Digital Transformation

How Oil and Gas Companies Can Prepare for Digitalization

Digitalization should always start at the top and trickle throughout the entire organization, especially with oil and gas companies.

Everything is going to be digital. It seems that every business worth its salt is planning on some sort of digital transformation. They are afraid of getting left behind, of competitors edging them out, and of not being able to take advantage of the latest technologies.

Digital transformation of the oil and gas industry is pretty much a given. These companies will need to profit in a different regime. There is simply no room for inefficiency.

Some benefits of digitalization

There are a lot of advantages when you digitalize your operations. But two main benefits are often mentioned.

  1. For one, you get to save on maintenance cost. For instance, different equipment and rigs show wear and tear differently. The same equipment placed in different locations and exposed to different conditions will depreciate differently. With digitalization, you can monitor everything that happens to these equipment and assess the level of wear and tear on each one. This will help your company optimize your maintenance plan.
  2. The other major benefit is availability, or not having too much downtime. Sensors on your equipment can help lessen the time you need to assess whether to shut down a particular equipment or not.

There is no question that oil and gas companies will have a digital future. The downsides to resisting digitalization are scary. Enterprises who do not go through a digital transformation will not only lose their revenues and have lower profits, they also stand to have other problems. Obsolete and outdated technology can be wildly inaccurate. It can affect your productivity. It can even lead to bigger, more disastrous problems later on.

Market forces are changing for the oil and gas industry and it’s going to be difficult to keep up and survive if you don’t adapt to these changes. Digitalization of operations will be very important in taking advantage of new opportunities and value. It can also help make your operations more efficient.

Furthermore, it can also benefit your safety procedures, making your entire operations safer. Lastly, it helps you achieve operational excellence for the entire enterprise.

For those who are still starting out on their digital journey, it is important and crucial to know where to start. Or else you get overwhelmed by complexities that the newest innovations often bring with it.

 

How can you prepare for?

 

So now you know that digitalization is very important to oil and gas companies, it is time to kick things into action. How do you start?

  1. Make sure you have high quality, comprehensive, and complete data.

Data is very important in digitalization and is perhaps the most important asset of every business. Even so, many oil and gas companies are not using the data they have effectively. The truth, however, is that the typical company does not use the data it has.

According to Frost & Sullivan, we only use less than five percent of the data we collect. A good majority of the collected data we have are used selectively, not used at all, or is used inconsistently. To start on your journey, you should make sure that there are no problems or hindrances in using your data.

As such, you should make sure that your data is of high quality. That means that it should be sufficient and that all the required values are collected. The data should also be reliable and accurate. Furthermore, you need to be able to audit and govern your data.

  1. Make sure that your infrastructure is ready.

Having high-quality data is just the first step. Employees and users should be able to access and work with it. This scenario means that you should have the right storage and communications infrastructure in place.

These infrastructures should also be secure so that your data are in good hands. The right amount of security can prevent unauthorized access, misuse, and theft of data.

CIOs should check the physical infrastructure and see if there is a clear delineation between business and plant networks. Alongside that, you should also consider the performance, scale, and size of these infrastructures. Moreover, you should ensure that these resources are compliant with regulatory requirements.

You should also update your security software, tools, and systems. It is very important that there is adequate monitoring. Some of the questions you should answer at this state include:

  1. Do you have an incident response plan?
  2. Do you have a disaster recovery plan?
  3. Is there an easy way to add or delete users?
  4. Can you allow external access?
  5. Are third parties (who access your data) covered by the policies you have for your employees?

Additionally, your cloud infrastructure should also be updated and aligned with the entire organization.

  1. Do you have the support and cooperation of everyone?

The process of digitalization needs more than just technology. You will need an informed leadership. These leaders will have to accept the reality that consumers and users are now empowered. They will also need to understand the inner workings of the digital world, and work hard to achieve the required investments.

These leaders will need to realize that technology is changing, and it is changing fast. They will need to understand that digital business is all about agile development, continuous refreshment, rapid development, and quick recognition of failures. They should be able to stop or postpone initiatives that have failed.

You need strong leaders who are comfortable with the fact that end users will be able to make better business decisions that takes less time to arrive at. As such, they should encourage users to do just that. What’s more, they will need to understand the technology and how it works.

For instance, they should know that applications and control systems that utilize data would often have a more holistic recommendation. This can help the plant be more efficient.

* * *

Digitalization should always start at the top and trickle throughout the entire organization. It is only in this manner that your digitalization plans will gain widespread acceptance and adoption. What’s more, the entire organization should also accept the changes being proposed.

Photo courtesy of Enrico Strocchi.

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