Companies throughout the energy value chain face pressure as low commodity prices persist and market conditions shift unpredictably. To succeed, leaders need to see around corners and achieve consistent greatness in decision making. They must also support decision makers throughout the organization, down to the plants and rig platforms.
A culture of bold decision making that is grounded in sound, actionable insight makes a company agile. Leaders overcome bias to consistently optimize return on assets and portfolios while reducing operational costs and minimizing costly mistakes and violations.
Digital transformation has emerged as the leading differentiator in E&P, refining, gas processing and utilities. As the World Economic Forum stated in a 2016 report on digital transformation, “There is widespread recognition among leaders in most industries that the role of digital technology is rapidly shifting, from being a driver of marginal efficiency to an enabler of fundamental innovation and disruption.”
Companies that leverage scalable, integrated solutions separate themselves from the competition with a fearless approach to risk and change. Deloitte and the MIT Sloan School reported last year, “The ability to digitally reimagine the business is determined in large part by a clear digital strategy supported by leaders who foster a culture able to change and invent the new. While these insights are consistent with prior technology evolutions, what is unique to digital transformation is that risk taking is becoming a cultural norm as more digitally advanced companies seek new levels of competitive advantage.”
The challenges to true digital transformation can be daunting. Many organizations are held back by legacy systems, or they use point solutions that support disparate operations effectively but do note share data. Without interaction and integrated data, executives have a limited vision, and a lack of confidence hinders decision making.
End-to-end digital transformation helps the organization amass reliable data centrally and subject it to timely analysis. The essential technologies vary among sectors, but the following principles remain the same.
Embrace digital transformation as a driver of success. Digital transformation is much more than automating processes and gathering machine data. It means visualizing an organization that achieves operational excellence by optimizing management of portfolios, assets and operations. Essential data and information is integrated for insightful analysis that supports rapid, reliable decision making at every level. Opportunities are recognized and pursued, and excess costs are eliminated.
Integrate data and analysis. Decision makers need clear vision deep into operations to boost confidence. “Many companies are introducing big data analytics tools to address particular workflows or challenges,” David Holmes, Chief Technology Officer for Energy at Dell EMC wrote recently. “While these solutions might address particular high value problems, often they are not being implemented in a joined-up way.” Where important data is siloed or stored in unmanageable formats, data and content management systems must be updated to eliminate barriers.
Make information retrievable. Data and records that cannot be retrieved rapidly are virtually useless and hinder agility. Prioritize the different data and record types across the organization and ensure that nothing is less accessible than it needs to be.
Deliver timely, insightful analysis. Know decision cycles at every level, and support them with the right analysis in the right hands at the right time.
Enable collaboration. Anticipate ideal collaborations, and make sure that necessary technology is delivered to all the right points with suitable availability and bandwidth.
Empower the entire organization. Key executives are the top priority, but employees throughout the organization make decisions that can have critical consequences. “The convergence of data, machines and people—and analytics powered in part by the emergence of the cloud—will enable smarter decision making by people on the edges of the organization,” Accenture wrote in a report on digital transformation in oil and gas. Identify all levels where important decisions occur and apply resources proportionally. Analyze what data and information are needed at each point and ensure timely availability.
Leverage machine data. Real-time condition data and predictive analysis can make maintenance, repairs and replacements far more efficient and minimize outages and downtime.
Maximize availability. Decision support only works when the applications are up and running. Use robust backup and recovery solutions to ensure availability.
Get knowledge and information into databases. Energy companies throughout the value chain are overly dependent on the knowledge of veteran employees. To ensure continuity, make knowledge of assets and procedures available online and readily searchable.
An energy company that supports strategic decision making at the executive level and empowers operational managers with the knowledge they need is equipped to compete and thrive in even the most challenging times.
By John MacKenna, Energy Writer