Non-financial Investment Justifications

(Sidebar to "Justify Your Automation" from December 2006 issue of Automation World)

Not all investments in automation technology can be put into strict financial terms. Sometimes, money has to be spent to bring the plant into compliance with government regulation. The pharmaceutical industry is revamping its production technology to meet U.S. Food and Drug Administration (FDA) rules on tracking production methods and genealogy. The same is true of the food and beverage industry, which also has to add track-and-trace capability to its automation systems. Other non-financial justifications for new technology include safety and security in plant operations.

 

Investing for compliance has become a leading justification for new automation now that the government is putting regulatory pressure on plant operations. “Compliance is a justification for technology,” says Peter Martin, vice president of strategic ventures at Invensys Process Systems Inc., an automation supplier in Foxboro, Mass. “You won’t be compliant with Sarbanes Oxley (a public company financial accountability law) unless you look at automation.”


Other factors such as standardization also justify automation investment. “Not every project has to be justified financially,” says Yves Dufort, director of strategic programming at automation software vendor Wonderware, in Lake Forest, Calif. “If your technology is reaching obsolescence, the justification may be business continuity. Or there may be a merger, and the justification is standardization.”


Ultimately, even the non-financial justification for automation investment can be boiled down to business interests, since there are costs involved in not meeting the demands of safety, security, standardization or compliance. “Even issues such as safety, security and compliance are economic issues,” says Invensys’ Martin.

 

To see the main story this sidebar was taken from - "Justify Your Automation" - please visit www.automationworld.com/view-2757

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