The current industry downturn and reduced capex could make it difficult for many companies to commit the necessary capital for digital transformation initiatives. Companies must take a long-term view on digitization, think of creative ways to offset the capital investment and ensure that maximum value is realized from their investments. The right choices made on the journey to an integrated, data-driven and digitally enabled upstream function can help companies make the most of their investment.
Buy vs. build
Companies pursuing digital initiatives often face a buy-or-build dilemma. Many large oil and gas companies may possess the ability and capital to develop a proprietary common data platform in house. However, they must evaluate if buying or co-creating solutions with a service provider could be quicker and more cost efficient. The latter could also allow a company to evaluate multiple options that are available in a relatively short period of time and run pilot tests before making large capital commitments.
Phased implementation and measuring value
Once the solution is finalized, companies looking to avoid large up-front payments could consider a phased implementation (e.g., at select business units) and scale up over time. Measuring value throughout this process is important. While companies consider estimated benefits when making investment decisions on digital initiatives, many fail to track the actual benefits realized after implementation and document lessons learned.
Integration and scalability
Solutions or applications that cover the complete field life cycle should be preferred over those that cover only specific departments (such as land management). Similarly, products with end-to-end functionalities, ranging from digitization of documents and data integration and reporting, to decision-making, should be the preference. Integration with the organization’s existing software applications (e.g., ERP) and scalability to match the company’s operational footprint will also help unlock synergies.
While upstream oil and gas processes are commoditized, some extent of customization is often required in digital platforms to meet the organization’s unique operational and reporting needs. Solutions that offer a fair amount of customization should be preferred over off-the-shelf ones that may solve only part of the problem and result in lower adoption.
When purchasing external solutions, companies must also ensure they have a clear view regarding who owns the data and how it is shared and used. They should choose vendors and service offerings based on their preferences or degree of comfort around sharing their data externally.
Companies must go beyond simply coaching employees on new technologies and centralized data management practices and instil a shift in mindset away from working in silos to more shared and transparent ways of working.
Digital integration positions companies for success in a new market environment
Effectively integrating digital technology across oil and gas organizations will help deliver tangible results, reducing costs and improving efficiency throughout the oil and gas value chain. Companies that want to remain competitive throughout the energy transition and in a changing world can leverage their data to help improve productivity, streamline operations, accelerate decision-making and eliminate costly delays and errors.