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March 29, 2018
Exploring the cloud in the oil & gas industry
By: Richard Holsman

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:

  • Better data and insight gathering
  • Faster and better decision mak­ing
  • Reductions in the time from exploration to production

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:

  • A cost reduction component driven by a significant reduction in IT infrastructure costs
  • A business value component based on cloud-enabled capabilities like advanced an­alytics to unlock trapped value

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:

  • Step 1–Strategy and analysis: Identifying, delivering, and measuring business impact using architectural approaches that align technical delivery to business imperatives
  • Step 2–Planning and design: Defining a company’s target state architecture and creating the required blueprints, patterns, sequences, and roadmaps for cloud transformation
  • Step 3–Transition and implementation: Managing projects to deliver expected business outcomes on time and within budget while keeping risks at acceptable levels
  • Step 4–Execution, continuous improvement, and ongoing migrations: Managing the cloud en­vironment, providing process, guidance, and tools for optimum service management, as well as continuing to modernize the IT estate and migrate more applications, platforms, and infrastructure to the cloud

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.

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