Strasunskas et al. A Method to Assess Value of Integrated Operations 1 A Method to Assess Value of Integrated Operations Darijus Strasunskas Dept. of Industrial Economics & Technology Management, Norwegian University of Science & Technology (NTNU), NO-7491 Trondheim, Norway darijuss@gmail.com Asgeir Tomasgard Dept. of Industrial Economics & Technology Management, Norwegian University of Science & Technology (NTNU), NO-7491 Trondheim, Norway Asgeir.Tomasgard@iot.ntnu.no ABSTRACT Integrated operations in the petroleum industry adopt information technology, improve access to real-time data, integrate people and organizations, change work processes, and by doing so, enable better and faster decisions. Consequently, a set of associated business benefits is envisioned. However, the challenge is how to measure them. In this paper, we propose a pragmatic decision analytic method to assess monetary value of integrated operations. The proposed method builds on findings from contemporary literature that emphasizes the need to assess information technology in a broader context of organizational structures and work processes. The method therefore has a built in qualitative assessment of collaborative competence that provides indispensible insights to risks associated with a particular change management project. Yet, it allows for calculating monetary value by integrated formal decision analysis. Feasibility of the method is illustrated by an illustrative case from integrated and collaborative monitoring of offshore operations. Keywords Qualitative assessment, monetary value, business benefits, integrated operations, teamwork. INTRODUCTION The petroleum industry adopts Information and Communication Technology (ICT) and teamwork to implement Integrated Operations (IO). Key characteristics of IO are improved access to real-time data (sensors, aggregation and visualization techniques), integrated work processes, people and organizations. This creates more proactive and collaborative work practices, and enables better decisions to be made faster. Group decisions are of a better quality with the added value that groups are not using more time for decision-making (Blinder & Morgan, 2005). Serial work processes are replaced by simultaneous and parallel tasks, thereby reducing total time consumption, increasing many-to-many communications. From a decision-making perspective, parallel work execution means a more iterative process. Moreover, multi-disciplinary teamwork becomes more critical as the availability of real time data increases, and work is performed simultaneously, more or less independent of the physical location. Collaborative work brings intrinsic outcomes such as the quality of work-life or job satisfaction. These outcomes result in improved organizational performance (Cohen and Bailey, 1997; Delarue et al., 2008). While deploying ICT and related organizational changes, a wide range of costs should be taken into account (Irani et al., 2006). However, although the industry generally regards IO as highly beneficial, even rough numbers are seldom available. Over the past decades, the contribution of ICT to organizational performance has been extensively examined by many researchers in operations and information systems research. Despite a large number of evaluation frameworks, improvement is still sought (Schubert and William, 2009), and evaluation of team performance and assessment of ICT business value remain challenging tasks (see (Delarue et al., 2008) and (Brynjolfsson et al., 2002), respectively). Operations in the petroleum industry are characterized as decision-centric. However, information quality enhancement has value only if there is flexibility in operations; in other words, there must be potential to change the decision or additional information has no value (Bratvold et al., 2007; Pickering and Bickel, 2006). The decision-analytic view is based on explicitly representing decisions and is very different from qualitative approaches (Howard, 1970) that are dominant among methods for ICT business value assessment. Yet, decision maker quality needs to be included when investigating the ICT- performance relationships (Raghunathan, 1999). We attempt to measure benefits from improved information quality and teamwork. The difficulty of putting a value on intangible means most studies in the ICT business value to focus on structural qualitative frameworks to plot where value is