CRUSH TRANSACTIONAL WASTE Leveraging Smart Contracts in Capital - - PowerPoint PPT Presentation

CRUSH

TRANSACTIONAL WASTE

Leveraging Smart Contracts in Capital Projects

FEATURED FEATURED SPEAKER SPEAKERS

Bill Arend, DG Chief Commercial Officer

William was Director of Operations for Aker Solutions Drilling Technology (later MHWirth) and managed key aspects of NOVOS open architecture controls project for NOV. He was a commissioned officer in the U.S. Army where he held leadership positions. William leads product strategy and design for Data Gumbo’s enterprise-grade blockchain network. Peter Dumont, P.E., is the CEO of PrairieDog and a member of the OS2 research team led by CII at the University of Texas at

• Austin. He also is an Executive Advisor with the Premier

Resources Group. He is the immediate Past President of CURT and has more than 25 years of engineering and construction experience developing and executing capital projects globally; and running operations for EPC service organizations. Arend has 25+ years of experience building and leading top-performing sales teams at Workday, Oracle and Microsoft. His teams have helped companies drive productivity and automation by leveraging technology from ERP, CRM, HCM, and Supply Chain.

Peter Dumont, PrairieDog CEO William Fox, DG Chief Product Officer

AGENDA

Introduction Peter Dumont — Transactional waste — Benefits of smart contracts Bill Arend — How smart contracts work William Fox — Demo — Use case — Quick steps to implement Q&A 9:00 – 9:05 9:05 – 9:20 9:20 – 9:30 9:30 – 9:40 9:40 – 9:55

PETER DUMONT PETER DUMONT

CEO, PrairieDog

Peter Dumont, P.E., is the CEO of PrairieDog and a member of the OS2 research team led by CII at the University of Texas at Austin. He also is an Executive Advisor with the Premier Resources Group. He is the immediate Past President of CURT and has more than 25 years of engineering and construction experience developing and executing capital projects globally; and running operations for EPC service organizations.

Project Delivery is Not Delivering

• f mega-projects

>$1B experience cost overruns

• f all projects FAIL

to meet one or more business objectives

• f all projects are not

completed within 10% of budgeted cost or schedule

• f project capital is

WASTED on transactions

Source: B. Bechtel Source: CII Source: CII Source: CII/NTNU

“I think the current model within our industry is broken.”

– Ian Edwards, Interim CEO, SNC-Lavalin (on August 1, 2019, after SNC-Lavalin reported a $1.6B loss and their stock dropped to a 14-year low)

Where Project Capital is WASTED

(Non-Residential Construction)

Source: CII/CURT OS2 Research

Why So Much Waste?

• “Trust Tax”
• Compounded mark-ups; hierarchical

supply chain

— Multiple layers of $protectionist

• Poor financial health

— Late payments (trade credit) — High interest debt financing

• Slow and onerous procurement process

— Time consuming RFP/Bidding/PO — Value-based selection is rare

• Complex and fragmented projects

Opportunity to Re-Capture Lost Value

Operating System 2.0 (OS2) Overview

OS2 Transformational Focus Areas

Goal Congruence and Alignment Supplier Engagement Dynamic Risk Modeling Smart Contracts and Blockchain

Smart Contracts + Blockchain

IoT Data

AWP/ Lean Tools nD Design Models Site Reality Capture QA/QC Systems GPS/RFID Material Tags Example Data Sources Various Data Sources

Standard Data Schema

USER INTERFACE Smart Contract Blocks Transactions Shared, single source of truth – immutable data foundation Assets and Services Owner

PM Systems, ERP, Insurance Co. etc.

Contractor

PM Systems, ERP, Insurance Co. etc.

Owner Bank Joint Venture Partner General Contractor Engineer Vendor Consult Sub- Contractor Fabricator Distributor OEM Logistics Material Finance Tax Insurance

Current: Paper Based

Myriad Systems and Contracts

Block 3

Block 4

Block 5

Block 1

Block 2

Bank Owner Engineer General Contractor JV Sub- Contractor OEM Consultant Distributor Vendor Logistics Fabricator

Shared, Single Source of Truth

vs. New: Digital

The Power of Smart Contracts

Touchless Transactions

Owners Providers

— receive early pay discounts — only pay for what is received — reduce overhead costs — achieve lower billing rates — achieve full digital twin — are seen as a “client of choice” — minimize disputes — attract best companies and teams — achieve provenance & traceability — can scale without additional G&A — position for future transformations — get paid much faster — free up working capital — reduce overhead costs — automate the invoicing process — eliminate contract leakage — improve client relationships — minimize disputes — benefit from trust and transparency — leverage current systems — can scale without additional G&A — position for future transformations

BILL AREND BILL AREND

Chief Commercial Officer

Arend has 25+ years of experience building and leading top-performing sales teams at Workday, Oracle and Microsoft. His teams have helped companies drive productivity and automation by leveraging technology from ERP, CRM, HCM, and Supply Chain.

• A smart contract is a computer protocol

designed to automate the performance of a contract; it contains the business logic

• f the relationship
• The smart contract is applied to a

specific service or scope and is irrevocably linked to the natural language contract through an addendum

• The terms and conditions (rates,

measurements, timing, etc.) of the smart contract are negotiated and agreed

How to Integrate Supply Chain: Smart Contracts

Owner Smart Contract Contractor

• The data required to verify the conditions
• f the smart contract is sourced from

existing systems / technologies (project execution tools)

• The smart contract defines the data

specification and the data is brought into a structured “Industrial IoT” via APIs or

• ther means
• The smart contract then executes the

transaction using the data as defined by the encoded business logic

How Transactions are Executed: Verifiable Data

Industrial IOT

Owner Smart Contract Contractor

ERP ERP Data Sources Data Sources

• The transaction executed by the smart

contract is posted to a “block” in a distributed ledger viewable to the parties

• The block is verified through the “consensus”
• f the smart contract parties and can be

pushed back to company systems of record

• The block stores all relevant data and

documentation required by the smart contract and it cannot be changed

• Payments are automated and can be

initiated immediately

How Transactions are Recorded: Blocks in a Ledger

Industrial IOT

Owner Smart Contract Contractor Transactions Block Assets or Services Block Block

ERP ERP Data Sources Data Sources

GumboNet™

Engineers Owner EPC/CM Regulators Vendors and Suppliers Labor Licensors Insurance and Safety Sub- Contractors Fabricators

The Industrial Blockchain Network:

—Invoicing —Operating Expenses —DSO —Free Cash Flow —Provenance

Manufacturers

WILLIAM WILLIAM FOX FOX

Chief Product Officer

Prior to Data Gumbo he was Director of Operations for Aker Solutions Drilling Technology (later MHWirth) and managed key aspects of the NOVOS open architecture controls project for National Oilwell Varco. William was a commissioned officer in the U.S. Army (2005–2010) where he held leadership positions in South Korea and

• Bagdad. William leads product strategy and design for

Data Gumbo’s enterprise-grade blockchain network.

What Data Gumbo is doing today: — Capture field tank level and flow sensor/meter data at production sites and disposal wells — Capture truck and SWD tickets — Generate pre-approved payments based on price book and field measurements

Bulk Commodities Smart Contract

How blockchain helps: — Guarantees only agreed pricing is applied — Removes doubt about timing and volumes — Both sides get complete record of what material moved where and when

SM SMAR ART T CON CONTRA TRACTS CTS AND AND BL BLOCK OCKCHAIN CHAIN

HO HOW W TO O ST STAR ART

— Determine use case(s) to attack first — Value stream map current vs. future state to identify waste reduction and business value — Get buy-in from stakeholders — Write Smart Contracts — Connect to source data systems — Connect to payment systems — Test (30 days) — Go live — approx. 3-4 months depending on source data access

KEY KEY

TAKEAWAYS TAKEAWAYS

No Upfront Costs No Need to Rip and Replace Fast Time to Value Proven Technology Begin Now

• vs. Future

Any questions? bill.arend@datagumbo.com pdumont@prairiedogvp.com william.fox@datagumbo.com

Contact Us

Houston Office 1334 Brittmoore Road, Suite 175 Houston, TX 77043 281-909-0781 www.datagumbo.com Norway Office Bryggerikaien 16 4014 Stavanger, Norway +47 900 64 016 facebook.com/datagumbo twitter.com/DataGumbo linkedin.com/company/data-gumbo instagram.com/datagumbo PrairieDog Office 2245 Gilbert Avenue, Suite 100 Cincinnati, OH 45206 281-779-7652 www,prairiedogvp.com