Hexagon adds j5 to factory operations offering

Jan 17, 2019 | Hot Topics

Hexagon today announced that it has added j5 International to its PPM division. j5 makes data collection solutions that replace papers, clipboards, spreadsheets and many of the (old school) processes used to gather operating data with a structured, configurable and enterprise-wide digital operations management system. Why? To create repeatable, traceable logbook recording, work instructions, inspection round reports and so on, and shift handover, incident management and safety procedures.

I hadn’t heard of j5 before the announcement, but know the problem very well from years of speaking with plant operators in oil and gas, chemicals and other process industries. Humans get distracted, remember data incorrectly, sometimes work from left to right rather than right to left. We forget the number on the dial and guesstimate. And with many new pieces of equipment being replaced with transmit-capable sensors, it makes sense to automate as much as possible.

j5 has interesting industrial roots. According to the company, it was founded in 1998 by a Nicholas Hurley, who had developed an electronic logbook at a gold mine in Australia a decade earlier. The commercial offering has grown from that to a broader suite of browser-based applications for operations and process safety. Its j5 Operations Management Software is used by over 65% of the downstream (meaning refining) and 100% of the upstream (extraction) oil and gas assets in Japan. This led to an R&D philosophy at j5 that uses continuous improvement (Kaizen) methodologies. In total, j5 says it has over 30,000 j5 Operations Management Software users worldwide.

Why j5? Why now? Hexagon CEO Ola Rollén said in the announcement that “[t]he operations applications from j5 International significantly enhance the value of our HxGN SDx portfolio which is used to create and manage the ever-evolving digital twin, where both engineering data and documentation are created, maintained, and viewed throughout the facility lifecycle. By combining our software portfolios, customers now have the ability to incorporate real-time situational awareness of facility operations into their digital twin, a business imperative for continuously improving the operations and maintenance of complex facilities.”

For its part, the j5 team says it sees synergies between the PPM offering and its own: “The people using the j5 applications will benefit from access to information such as P&IDs, 3D models and other design information that they had limited access to in the past. The Hexagon PPM portfolio benefits from access to front-line information created by Operations personnel. Bridging the field with the design provides a safer more efficient facility and ensures that the digital twin stays a twin of the physical facility.”

No financial details were released, other than Hexagon’s usual that it “has no significant impact on Hexagon’s earnings”.

You may recall that Hexagon usually talks of its revenue progression along multiple dimensions, two of which are acquired and organic growth. At its June 2018 Capital Markets Day, Mr. Rollén said that, through 2020, mergers and acquisitions are expected to add 3% to 5% of growth per year. At Hexagon’s overall revenue of maybe €3.7 billion for 2018 (they haven’t announced results yet, so that’s a forecast/guess), 3% is over €100 million … Hexagon still needs to acquire quite a bit of revenue to hit that target level, but then, it’s only mid-January so there’s plenty of 2019 left to go.