Oil and gas companies are facing disruption and uncertainty like no other time in the industry’s history. Already, companies were navigating challenges related to pricing outlooks, evolving energy demand and decarbonization. The global COVID-19 pandemic accelerated this environment — prompting a historic drop in crude prices and cost-cutting measures in a way not anticipated even a year ago.
To meet these challenges, oil and gas companies are looking to digital technology to drive efficiency and productivity into operations, transforming how they operate and truly doing more with less. This comes with its own set of challenges: digital technologies are evolving rapidly and companies must determine which to embrace and adopt, where to integrate them into the value chain and how to fully leverage them to extract maximum value from the investment.
The June 2020 survey of oil and gas executives clearly demonstrates the industry understands the most promising path forward. Executives need the right digital technology — and a workforce with the skills and training to maximize those tools. For example, our survey found most industry insiders recognize the competitive advantage a digitally enabled enterprise can deliver: 80% are investing at least a moderate amount in digital technology today, relative to their budget. Further, not one participant responded that their company is planning no investments in digital. It is clear the current environment makes these investments more urgent rather than less.
But how well positioned are oil and gas companies to earn back the value of their investment in technology, especially in the current environment? And more pointedly, how well positioned are their workforces — based on the technical and adaptive skills needed for these technologies — to successfully enable this digital transformation?
Our survey revealed significant skill gaps even among current users of digital technologies. Workforce composition and training are widely acknowledged barriers to technology adoption, and the skillsets needed to onboard and extract value from digital technologies — data analytics, cybersecurity, data science, design thinking, artificial intelligence and others — far outpace the current level of maturity across the industry.
Not surprisingly, 92% of the executives we surveyed recognize the ability to reskill quickly is crucial. The challenge confronting the sector can be summarized in three figures: nearly 60% of the workforce needs to be reskilled or upskilled, 43% of the workforce will be reskilled or upskilled, and it will take 10 months to reskill the average worker.
To achieve this, companies must:
- Overcome cultural and organizational barriers, including resistance to change; values and mindset; and governance and organizational design elements that hinder flexible, rapid decision-making.
- Solve for reskilling fundamentals such as developing badge programs and building curricula that curate open-source learning material and align to intentionally applied, on-the-job learning experiences.
- Proceed quickly despite the impulse to sacrifice these efforts to other priorities in the worst market many of us have ever experienced. If companies wait to come out of the downturn to invest, they may not come out of the downturn. Skills will be the competitive advantage.
The ability to make difficult choices and find the right balance will determine who emerges best positioned to thrive in the post-pandemic marketplace.