After a cautious start, more and more oil & gas companies are moving toward cloud technologies. This move is in part because they know they have to embrace digital, and that cloud innovation is a prerequisite. Accenture’s 2017 digital trends survey in the upstream industry revealed that nearly 40 percent of respondents are worried about the risk of being left behind if they don’t continue to invest in digital.
The expected benefits of digital today and over the next few years include:
Cloud transition is a powerful enabler of those benefits and more–helping to increase the lifespan, uptime, and reliability of plant and infrastructure, which will ultimately increase returns.
New sources of value
According to our digital trends survey, more than 70 percent of companies plan to invest more—some significantly more—in new digital areas such as high-performance computing, wearables, artificial intelligence (AI), robotics, blockchain, and virtual reality over the next three to five years.
Executives are now seeing the transition to cloud not only as a catalyst for stronger computing power and higher performance, but also as the path to faster application deployment, lower cost of service, and fuel for their digital transformation. They’re finding new sources of value driven by cloud-enabled capabilities such as advanced analytics, artificial intelligence (AI), machine learning, Internet of Things (IoT) and automation.
Making the case
A successful journey to cloud typically starts with a business case that is based on both:
To help drive insight into the savings and benefits of cloud adoption, Accenture leverages a vigorous financial model that considers key elements such as budget, profit and loss statement (P&L), cash views, and costs associated with winding down legacy apps. For example, we suggest that oil and gas companies conduct feasibility studies to determine which subsurface apps should be moved to the cloud.
Assessments like these allow us to consider the critical technology requirements of each function such as compute, size, infrastructure, and support, then to prioritize what should addressed first. We ask which parts of the business make the most sense to transition to cloud, employing heat maps to show companies what their particular blueprint may look like.
It’s also important for executives to consider their company’s people and culture. The very nature of digital requires a culture built upon innovation, ingenuity, and risk-taking. A cultural shift between the front and back offices is essential in order to reap the full benefits digital and cloud implementation have to offer.
It’s already happening
Many oil and gas companies are already enjoying the benefits of cloud adoption. For example, Hess Corp. expects to optimize costs by roughly 40 percent by transferring workloads to a Platform-as-a-Service (PaaS) solution. Hess is also set to save between 10 percent and 20 percent in labor costs through automation on a cloud management platform.
GRTgaz, one of Europe’s largest natural gas operators, has raised its environment availability from 54 percent to 90 percent—a 36-point increase. The cloud has also helped the company significantly reduce provision testing environments from up to 12 weeks to roughly 10 days.
The steps to success
Companies seeking to make the pivot to cloud can adopt a straightforward, four-step methodology:
The opportunities that come with cloud adoption are profound and will be an important enabler for the oil and gas industry at it transforms itself for the future.
Accenture stands at the forefront of developing oil & gas cloud solutions to guide our clients at the pace of innovation on their journey to cloud.