As part of our ongoing blog series, we have discussed the need for business agility in the upstream oil and gas industry, as well as how to overcome barriers to change by Rewiring the Organization and Enabling the Workforce (see honeycomb chart below). We’ve purposefully left the third aspect to overcoming agility challenges, Remodel Technology, for last because technology organizations are likely already further along the Agile maturity curve than other parts of the business.
As a reminder from our last blog, there are several technological challenges that must be addressed to both enable the workforce and rewire the organization. They include:
- Cumbersome decision-making processes: To rewire the organization for faster decision making, one needs access to trusted high-quality data and analytics solutions that are often not readily available.
- Business and technology misalignment: The concept of working in Agile teams to create products (with guidance from business users) has been in practice within technology organizations for some time. But the business often limits the availability of subject-matter-experts which reduces team effectiveness and agility.
- A lack of fit-for-purpose tooling: Everyone in the organization needs analytical skills along with the right tools for their application. A one-size-fits-all approach does not meet the needs of any persona.
- Non-integrated data: Information must flow freely and be easily integrated. For data to be connected across functions, companies need to adopt standardization in the form of a common data model like the OSDU™ Data Platform. That standardization doesn’t exist in most organizations today, and we see the consequences on a consistent basis.
The critical role of IT
Before jumping into how technology can enable business agility, we want to add a caveat that solving agility challenges relies heavily on technological infrastructure. As we mentioned in an earlier blog about analytics agility at scale, “an organization’s Journey to Cloud is a key enabler of a transformation and should be the starting point.” We mention this now to emphasize the importance of cloud infrastructure, which we consider a must-have.
So, how can upstream organizations remodel technology to address the four identified challenges? We contend it’s all about innovative practices. Specifically, we believe there are three IT enablers of innovation that upstream operators should develop or strengthen.
- Clock speed. The need for more efficient operations and better decision-making abilities has led to an appetite/demand for digital solutions, which must be delivered to the business in an agile way. Innovation at speed requires data that is ubiquitous and accessible, stronger analytics capabilities and highly effective visualization. Things change rapidly and the inability of an IT organization to react and respond to change is tantamount to failure.
General Mills provides a notable example of how a company can architect for speed by looking outside its industry. While attempting to cut the time it takes to make a product changeover from its supply chain, the company decided to focus on reducing turnaround time for its Betty Crocker production line. For inspiration, General Mills studied NASCAR pit crew practices and quickly discovered that collaboration was a key component of speed. Collaboration is important because crews can only move as fast as their weakest links, making interdependency of the team essential. General Mills adopted a similar team-centric approach. Rewarding its teams for overall performance—as opposed to individual departments for achieving their goals—helped General Mills realize a turnaround time reduction of more than 90%. In this scenario, each role played an integral part in success. Collaboration was key for speeding up innovative practices.1
- Adaptability of the IT organization. Technology development (inclusive of traditional IT and digital) is already moving fast. This ever-changing environment creates a challenge for companies looking to deliver valuable products and services. It calls for technology organizations to adapt quickly and continually. One way to meet this challenge is to create end-to-end, cross-functional teams. Teams that can—with the shortest sustainable lead time—design, build, test, deploy and release value to both internal and external customers. Other ways in which an upstream technology organization must transform its role are depicted in the chart below.
A leader within one of our client organizations on the Journey to Cloud hinted at the importance of technology adaptability by saying “we can’t waterfall our way into the cloud.” That statement is spot on. It means that traditional program management with stage gates and lengthy project schedules (a waterfall approach) won’t necessarily align the solution to the needs of the business, which in this client’s case centered around agility at scale. A new approach was needed that incorporated the voice of the customer and positioned the product owner as technology’s go-to for guidance and clarifications.
- Ecosystem collaboration. Ecosystem partnerships enable innovation—and, by extension, agility—by providing a platform through which different parties can collaborate for results. Too often we see clients embrace a new technology without the foresight or wherewithal to bring an actionable solution to bear. Unleashing new technological innovations requires stitching together the right combination of capabilities (e.g., tech acumen, implementation know-how, systems integration expertise, etc.) to get to the desired outcome.
Duke Energy is an example of a company that has taken advantage of ecosystem collaboration to reduce carbon emissions. The electric power and natural gas holding company recently partnered with Accenture, Microsoft and a geospatial analytics company to develop a platform that not only more accurately measures methane emissions for reporting and accountability purposes, but also enables the company to act in a timelier manner to reduce those emissions. By employing a cross-functional team of business stakeholders, technology professionals, hyper scaling experts (Microsoft) and integration experts (Accenture), Duke Energy quickly realized substantial benefits. By engaging ecosystem partners that had the right tools and experience to address the data and analytics complexity, Duke Energy was able to expedite innovation.2
When “Digital Transformation” broke onto the scene in the 2010s, we typically saw oil and gas companies establish "digital” as a separate entity from the IT function. Today, the trend is shifting toward a convergence of IT, digital and business organizations within the enterprise. Roles and responsibilities are, in many cases, still being defined.
By helping businesses quickly scale innovations and solve complex data, analytics and tool challenges (remember the honeycomb?) technology teams play an instrumental role in the future-ready IT function. But it is unlikely they can go it alone; pulling in ecosystem partners and capitalizing on their experience outside the oil and gas industry will be key.
Since the inception of this blog series, an already volatile market has further destabilized with geopolitical trials, regulatory shifts and supply chain fluctuations. If there was ever a time for agility and the ability to respond to environmental factors, that time is now.
In our final forthcoming blog, we’ll summarize the components of agility covered throughout this series and look toward the industry complexities on the horizon.
Disclaimer: The views and opinions expressed in this document are meant to stimulate thought and discussion. As each business has unique requirements and objectives, these ideas should not be viewed as professional advice with respect to the business. This document may contain descriptive references to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.