Over the last several weeks, I have been talking to many customers, partners, and fellow SAP employees about “Digital Transformation” and what that means for the Oil & Gas industry. Particularly, what does it mean in a market of severely reduced commodity prices, and the growing above ground risks and uncertainties? In this context, is any executive within the industry really contemplating how the technological advances in hyper-connectivity, supercomputing, cloud computing, the Internet of Things and cyber-security can help them make and sustain the cost reductions that are needed?
The range of discussions has been – not surprisingly – very broad, from the firmly entrenched, “we’ve been digital for decades and the industry has transformed already – have you already forgotten about the ‘digital oilfield’ and the ‘shale revolution’?” to the “now is the time to reimagine everything”. The latter was punctuated by one meeting where my colleagues and I were momentarily stunned to learn this company’s board had recently decided to drive a digital transformation, without needing to know all of the usual endless details of the destination or journey – they simply concluded it was necessary by comparing how their personal lives had been transformed by digital against what they still did not have at work.
My conclusion; regardless of where you are on this spectrum, it’s healthy to reimagine everything.
- Re-imagine business models that are unconstrained by traditional vertical integration, relying more on digital integration to optimize profitability and reduce costs. Do we need to own those assets, own this fuel inventory, or have this work done by employees instead of partners or contractors?
- Re-imagine business processes and use digital technology to integrate, collaborate and automate across enterprises, focusing on managing exceptions to the already modeled and optimized business outcomes. Why can’t we establish a business rule that allows for an entire oil movement to be completely “touch less”?
- Re-imagine the roles and ways of working that exploit the new user experience technologies to fully immerse your customers, suppliers, and your workforce in the information they need in context. How can I provide the safest, most productive set of work instructions to my workers – employees or contractors – at the point and time of the actual work?
We certainly will not all envision the same things, but this process of thinking out of the box and challenging each other across all dimensions of the Oil & Gas industry’s business will certainly lead to both the needed quick hits and the strategic ones. I think that’s generally a good prescription for health in any business and particularly in our current market context.
If you are interested in such reimagining and learning from others that are either ahead of you or behind you in this process, I would invite you to join us at the upcoming Best Practices for Oil & Gas conference in Houston on September 22-25. Regardless of where you are on the spectrum of the topic of digital transformation, you are sure to take away something that will help you Seize the Opportunity of the Upswing – whenever that may come.