The oil and gas industry, which has long lagged in its use of innovative technologies, is seeing a surge in investments in digital technology. But that money isn’t always well-spent. In this blog, I’ll detail how companies are spending their tech money — and how they can get more out of it.
Oil and Gas Industry Increases Digital Investments
A report by the consulting firm EY, “New technology can lead the way, but do you know where you're headed?” details the current and projected state of digital spending in the industry. The report is based on interviews with 100 global oil and gas executives around the world. The good news: 89 percent of organizations say their investments in digital technology will increase in the next two years.
The investments are being made because oil prices have been declining since 2014, and oil and gas companies are looking to decrease costs and increase efficiency. Fifty-five percent of survey respondents say their tech investments will focus on operational improvement, and 42 percent say their primary motivation is to improve efficiency. Jeff Williams, EY Global Oil & Gas Advisory Leader, explains, “Companies are subjecting their investments to far more intensive scrutiny, and they are looking for solutions to slim down the cost-per-barrel, aid recovery rates and reduce non-productive time. There is now broad recognition across the industry, however, that short-term cost-cutting is not the answer, and that digitization has the potential to significantly improve efficiency.”
The survey found that robotic process automation (RPA) and advanced analytics will have the greatest impact on the industry in the next five years. Both technologies are already in widespread use: 75 percent of respondents say they are already using RPA, and 87 percent are using advanced analytics. By way of contrast, the Industrial Internet of Things (IIoT) is currently used by only 19 percent of respondents. However, Ho`Hoe75 percent say they will use IIoT in the next 18 months.
Challenges Remain for Digital Tools in Oil and Gas
Companies report they have plenty of digital challenges, notably aligning technologies with their core business and with the rest of the organization. The report says: “Less than a third of respondents (31%) believe their digital investment vision is ‘highly aligned’ with the views of other senior management colleagues. And 41% say reaching agreement on a digital road map from executive teams and the board of directors is a key strategic problem.”
Beyond that, the report says, companies spend almost half of their digital investments (48 percent) on outsourcing, and “36% of organizations surveyed say their greatest operational barrier is around integrating new tools with existing solutions and systems. Indeed, respondents devote an average of just 17% of their digital technology investment to building in-house capabilities, which they attribute to personnel issues and prohibitive timelines and costs.”
EY’s Williams concludes: "There still appears to be a lack of confidence among senior oil and gas executives about how to define and execute their digital vision, and the scope of many businesses' strategies is still too narrow. While outsourcing can be beneficial at the outset, ultimately, we believe the winners will build integrated, in-house capabilities that embrace the transformative potential of new technologies.”
The Best Digital Platform for Building Transformation Oil and Gas Technologies
As the report notes, the oil and gas industry needs not just to invest in digital technologies, but use them in-house instead of outsourcing them. To do that, however, companies must have the best digital platform. Alpha TransForm is ideally suited for the task. It has the unique ability to rapidly create mobile-optimized forms and field apps that can easily access and integrate with existing databases and web services and can exploit built-in role-based security. It builds offline apps, vital for the oil and gas industry, and has frequently been used to write mobile apps for field workers.
View and download Alpha Software's pumpjack inspection app and watch a related webinar on how to customize it for your organization.
Additional Reading:
Find out how mobile apps can help rejuvenate the oil and gas industry.
Read about why oil and gas CIOs need to embrace digital transformation.
Read a case study on how one developer for a major oil drilling company built an offline-capable maintenance app for offshore oil platforms.
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