After oil prices plummeted, companies responded with waves of cutbacks. While essential, this reaction achieved only part of the changes needed in a "lower for longer" price environment. A wide range of advances—involving analytics, cloud and mobility solutions—are offering chief operating officers powerful ways to reduce operating costs and increase production to improve operating margins.
Accenture research and client experience show an array of benefits emerging from digital advances:
Value-based activity planning. By using precise data to examine critical tasks, analytics can deepen understanding of equipment condition in real time. A growing number of companies are using advanced analytics to prioritize inspection and maintenance activities for cost savings and fewer unplanned breakdowns.
Production optimization. Deploying analytics to improve field production has already helped some global leaders realize impressive gains. For example, Woodside is implementing predictive analytics for maintenance and process-control in production operations.
Execution efficiency. Automation and artificial intelligence eliminate repetitive tasks, and mobility solutions help track materials and people. Some sectors have applied tracking technologies to help clients increase wrench-time and we’re now seeing upstream companies start to take advantage of similar technology
Collaboration for high performance. New platforms bring suppliers and operators closer together. We have seen the industry coming together to create basin-wide logistics control towers through which movements of vessels are tracked and optimized real time, with benefits in fuel consumption and safety.
How COOs can work for even greater gains
The areas described above provide a taste of what already is possible. Here are additional ways COOs can help their organizations embrace emerging digital advances to transform operations:
Begin by improving understanding among operational leaders and managers of the benefits of wider digitalization.
Develop roadmaps with phased goals: short-term digital pilot projects, technology improvements for the intermediate term, and a long-term vision for the entire IT stack. In the long run, what is needed is an agile, cloud-based, services-oriented approach that flexes with changing business conditions.
Offer input early on for new capital projects by having digital processes built in, rather than being layered or retrofitted afterward.
Support ongoing collaboration between capital projects and operations to take full advantage of developments such as remote and unmanned production operations.
Digital solutions are already helping COOs control operational expenses for improved profitability in difficult times. Planning further ahead, COOs can offer an operational perspective so new capital projects have digital advances built in to improve production from day one.