Digital Transformation

The Long and Tough Road to Digital Transformation for Oil and Gas Companies (Part 2)

What makes this especially difficult for oil and gas firms is that these companies often have an older workforce and may have a hard time coping up with digitization.

In the first part, we’ve detailed how digital transformation is a must for companies in all sectors. However, a good majority of firms who start their digital journey fail. We also gave you a rundown of the seven essential elements of successful digital companies.

The seven elements of successful digital transformations for oil and gas companies

But what do all these entail? Read on and find out.

  1. Have a digital vision that can inspire staff and is owned by top executives.

The leadership team will need to come up with a bold vision for digital solutions and communicate this vision throughout every part of the business. They should inspire their employees and encourage them.  It will help if your employees know what these technologies are capable of, but you should also give them an idea on how these solutions will make it easier for everyone to meet the company’s most important objectives such as lower accident rates, faster drilling times, or more revenues.

  1. Focus on designing a balanced digital roadmap that the business owns.

With digital vision communicated to and ingrained in every employee, you should have a roadmap that will detail the use cases that will guide your employees. This will help you focus on the more essential initiatives first. This allows you to avoid diluting management attention and efforts that might happen if you start with too many projects all at once.

The use cases will help you solve real issues that your staff faces every day. They should also have a definite value, such as helping your employees be more efficient or decreasing costs. You should even know the decisions being made with these processes. You could then look at what the data says and find digital tools and solutions to improve and hasten the decision-making.

Be sure to include both big-scale initiatives and smaller projects in this roadmap.  Winning small with less effort and visible benefits will help build momentum for the big-value use cases. But having too many quick fixes might also mean fewer resources for the flagship big-scale projects.

  1. Be holistic and practical when it comes to IT architecture and data governance.

Companies in the oil and gas sector might have problems capturing data effectively, which is necessary if they want to effectively leverage their new digital solutions. These companies are dealing with huge volumes and different types of data. They would have to clean all of these while enhancing and then contextualizing it before being used.

Moreover, you have legacy systems that might make integration a bit more complicated, while poor data governance might lead to poor quality of data. For this reason, you should design your own data architecture and institute data governance policies via your use cases. Utilize the data first before building your data lake. This will help you know for sure that the technologies that you choose will be helpful when you use it in real life.

It also helps to have a flexible and modular data architecture, which makes you more agile. Furthermore, you might want to include plans to simplify your data architecture for future use. You will need to have your business and IT staff work closely together. The goal is to make sure that you figure out digital solutions that can reduce your organization’s inefficiencies.

  1. Make sure that your business processes can make the most out of digital solutions.

Digitization will give you access to insights that you can use for better decision-making. To make sure that you get the fullest insight value, you will need to redesign your processes.  It is for this reason that companies who succeed when going digital spend a bulk of their time managing change. You should involve your end users – from well designers to drillers and field operators, every step of the way.

This is the only way that you can ensure that the digital solutions you are planning to use are user-friendly, while also being able to deliver new information and insights. Everyone involved would need to be trained in using the latest tools.

  1. Digital may require a change in company culture and employees’ way of working.

Set aside the old way of doing things and change your mindset. Digital encourages information sharing with your partners, suppliers, and customers. Decision-making does not always come from the top, and cautious planning gives way to boldness and decisive action. Oil and gas companies might shiver at the thought of all these, but they stand to benefit a lot when they change their mindset.

This is not to say that traditional values do not have a place in a digital company. For those in the oil and gas industry, you will still need to practice traditional value to make sure that you keep your operational safety and risk management intact. However, there should be areas in your business that can foster speed, have a digital mindset, and agility, among other efficient behaviors.

Introduce new working processes alongside the digital use cases you have. Focus on a fail-fast mentality, quicker decision-making, and agile methods. You should have autonomous teams that are both digital and legacy experts. You should develop new responsibilities and roles. For example, business managers who are also into tech and digital products.

  1. Developing digital talent and environment that will help you in the future.

Digital transformations often involve new skills and capabilities. Executives and employees should understand the value of these digital solutions and adopt a new mindset and ways of working. IT should depend more on data and software development, instead of fixing somebody’s computer.

You should train your employees or hire somebody who has skills in advanced analytics, artificial intelligence, big data, data sciences, and other areas. What makes this especially difficult for oil and gas firms is that these companies often have an older workforce and may have a hard time coping up with digitization.

What can you do? Create a capability and talent strategy that allows you to see where your employees are lacking. Recruit more employees with the necessary skills or train staff. Develop digital talent in-house rather than looking for a third-party company who can provide the technology and service to you.

  1. Focus on strong governance and value creation.

Even when you have implemented digital solutions for your use cases, you will still need to be relentless in stopping initiatives that aren’t working. Introduce KPIs that will measure these use cases and their contributions to the overall business performance.

You should implement the digital roadmap stringently. Executives and business leaders should be able to use the roadmap to ensure that scarce resources are used efficiently. These resources should deliver value, rather than volume.

Photo courtesy of Iain Cameron.


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