Oil-field Services Firm: Innovation Diagnostic Framework

The transformation is projected to generate millions of dollars in new revenues.

The client is an oil-field services firm that designs, develops and delivers technology products and services for energy companies. Publicly traded and with annual revenues exceeding $10 billion, the client is organized largely along product lines, each with separate marketing, technology, manufacturing and operational arms.

Accenture research into high-performance business components confirms that innovation is critical to an organization’s ability to build and sustain competitive advantage.

The energy-sector client possessed strong technology and R&DE capabilities. Compared to its peer group, however, it was investing a higher percentage of revenues in R&DE yet receiving smaller returns.

Accenture had already provided the client with supply chain, technology and oil and gas industry experience when the R&DE issue was raised. Accenture engaged the client by leveraging its capabilities in two areas: fast innovation, which helps speed time to market and improve return on research investments; and product life cycle management, which offers an approach that supports individual product strategies as well as enterprise needs.

Impressed with the data-driven approach to improving innovation processes, the client asked Accenture to begin work by taking a deep look into its current R&DE processes and by offering specific improvement ideas.

Accenture began by applying its fast innovation diagnostic framework to detect weak spots in R&DE workflows. Five consultants conducted more than 80 executive interviews, analyzed project and product pipeline data, and worked with the client over three months to identify improvement opportunities in processes, tools, metrics, capabilities and organizational structures.

Three themes began to emerge:

• The need for high-level oversight. An excessive number of projects in the client’s pipeline pointed to a lack of an effective governance structure. Due to a shortage of high-level oversight, strategic prioritization of projects was missing and project delays occurred.
  
  
• Organizational barriers to innovation. The client’s organizational structure, largely segregated by product lines, was hindering the introduction of broader solutions to satisfy emerging customer needs.
  
  
• Lack of robust knowledge management. The client needed more effective technologies and processes for storing, retrieving and sharing relevant information to researchers, developers and engineers.
  
  

With a strategic road map outlining how greater value could be generated, Accenture identified R&DE opportunities with hundreds of millions of dollars in additional revenue potential, along with increased process efficiency and effectiveness.

Accenture recommended a transformational program with three essential capabilities:

• R&DE governance. Accenture suggested a high-level executive role in governance, and the client has since hired a chief technology and marketing officer to help align the R&DE portfolio with corporate strategy.
  
  
• Lean processes. Greater workflow rigor in the product and service development pipeline can reduce project delays and deliver new products and services faster to market.
  
  
• Market-focused innovation. Accenture advised directing key technology, engineering and marketing capabilities to the most promising market segments.
  
  

Once fully implemented, the transformed R&DE organization is projected to help generate hundreds of millions of dollars in benefits over the next five years. The vast majority of the projected gains would accrue due to additional revenues from innovations being introduced earlier to market and providing competitive advantage for the client.

Unified, lean and strategic R&DE is designed to enable the client to continually renew itself—an essential capability for high performance.