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August 15, 2016
Tomorrow’s best decision makers could be machines: How upstream CIOs can prepare for digital transformation.
By: Andrew Marks

The recent downturn has fundamentally changed oil and gas organizations. Tens of thousands of people—possessing hundreds of thousands of years of experience—have left companies and sought work in other industries.

It makes sense to envision what the workforce could look like in the coming years. Digital is breaking through established work boundaries, and tomorrow’s best decision-makers may well be machines.

Making exploration and production “boundaryless"

Due to the boom-and-bust nature of the industry and successive waves of downsizing, upstream oil and gas companies are in a difficult position when it comes to talent. An innovative approach is to think how digital technologies can be leveraged to reduce fixed costs (e.g., plant assets, full-time equivalents) while still achieving desired business outcomes.

Consider how digital technologies have reshaped other industries. People can hail taxis using smartphones, and companies do not bear the fixed costs of vehicle ownership or pay for a legion of full-time employee drivers.

Rather than employing more full-time geoscientists, engineers and support staff, and trying to find ways to keep all of them busy, companies can look to fee-based arrangements linked to specific projects, analysis and reports. Responsibilities traditionally assigned to full-time employees could be broken into discrete chunks and assigned, often to experts operating remotely and independently, linked by digital technologies that enable collaboration among participants working on multiple continents.

Rather than hiring more “doers,” you might need to attract employees who are good at procuring talent on a project-by-project basis and managing teams across traditional departmental boundaries.

Tomorrow’s best decision-makers could be machines

Projects that might have taken an employee months to analyze and report on can now be done by intelligent machines in a fraction of the time. Machines can crunch massive amounts of data on well sites and geological formations to make recommendations, and do the work objectively without fear of providing an answer that may fly in the face of conventional wisdom.

Cognitive assistants can deliver visual analysis of sites and provide recommendations, which is especially helpful for less experienced talent, whether full-time or being paid through fee arrangements. By using machine learning to reveal insights from large amounts of data, digital platforms are a smart way to deal with the “crew change”—the impending wave of retirements in oil and gas.

What can CIOs do to orchestrate this transformation?

  1. Start by finding a persuasive sponsor to push the envelope with creative proof-of-concept projects. Don’t be afraid to fail.

  2. Examine current pools of employees, contractors and service suppliers, and envision how digital advances could enable higher-quality outcomes with more flexible networks.

  3. Envision the IT architecture needed to enable an agile, well-connected business.

  4. Work with human resources to consider the breadth and depth of impact.

  5. Measure performance on new projects, try different approaches and build on your successes.

The voices of CIOs are increasingly relevant as executive suites and boardroom lay the foundation for digital, which is transforming companies and entire industries.

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