The financial justification of DCS migrations

New generations of control systems have brought us many new opportunities and capabilities compared to the previous generations. Nevertheless, it is still a big step, both financially and operationally, to replace, upgrade or migrate the current control system and implement their successor. Both the on-site engineers and the financial decision makers need to be persuaded of the necessity and benefits of implementing a new generation control system.

Many articles mention the cons of not upgrading/migrating the current DCS, such as reaching the end of its natural lifespan, unavailability and/or increasing costs of spare parts, the lack of knowledge of the old (obsolete) DCS due to personnel retirements and the decrease in (old) system support. These all result in the same problems; the risk of production loss and unplanned downtime. While these are legit reasons to consider and justify a DCS upgrade/migration, it does not often lead to persuading the financial decision-makers. For them the increasing risk of operating the old (obsolete) DCS and the exact timing of a possible failure (shutdown) are undefinable.

The systems works today, so why would it stop working tomorrow.”

This day-by-day approach is justified by the fact that the chance of the system starting to fail the next day is very small, followed by a low urgency to upgrade/migrate the current system in the near future. After all:

“It has been functioning well for all these years”

Considering the costs of an average DCS migration project, you might say this is solid reasoning, from a financial view. Another view is that this approach is very short-sighted. In order to create opportunities with a new control system, it is only logical that a large investment to fund this control system is required. This will lead to many new opportunities that were not possible with the old DCS. In terms of return on investment (ROI) these opportunities lead to less costs in the future (maintenance, spare parts, etc.).

For many process plants it is therefore inevitable to recognize the need of migrating an old distributed control system (DCS) to a new control system. The decision-making for the migration process depends on many factors, including the justification of the investment to the financial decision-makers of the company. In order to justify the investment, a comparison needs to be made between the costs, referred to as total costs of ownership (TCO), and benefits of migrating to a new DCS.

Benefits of implementing a new generation control system
An article by ABB defines several benefits of new generation control systems that contribute to the ROI that companies are seeking when considering a control system upgrade or migration.

  • Increased return on net assets (RONA).
  • Reduced maintenance costs as a result of improved maintenance options, practices and procedures.
  • Increased effectiveness resulting in a decrease of operational errors and an increase in decision making.
  • Visibility of plant floor data for accurate and timely decision making.
  • Improved cyber protection compared to older generations of systems.

Costs versus benefits of a new DCS

An article published by Rockwell Automation goes more into detail and includes both the total costs of ownership (TCO) and benefits of migrating to a new DCS. Comparing the tables below (costs versus benefits) gives you an idea of a return on investment (ROI) of migrating to a new DCS.