Operational Assurance: Modeling the Hidden Costs of Non-Assurance
Most energy companies know how to measure output, uptime, and efficiency. They can tell you the cost per kilowatt-hour, the margin per barrel, or the...
In the past, managing complex environments meant relying on internal controls with a narrow focus on isolated functions. Each system was monitored and maintained within its own boundaries, with separate teams, procedures, and definitions of success. That worked when systems were self-contained and interdependencies were minimal.
Today’s world is different. We now operate vast, interconnected systems-of-systems (SoS) where software threads through every critical function. A single unintended action in one domain can cascade across networks and geographies in seconds, turning a minor deviation into loss of life, severe financial harm, and lasting damage to trust. The scale and speed of modern failures have erased the luxury of post-incident forensics. Compliance expectations now demand real-time, provable traceability of what happened, who acted, why decisions were made, and whether the intended results were achieved.
Operational Assurance (OA) is the continuous discipline that senses, decides, acts, verifies, and records across interconnected systems to deliver provable outcomes in real time. It replaces isolated controls with coordinated execution, ensuring that sensing, decision-making, action, verification, and traceability form an unbroken loop. It is the only discipline designed to deliver certainty in an environment where uncertainty is no longer an option.
While the need for OA is clear, the path to achieving it is far less defined. Most organizations still lack a methodology for managing highly dynamic, interdependent environments. They continue to rely on fragmented tools, ad hoc processes, and siloed expertise, hoping those elements will somehow align into resilience. To borrow a phrase, hope is not resilience. SoS are inherently volatile. An unintended action in one component can ripple across others in ways that remain hidden until the damage is irreversible. The 2024 Portugal power outage, which began with a localized equipment issue and escalated into a nationwide disruption across transportation, healthcare, and communications, remains a stark reminder of what happens when the absence of a unifying methodology leaves organizations in reaction mode rather than control.
Part of the problem lies in where most industries begin. Development cycles are bottom up, with suppliers building and testing quickly, fixing what breaks, and patching issues later. Rarely is there a disciplined, top-down definition of functional requirements, hazard assessments, or even a systematic consideration of cyber threats before design begins. OA is the missing bridge between that problem domain and the solution domain. It does not promise perfect security and it cannot eliminate exposure entirely. Complete isolation remains the only way to do that, but it is not an option for modern connected systems. The goal is to define acceptable thresholds of risk, enforce containment strategies like the bulkheads of a ship, and prove that those boundaries hold under stress.
Closing this gap requires more than the addition of new tools. It demands a framework designed for the realities of interconnected environments. At its core, OA is a closed loop that never stops. It begins with sensing, the comprehensive and timely collection of data that eliminates blind spots and captures early signals of trouble. That information feeds into decision-making, where validated logic is applied locally and centrally to determine the safest next steps even when connectivity is disrupted. Those decisions are transformed into action, executed precisely and rapidly with safeguards that prevent unintended outcomes and with safe states engineered as the default. Verification follows, confirming that each action achieved its intended effect and triggering adjustments or rollbacks if it did not. Traceability then preserves the entire sequence in an immutable record, locking in the evidence of what occurred and enabling both compliance and accountability. Like a heartbeat, this loop adapts continuously to new inputs, shifting conditions, and evolving threats. It is not simply the presence of each function that creates resilience, but their orchestration into a living discipline — and this approach is not theoretical, its value is measurable across industries.
In transportation and logistics, the electrification of fleets means integrating tractors, trailers, and smart infrastructure, each with its own firmware and safety logic. A single anomaly in a trailer’s battery management system can disrupt tractor performance, charging schedules, and depot operations. Without operational assurance, these interdependencies multiply failures instead of enabling performance.
In energy, oilfield rigs blend mechanical, electrical, hydraulic, and digital systems where downtime costs are measured in hundreds of thousands of dollars per hour. As datacenter demand for power grows, utilities are no longer judged only on how many megawatt-hours they can deliver but also on their ability to guarantee availability. Anything above ninety-five percent uptime commands a premium, creating a direct business case for operational assurance as a means to both reduce outages and prove reliability.
In healthcare, hospital networks interconnect patient monitoring, surgical equipment, building automation, and IT systems. A single failed imaging update can ripple into patient safety, compliance reporting, and financial liability. In this setting, operational assurance becomes not only a safety imperative but a regulatory necessity.
No industry illustrates this better than automotive.
A car today is a rolling SoS, integrating advanced driver-assistance, propulsion, battery management, infotainment, and climate control, often from different suppliers and running on different software stacks. Imagine a scenario where the battery management system detects an overheating cell at highway speeds. The anomaly is sensed, safety logic immediately reduces propulsion power, the action executes within milliseconds, and verification confirms the cell temperature has stabilized. Traceability then locks in the full sequence of events in a tamper-evident log. Proof is built into the process.
Yet not all failures are so straightforward. The CrowdStrike outage, where a single flawed update disrupted systems worldwide, showed how a lone commit can ripple across fleets. If the same occurs in a vehicle, new questions emerge: did the faulty commit originate from the OEM or from a supplier, did it pass compliance gates, and if it did, is the compliance process itself broken? Operational assurance does more than manage the failure. It creates accountability across the entire chain. And it is not always about shutting systems down. Sometimes fail-active states, where a vehicle remains operable enough to complete a job before service, represent the safest outcome provided risks are understood and documented.
Across all of these examples, a common misconception emerges: isn’t this already covered by functional safety? The answer is no. Functional safety was designed for bounded, largely self-contained systems. It was never intended to handle the dynamic risks of connected environments where software, hardware, and networks interact across boundaries. OA fills that gap. It provides the structure, discipline, and proof required to manage interconnected environments with confidence.
This is not just a technical safeguard. OA distributes accountability across OEMs, suppliers, regulators, and operators, aligning financial and legal responsibility with operational truth. It shifts the economics of risk by enabling monetizable insight loops. The same traceability that proves compliance can also drive continuous optimization, benchmarking, and predictive services that generate recurring value. The more complex and dangerous the environment, the more valuable operational assurance becomes.
Organizations that adopt it will operate with resilience and win the trust of stakeholders who demand certainty over speculation. Those who ignore it will keep patching crises with fragmented records, trusting temporary fixes to hold. But the complexity inside a modern vehicle, a drilling rig, or a hospital now rivals that of entire industrial networks. In that reality, inaction is not just a bad strategy. It is an abdication of responsibility. The next outage, recall, or safety incident will not wait for an organization to catch up.
In a world where milliseconds matter, operational assurance is no longer optional. It is the price of staying in business.
Most energy companies know how to measure output, uptime, and efficiency. They can tell you the cost per kilowatt-hour, the margin per barrel, or the...