Honeywell Process Solutions Shares Service Risk

August 022013
Honeywell Process Solutions Shares Service Risk

By Bill Lydon, Editor

At the recent Honeywell User Group (HUG) 2013 conference, Honeywell announced new services under the Assurance 360 program for owners of Honeywell systems. The overall goal of these programs is a reduction of unplanned events, faster problem resolution, and better plant performance.  I discussed these new programs with Darius Adamczyk, President of Honeywell Process Solutions (HPS), and Shawn Gold, Senior Marketing Manager at HPS.

Assurance 360 offers two service levels.  Performa provides Honeywell support personnel to act in advisory roles across all areas covered by the program.  Optima provides Honeywell personnel to advise customers and directly handle tasks to achieve agreed upon metrics with a monetary contract risk/reward for Honeywell.

I believe Assurance 360 reflects Adamczyk’s commitment to services.  Adamczyk stated in a discussion we had at HUG 2012 that his intent is to improve service options for Honeywell Process customers. “I come from a world where if you’re not servicing 70-80% of your installed base you are doing something wrong,” said Adamczyk.

Assurance 360 Optima

The highest level offering is the Optima service contract. Honeywell takes ownership of service activities and guarantees outcomes.  This contract includes assigning a Honeywell Performance Manager who is a single point of contact and takes an active role in managing service activities including problem incident resolution. This person oversees project implementations and serves as an intermediary between Honeywell and the customer to ensure all aspects of the project are conducted efficiently.

To qualify for an Optima contract, the user must provide a letter of intent to proceed with an agreement based on certain parameters including a minimum 3 year contract term. Based on this letter, Honeywell performs an initial plant assessment and conducts system audits. In this step, Honeywell uses performance-benchmarking tools to document plant assets and assess system performance to establish baseline operation metrics.  Honeywell also defines required changes that the customer must make to the automation system as a condition to proceed with the Optima contract. After the customer invests in required changes, a contract is created with KPI metrics.

Honeywell manages service to meet the agreed-upon performance and outcomes providing regular status updates, reports of activities, and evaluations. Monthly, quarterly, and annual reports are established for operations, system health, capacity planning, trending, compliance management, architectural assessments, and technical roadmaps. Site-specific monthly status review meetings are scheduled to report on metrics and address program performance to baseline plan. Shawn Gold explained if Honeywell misses the metrics or if the customer has a loss of view or loss of control Honeywell is paid 10% less and if they outperform the metrics they are paid 10% more.

Remote Connectivity

Honeywell is leveraging remote monitoring services to more efficiently serve customers. Gold explained that Honeywell is confident they are going to be able to predict a lot of things that could go wrong and fix them before problems occur.

Honeywell Centric

Considering most plants have a mix of equipment from multiple vendors, I asked Gold if they would cover hardware and software from other vendors. At this time, the programs are only available for Honeywell hardware and software. Gold also explained that the guaranteed programs do not include Honeywell process instruments.

Thoughts & Observations

The concept of a penalty and reward based on performance is a key selling point of the Optima program. The quality of these programs hinges on proper assessment and setting good metrics.

The attraction of the program is that Honeywell takes responsibility for performance and risks losing 10% of the service contact price and has an incentive to make 10% more if they outperform the metrics.

With a Performance Specialist Manager that oversees the customer plants and is the customer’s advocate, it takes a mature organization to maintain this as a responsive program because this manager may have to argue with his employer about customer support issues.

This may be the beginning of a much broader program. As Shawn Gold told me in our interview, “We need to walk before we run.”

More Information: Honeywell Assurance 360 Optima Executive Brief

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