PAS Musings

100,000 mile commute... :(

You’ve been there.  Those days traveling when things just don’t go right.  Your body is tired.  Your mind is on coast.  And bad stuff just seems to come your way.

So here I am at the end of week #3 in the new job at PAS.  The family still living in Phoenix.  Me living in Houston.  During the transition, I want to get home most weekends so I can do the yard, get the house ready to sell, etc., etc.

I stopped to figure out my annual commuting mileage.  Wrong move.  Who wants to commute 100,000 miles per year?  If only my youngest daughter could somehow – magically – graduate from high school right now. 

Maybe I could wave my wand and … Poof! … she could be a super-genius already graduated from high school, college and everything else that causes separation and costs money. Too bad - it isn’t going happen no matter how much I wave any kind of wand.

Well, in my state of being tired and on coast on the way home on Friday, I returned the rental car and – yip – things started going wrong.  The rental car return kid says “Please go inside to work out your final bill, my automated doo-dad doesn’t recognize your car.” 

Being on coast, I just did as I was told and went inside (this is a big deal, because normally I work hard NOT to do something just because I am told...)

After patiently coasting in the Budget rent-a-car shack long enough to want to get out of line and go to the bathroom, something somewhere in the back of my head fires off a thought – “Hey you! What if this isn’t your line?”  I pushed the processing of this thought just a level higher than the other biological signals fighting for my attention and …. Yip, I am in the wrong line.

So I went back outside, wiggled my car back out of the rental return line and drove her back to where she belonged.

Bye-bye Budget. Hello Avis.

Duh!  Maybe they need to print a sticker on your travel documents: “Warning:  Too much travel causes coasting, leading to stupid actions.”

I think I’ll stay in Houston next weekend and ask my wife if she wants to come visit me instead. 

Knowledge Management

The topic of knowledge management came up today. 

This is a big thing for customers.  Many of the operators, engineers and other staff working in their plants will change jobs or retire in the coming years.  And with them goes knowledge.

While the operation of how to run the plant may be well-documented, the know-how related to system configurations and advanced applications is more often than not.  This is a problem.

So what can a company like PAS do?

First, we can start by making the plant software applications as simple as possible to install and operate.  We should reduce the expertise required to install and maintain these applications.  Our initiative with the STAR adaptive multivariable predictive controller is a good start.  But it’s not enough.

Second, we can deliver the tools that automatically and systematically document the advanced applications and control system configurations.  Engineers are notorious for building software & system applications “their way” and then not documenting them.  Our initiative with Integrity.MOC is a good start.  But it’s also not enough.

Clearly, there is incentive for companies like ours to do more.  Seems like it’s time for us to get busy….

The value of Google

Everyone talks about Google.  So I had a closer look and compared valuations of Google to its peers, and also to our peers.  What I found was interesting.

Everyone talks about their stock price, which is now higher than ever at $347/share!  But the more interesting story is their market cap, P/E ratio, and valuation multiple compared to other companies we know and love...

                      Valuation, $B    Revenue, $B/yr    Multiple      P/E

       Google            97                   5.3                 18x         102

       Yahoo             50                   4.8                 10x           33

       Microsoft       268                  39.4                  7x           22

       SAP                54                   10.3                 5x           33

       Intergraph      1.4                  0.56                 2x            16

       Matrikon         0.1                  0.05                 2x           24

      AspenTech      0.3                  0.27                 1x          -ve

Market pricing is set by demand and expectation, so one can see that the market does not expect much from Aspen – assigning a total market cap (company value) of only 1x revenue.  Similarly, not too much excitement is built in to the market valuations of Matrikon and Intergraph, both of which are valued at only 2x revenue.

The real gold lies in the valuations assigned to Google & Yahoo – whose valuations are the reward for bringing innovation to market.

The challenge for companies like PAS then, is to lead with innovative product strategies that deliver solid and significant customer value.  Products and solutions that can change the industry - not just deliver more of the same.

And it’s exactly that challenge on which the PAS team is going to deliver…

The wisdom of Solomon

Had lunch with one of Solomon’s finest this week.  Solomon has been asked to include advanced control (APC) and alarm management in future benchmarking surveys. 

APC has taken on a bit of a bad rep as companies have not adequately maintained their investments in this area.  Also, some companies struggle with the specific benefits of alarm management.  So words of wisdom from Solomon here should be good news for PAS and other vendors in the area...

I hold a very high respect for Solomon & Associates (www.solomononline.com).  Solomon’s specialty is delivering biennial performance benchmarking results to oil refinery management and then offering consulting services to help management improve their industry ranking. 

Over the years, Solomon & Associates have built up the practice to where even the bonuses of some refinery managers correlates directly to their survey ranking!!  Now what manager would not also buy consulting from the group that helps define his bonus???  Lee Solomon sure knew what he was doing when he left Exxon to set this business up!

I know there's a learning in here and I aim to find and apply it to the PAS business.  We already have a good deal of happy customers that want to do more business with us.  More of the same can only be a good thing....

Still Alarm Management...?

I sat in on a technical session all about Alarm Management this afternoon, and in the British vernacular, I was gobsmacked!! (www.freesearch.co.uk/dictionary/gobsmacked)

Old news, repeated over and over again.  A day of alarm management papers that should have been condensed into a 30-minute problem statement, solution methodology and software tools.  Instead, the vendor presenters bored the audience with stories of an all-too-familiar problem.

But the alarm management problem was already solved over seven years ago with a suite software tools by PAS and has evolved since then.  So what’s up with the ongoing discussion like this thing is new???  Or maybe it is new for the other vendors?

Customers seemed to share my frustrations, indicating that they already know about the problem of alarms.  They said it would be more valuable if someone talked about how to justify these projects so that the existing solutions could be implemented and we could all move on to What’s Next?

Instead, we were subjected to the same ol’, same ol’…. stuff we already knew.  Stuff we already did.

What is up with that??  Have we collectively all made the wrong investments or not paid attention to the obvious??

At least the PAS customers – 4 of the top 6 refiners and 2 of the top 5 chemical companies – have the problem solved.  Now if we could just get done with the others and move the discussion to What’s Next?

NPRA

My last posting, I was high on the good ol’ days.  As I attend a National Petrochemical & Refiner’s Association (NPRA) meeting in Dallas, my perspective is shifting… 

This conference is chock-full of industry buddies, most of whom who have known each other for years.  And, well, the number of years that they (we?) have all know each other is… well, getting up there. 

Aside from business, the cocktail hour chit-chat is moving to kids getting through in college and upcoming retirement plans.  Yikes!  This is making me feel OLD – not something I want to be reminded of.

I guess that’s another reason I’m excited about PAS.  Lots of younger people. Lots of energy and excitement.  Yeah, I need that. 

Don’t get me wrong – the NPRA and the people it serves are both wonderful.  And there is still a huge amount of room for innovation, new goodies and the like in this space (otherwise I wouldn’t be here at the conference or even in this industry).

Now the challenge for PAS (and the other vendors with energy, excitement and youth) is to figure out how to deliver this new stuff effectively and in a way that fits the industry paradigms….

With enough youth and energy, we can do it!!  Go team go!!!

The good ol' days...

My weekend reflections on the first week suggest that there’s a certain déjà vu about this place.  Some familiar quality.  Like I’ve been here before.  And I think I know why… 

PAS reminds of my days back at Profimatics in Thousand Oaks, California.  Same kind of working joviality – people getting along and having fun, all busy doing their own expert engineering software thing. 

Really, it’s so similar… even down to the mismatched collection of chairs kind of scattered around here and there in the open spaces. 

But the thing that really knocks my socks off is that one of the engineers here – a really good guy – looks just like his father: a guy that I used to work with back in Profimatics days.  Same roundish face, same mannerisms.  I chuckle to myself just watching him in action.  Flashback city.

And I’m not the only one here enjoying the good old days again.  Some of the other shall-we-say “middle-agish” guys have told me that they like PAS because it reminds them so strongly of the good old days back at Setpoint. 

Ah yes… the good old days back before those guys with the leafy logo and the big red letter came and changed everything… ending the good old days.

Yip, I kinda like the good ol’ days.  And now, I’m going to work to keep them around a while longer. 

And just for that kid who looks like his pop…  Well, wouldn’t it be great if when he gets “middle-agish” that he would get the same chuckles and pleasure as I’m having.  Watching someone else’s kid come in, looking and acting just like someone he knew … back from the good ol’ days.

Yea, that sounds fun.  Long live the good ol’ days!

Customer says... "Migrate to PAS"

Today was customer day.  One of PAS’ finest came into the office to spend the day going through the various technologies and how they are applying (or plan to apply) them.  Always good to meet customers face-to-face.  Especially when they make it easy by coming to the office.

This customer validated my beliefs.  PAS has good products.  In fact, PAS products are really good – so good, that this customer is pulling out products from other vendors to put in PAS products.  That makes me feel good.

And what the customer says makes me feel even better – that “PAS products are better integrated with the control platform than the products from the platform vendor themselves.”  Wow.

So now, at the close of my first week here, I know my decision to come was the right one.  Good people. More products that you can shake a stick at.  A dose of superb scientists.  Strong growth.  And best of all, tons of room to take the business forward.

Yes, it’s going to be a good ride.  Oh yea, it is...

Welcome to PAS! Now let's change the name...

Well, I did it.

Having worked the corporate ladder thing up to VP over at Honeywell, and then having started and run my own firm for 5 years, I jumped over to a mid-size company - PAS - aka Plant Automation Services over in Houston, TX.  This is going to be fun... stay tuned and you'll see why.

I've been here just 4 days, but everywhere I look there is room to contribute.  Attribute it to high growth, too little marketing or whatever - there is plenty of room to pull an even more fantastic business together here, and I am excited by that.

Where do I start?? There are so many opportunities, hidden gems, great people...  First, though, we're going to change the name of this place - Plant Automation Services for a company with so many software jewels - it's just plain wrong.

So I told Eddie (he's the majority owner and CEO) what I thought:  the name has got to go.  We're going to rename this place to fit what we have.  People and Asset Solutions, Inc.  We can still be PAS, but we stand for so much more than just Plant Automation Services.  He agrees.  So far, so good.

I reckon that's a pretty good start for the first 3 days.  What next?  You'll just have to come back to find out.

Ciao!