:AACE CERTIFICATION 2009-2010:

Change Management

In this week blog report, I’d like to continue comparing the real work which is practically implemented at PT Inco organization with the theoretical approach in the AACE course especially with Total Cost Management Framework. This week topic is Change Management , Total Cost Management Framework Chapter 6 – Strategic Asset Performance Assessment sub chapter 6.2 Asset Change Management against PT Inco Standard Procedure 10 (SP10) and specific to Project Engineering Business Process, Inception Phase, Preparation of Business Case.

Figure 1: PT Inco Project Inception Phase Business Process1

In PT Inco Project Management Inception Phase, Project sponsor and owner (in the AACE course called Program Manager) have to initiate the capital project through feasibility study in order to align with corporate business strategy. In the feasibility process, one of the major processes is for the sponsor/owner to identify the requirement of change management to the project proposed. Project Sponsor/ Owner with their skills and knowledge with help from other parties have to determine the level of change management required starting from replacement in kind till the process engineering requirement. The Change Management Procedure shall follow the seven step process provided in figure 2.

Figure 2: PT Inco Change Management Procedure2

The major inputs to the change management process are the objective of the capital project, plant historical information i.e. existing setting parameter, location, historical information, legal requirement and previous assessment conducted.

The process goal of PT Inco change management is to ensure that all change to the equipment, plant, processes or system at PT Inco are reviewed and implemented by authorized and competent person in a safe manner and then properly communicated to all of those affected by the change. The change management process will ensure all hazard associated with the change are identified, assessed, recorded and controlled. The management of change is a critical process to ensure that changes do not result in deviations that leas the operations outside the establish operating limits, take necessary actions to minimize the risk and establish an inspection of follow-up system and ensuring that all necessary safety, health and environmental concern generated by the change review are addressed prior the authorization and implementation3.

Change Management documentation is recorded in the CM001-Change Management Request Form as figure 3 below, where the major outputs are the scope requirement, alternative action, control requirement and change request to the responsible department.

Figure 3: PT Inco CM001-Change Management Request Form4

It’s obvious that PT Inco Change Management process is only focus onto the impact of the change to the hazard associated to the change whether potential hazard to the human equipment, process or system. Even though change will impact to the investment decision making but the change management in place is not as comprehensive as theoretical Asset Change Management in the Total Cost Management Framework chapter 6.2.

In the Total Cost Management Framework Chapter 6.2, Asset Change Management is describing the comprehensive change requirement to the asset starting from planning through the end product i.e. corrective actions, requirement scope change and corrective actions alternative. Asset change management refers to the process of managing ANY CHANGE to documented information defining the scope of an asset or basis of measuring and assessing its performance over its life cycle. The process goal is to ensure that no change is made to the physical asset or its function until the requirement assessment and asset planning processes define, document and decide on the change and of course by the authorized personnel.

Figure 4: Process Map for Asset Change Management5

Person accountable for asset change management I believe is the Asset Manager who looks after the entire asset under his/her accountability. The process of asset change management inputs are mostly requirement documents, asset planning basis, investment decision basis, other change request, asset performance, correction action alternatives and historical requirement. The change management output generally the performance variances causes, requirement change scope, corrective actions, information fro forensic performance assessment and historical information.

In general, asset change management in Total Cost Management Framework is the process of identification, definition, categorizing, recording, tracking, analyzing and disposition on the scope of the asset in strategic asset management. They are focus not only in the one topic of the change but comprehensive of managing any changes to the asset.

I can see 2 things here of the comparison between PT Inco Change Management and Total Cost Management Framework Asset Change Management Process. First, both process basically focus to the asset, however PT Inco only focus onto the hazard impact due to change of the process or system meanwhile Total Cost Management Framework process focus onto any changes to the asset. The main process is quite typical, starting from the asset or change planning through tools and technique of the change management till change documentation. Since Total Cost Management Framework is a comprehensive process of asset change management then it may worthwhile to be adopted into the existing PT Inco change management process.

Secondly, I’m still not quite sure who suppose to be accountable to the change management process. In PT Inco, its sponsor/owner accountability which is in the course called program manager, who look after day to day operation. However, in the TCM, looks like the Asset Manager will be accountable for the asset change management which is in this case, PT Inco Asset Manager is the corporate level, who looks after the entire Valeinco asset and organization. I need to dig this one more deeply to make it clear who accountable for what.

Sorowako, November 26th, 2009

1 PT Inco Project Engineering Business Process, Inception Phase Page 6 of 20, Author. Muhammad Asril
2 PT Inco Change Management Procedure SP10 version 1.1 EHS Standard Procedure Page 8 of 23
3 PT Inco Change Management Procedure SP10 version 1.1. EHS Standard Procedure Page 2 of 23
4 PT Inco Change Management Request Form CM-001 Page 1 of 5
5 Process Map for Asset Change Management, Total Cost Management Framework, Chapter 6.1 Asset Change Management Page 100