CRUSH TRANSACTIONAL WASTE Leveraging Smart Contracts in Capital Projects
Bill Arend , DG Chief Commercial Officer Arend has 25+ years of experience building and leading top-performing sales teams at Workday, Oracle and Microsoft. His teams have helped companies drive productivity and automation by leveraging technology FEATURED FEATURED from ERP, CRM, HCM, and Supply Chain. Peter Dumont , PrairieDog CEO SPEAKER SPEAKERS Peter Dumont, P.E., is the CEO of PrairieDog and a member of the OS2 research team led by CII at the University of Texas at Austin. He also is an Executive Advisor with the Premier Resources Group. He is the immediate Past President of CURT and has more than 25 years of engineering and construction experience developing and executing capital projects globally; and running operations for EPC service organizations. William Fox , DG Chief Product Officer William was Director of Operations for Aker Solutions Drilling Technology (later MHWirth) and managed key aspects of NOVOS open architecture controls project for NOV. He was a commissioned officer in the U.S. Army where he held leadership positions. William leads product strategy and design for Data Gumbo’s enterprise -grade blockchain network.
AGENDA 9:00 – 9:05 Introduction 9:05 – 9:20 Peter Dumont — Transactional waste — Benefits of smart contracts 9:20 – 9:30 Bill Arend — How smart contracts work 9:30 – 9:40 William Fox — Demo — Use case — Quick steps to implement 9:40 – 9:55 Q&A
PETER DUMONT PETER DUMONT CEO, PrairieDog Peter Dumont, P.E., is the CEO of PrairieDog and a member of the OS2 research team led by CII at the University of Texas at Austin. He also is an Executive Advisor with the Premier Resources Group. He is the immediate Past President of CURT and has more than 25 years of engineering and construction experience developing and executing capital projects globally; and running operations for EPC service organizations.
Project Delivery is Not Delivering of mega-projects of all projects are not of project capital is of all projects FAIL >$1B experience completed within 10% of WASTED on to meet one or more budgeted cost or schedule cost overruns business objectives transactions Source: B. Bechtel Source: CII Source: CII Source: CII/NTNU “I think the current model within our industry is broken.” – Ian Edwards, Interim CEO, SNC-Lavalin (on August 1, 2019, after SNC-Lavalin reported a $1.6B loss and their stock dropped to a 14-year low)
Opportunity to Re-Capture Lost Value Where Project Capital is WASTED Why So Much Waste? (Non-Residential Construction) • “Trust Tax” • Compounded mark-ups; hierarchical supply chain — Multiple layers of $protectionist • Poor financial health — Late payments (trade credit) — High interest debt financing • Slow and onerous procurement process — Time consuming RFP/Bidding/PO — Value-based selection is rare • Complex and fragmented projects Source: CII/CURT OS2 Research
Operating System 2.0 (OS2) Overview OS2 Transformational Focus Areas Goal Congruence and Alignment Supplier Dynamic Engagement Risk Modeling Smart Contracts and Blockchain
Smart Contracts + Blockchain USER INTERFACE Example Data Sources Site Reality QA/QC Capture Systems nD Design GPS/RFID Models Material Tags Owner PM Systems, ERP, Transactions Insurance Co. etc. Standard Data AWP/ Schema IoT Data Lean Blocks Tools Contractor Shared, single source of truth Assets and Services PM Systems, ERP, Smart Contract – immutable data foundation Insurance Co. etc. Various Data Sources
Current: Paper Based vs. New: Digital Myriad Systems and Contracts Shared, Single Source of Truth Joint General Sub- Insurance Bank Owner Venture Bank Owner Engineer Contractor JV Contractor Partner General Engineer Contractor A B C D E Block 1 Block 2 Block 3 Block 4 Block 5 Finance A B C D Sub- Consult Vendor Fabricator Contractor OEM Consultant Distributor Logistics Fabricator Vendor OEM Distributor Logistics Material Tax
The Power of Smart Contracts Touchless Transactions
Owners Providers — get paid much faster — receive early pay discounts — free up working capital — only pay for what is received — reduce overhead costs — reduce overhead costs — automate the invoicing process — achieve lower billing rates — eliminate contract leakage — achieve full digital twin — are seen as a “client of choice” — improve client relationships — minimize disputes — minimize disputes — benefit from trust and transparency — attract best companies and teams — leverage current systems — achieve provenance & traceability — can scale without additional G&A — can scale without additional G&A — position for future transformations — position for future transformations
BILL AREND BILL AREND Chief Commercial Officer Arend has 25+ years of experience building and leading top-performing sales teams at Workday, Oracle and Microsoft. His teams have helped companies drive productivity and automation by leveraging technology from ERP, CRM, HCM, and Supply Chain.
How to Integrate Supply Chain: Smart Contracts • A smart contract is a computer protocol designed to automate the performance of a contract; it contains the business logic of the relationship • The smart contract is applied to a specific service or scope and is Owner Smart Contract Contractor irrevocably linked to the natural language contract through an addendum • The terms and conditions (rates, measurements, timing, etc.) of the smart contract are negotiated and agreed
How Transactions are Executed: Verifiable Data • The data required to verify the conditions Data Industrial Data of the smart contract is sourced from Sources Sources IOT existing systems / technologies (project ERP ERP execution tools) • The smart contract defines the data specification and the data is brought into Owner Smart Contract Contractor a structured “Industrial IoT” via APIs or other means • The smart contract then executes the transaction using the data as defined by the encoded business logic
How Transactions are Recorded: Blocks in a Ledger • The transaction executed by the smart Data Industrial Data contract is posted to a “block” in a Sources Sources IOT distributed ledger viewable to the parties ERP ERP • The block is verified through the “consensus” of the smart contract parties and can be pushed back to company systems of record Owner Smart Contract Contractor • The block stores all relevant data and documentation required by the smart Block Block Block contract and it cannot be changed • Payments are automated and can be Transactions initiated immediately Assets or Services
GumboNet™ Regulators Vendors and Manufacturers Suppliers The Industrial Licensors Blockchain Network: — Invoicing Engineers Owner — Operating Expenses Labor Fabricators — DSO Sub- Contractors — Free Cash Flow — Provenance Insurance and EPC/CM Safety
WILLIAM WILLIAM FOX FOX Chief Product Officer Prior to Data Gumbo he was Director of Operations for Aker Solutions Drilling Technology (later MHWirth) and managed key aspects of the NOVOS open architecture controls project for National Oilwell Varco. William was a commissioned officer in the U.S. Army (2005 – 2010) where he held leadership positions in South Korea and Bagdad. William leads product strategy and design for Data Gumbo’s enterprise -grade blockchain network.
Bulk Commodities Smart Contract What Data Gumbo is doing today: How blockchain helps: — Capture field tank level and flow sensor/meter — Guarantees only agreed pricing is applied data at production sites and disposal wells — Removes doubt about timing and volumes — Capture truck and SWD tickets — Both sides get complete record of what — Generate pre-approved payments based on price material moved where and when book and field measurements
SM SMAR ART T CON CONTRA TRACTS CTS AND AND BL BLOCK OCKCHAIN CHAIN HO HOW W TO O ST STAR ART — Determine use case(s) to attack first Value stream map current vs. future state to — identify waste reduction and business value — Get buy-in from stakeholders — Write Smart Contracts — Connect to source data systems Connect to payment systems — Test (30 days) — Go live — approx. 3-4 months depending on — source data access
KEY KEY TAKEAWAYS TAKEAWAYS Proven Begin Now Technology vs. Future No Need to Rip No Upfront Fast Time and Replace Costs to Value
Contact Us Houston Office PrairieDog Office 1334 Brittmoore Road, Suite 175 2245 Gilbert Avenue, Suite 100 Houston, TX 77043 Cincinnati, OH 45206 281-909-0781 281-779-7652 www.datagumbo.com www,prairiedogvp.com Any questions? Norway Office bill.arend@datagumbo.com Bryggerikaien 16 4014 Stavanger, Norway pdumont@prairiedogvp.com +47 900 64 016 william.fox@datagumbo.com facebook.com/datagumbo twitter.com/DataGumbo linkedin.com/company/data-gumbo instagram.com/datagumbo
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