The time is ripe for digital disruption in the oil and gas industry.
Low prices and a volatile market have resulted in a typical response—cut costs (both in terms of headcount and wage freezes), renegotiate supplier agreements and reduce capital expenditure. But a constant expectation to do more with less makes managing volatility harder. Over the long term, these measures can create operating model rigidity and risk hampering performance and growth.
To survive, progressive oil and gas companies must be bold and recognize that digital presents an opportunity to disrupt the industry, not only by driving the next wave of cost efficiency, but also by securing operational agility to better manage volatility and position for growth.
Leading oil and gas companies can successfully execute digital in the following three ways:
Create new business models and enhance channels to market to engage customers and drive revenue: Use new business models to open up new revenue streams and better understand changing customer behaviors to enhance the channel to market.
Improve operations to increase agility and better manage volatility: Use the Internet of Things to drive automation and improve upstream and downstream core operational efficiencies.
Enhance the back office to realize productivity gains: Take advantage of new collaboration technologies and artificial intelligence to improve productivity and safety across the enterprise.
Executing a digital strategy relies on having the right team with the right skills. Advances in wearable devices, more natural human interfaces, and smart machines are extending intelligent technology to interact as a “team member” and augment the workforce of the future.
Oil and gas companies continue to try to find balance in an industry in flux. Disruption in supply, demand and commodity prices—in addition to a more environmentally conscious consumer—have played havoc with established industry norms.
On the flip side, rapid advances in technology have brought increasingly sophisticated platforms, mobility, surveillance, connectivity and storage technologies. Coupled with the ability to process and analyze data rapidly, energy companies can now be more agile than ever, making informed decisions in real-time.
At issue is the industry's conservative approach to technology. Most companies selectively adopt a set of technologies and implement digitalization unsystematically. If they instead took a revolutionary approach, making digital the backbone of their operations, they could ensure their place in the race toward the $1 trillion digitalization is expected to bring to the industry.
To learn more about how your company can get into the digital swim, check out the report Accenture produced for the World Economic Forum on Digital Transformation in the Oil and Gas industries.
Lone digital tactics are no longer enough. Recent cross-industry Accenture Strategy research shows that less than half of companies currently have a digital strategy implemented across the organization.
Oil and gas leaders need to ask themselves five key questions to drive digital transformation in their businesses:
What is the level of ambition for digital?
What is the intent and remit of digital?
How is digital governed across the organization?
What changes are required to deliver digital?
What untapped value resides in the organization’s data?
By achieving digital maturity across channels, operations and the enterprise, oil and gas companies can gain the agility to transform and counteract the impact of volatile times.Learn more about Accenture Strategy
In the up and down oil and gas industry, all signs point to a digital future. But can volatility really lead to increased agility?
Learn how to get started securing future value.