The oil and gas industry has been struggling for years to transform itself with digital technologies, although to date the results have been mixed. The industry is well behind most other segments of the economy when it comes digitization, even though the benefits can be enormous. A study by Accenture and the World Economic Forum, “Digital Transformation Initiative: Oil and Gas Industry,” for example, says that digitalization of the oil and gas industry can yield approximately $1.6 trillion in benefits in the decade between 2016 and 2025.
Despite that, the industry can’t quite seem to get digital transformation right. Wassim Ghadban, global director of innovation and intelligence at SNC-Lavalin, writes in an article in OilandGas.com that “for the most part of this decade, [the oil and gas industry] seems to have lagged behind other industries in leveraging the transformational impact of digitalisation.”
The reason, he notes, is that oil and gas companies “are often wary of challenges associated with integrating new technologies into existing assets and business models… Complexity of technology, human capital development, corporate cultural changes, competing priorities, investment cost, or security are all issues that could become a barrier. The underlying challenge is to walk the digitalization path at a pace that will encourage innovation, while not compromising on the values that drive the industry – safety, environmental standards, efficient production and profitability.”
That’s easier said than done, of course. But Ghadban has a recommendation about how to do it: Take a holistic approach to digitalization. That means that companies need to realize there’s not a one-size-fits-all approach to digital transformation. They need to carefully consider all the available technologies, ranging from AI and analytics to mobile, data visualization, automation, blockchain and others, and match them with the unique needs of their businesses. There is no single path to success that all companies can follow.
He concludes: “It is a multi-level process involving many stakeholders, managing people, processes and tools that provide control over the structure, processing, delivery and usage of information is key...Any organisation that can effectively gather and leverage its own data and manage information to derive value will be better placed to compete. How that can be done most effectively within any particular organisation will define that organisation’s competitive advantage.”
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