After wrapping CERAWeek 2017, our Accenture Strategy Energy team continues to comment on the appetite for digital technology at this year’s event. From discussions on the rise of the Chief Digital Officer to the realities of the digital oil field, it was clear the industry has turned a corner.
At least in mindset.
While enthusiasm for digital runs high, industry leaders readily admit they still have some road to travel to integrate digital technologies into the industry. In order to reap full benefits—from cost reduction to innovation—oil and gas companies will need to develop a clear digital strategy.
It is clear this is not happening yet. In an industry rife with data, many executive teams still struggle to determine how to best use that data. For example, each drilling rig generates over 150 channels per second—or 1-2 terabytes per day. However, less than 0.1 TB of that data is pulled into enterprise systems to drive insights.
This is just one example of how the oil and gas industry lags behind almost every other in digital maturity. If the enthusiasm at CERAWeek was any indication, however, not for long.
Accenture’s recent World Economic Forum report on digital in the oil and gas industries pointed to progress. Companies are already using digital to gain an enterprise-wide, near real-time view of their operations and underlying financials (in nearly every asset class - from unconventional wells, offshore platforms, massive conventional fields, refineries, pipelines and mines).
As your company begins to address its digital plans in earnest, we offer a few key areas that serve as the foundation to a successful foray into digital.
Vision. Think holistic transformation, not piecemeal initiatives. When digital is considered in siloes, it will still have impact—but that impact will be lessened. Addressing digital across your business—how it impacts everything from operating model to recruiting—will put your company that much closer to its future state. For digital, the whole is exponentially greater than the sum of the parts. For more on this topic, check out: Energy Company of the Future: Rethinking Everything.
Roadmap. Be systematic in the pursuit of your vision. Larger NOCs and IOCs struggle to progress their digital journey due to the lack of a coherent roadmap that ties disparate initiatives together. While scale can complicate a roadmap, it makes the creation of a strategic one even more necessary. Conversely, a smaller independent in North America is systematically progressing an even more ambitious transformation, guided by a well-crafted plan that is backed by an adequate understanding of the enablers and requirements at each stage.
Capabilities. Invest in hardware, software and people. These enabling pillars of digital go hand-in-hand. Many companies focus on the first two but forget the third. Employees will need retooling and reskilling to make digital transformation a reality. And new employees will need to come with a digital-savvy skillset. Read more about this topic here: The Talent Well has Run Dry.
Culture. Innovation fuels growth. But, digital enables innovation. Creating a culture that embraces digital tends to up the pace of innovation. Examples abound, from banking to government, retail to consumer goods. Oil and gas companies struggle with legacy cultures, those that supported a business model digital turns completely on its head.
While these areas to consider are somewhat broad, they are the building blocks upon which a digital mindset is built. Given that digitalization could unlock over $1 trillion of value for the industry, its customers and wider society, there is no time to waste.