise
return on investment and optimise operations. Ernst’s passion for asset
management, reliability engineering and training has been acknowledged by his
peers and is reflected in invitations to speak at conferences. He has developed
and delivered training courses in asset management, integrity and reliability
management, and is an approved lecturer for the Asset Management Council
course in “Foundations of Asset Management” and the “Asset Management
Plan” Intensive. He also develops “Lunch and Learn” sessions for delivery to
customers and employees.

Australian Journal of Multi-Disciplinary Engineering Vol 11 No 1