Embracing a digital operating model in oil and gas
Energy companies are experiencing significant change and disruption with the arrival of digital technologies such as artificial intelligence and block chain technology. With infinite opportunities brought about by these emerging technologies, the future s
Jonathan Smith Accenture Asia Pacific Oil & Gas Lead
WHILE the opportunities for growth are limitless, organisations’ time, talent, and funding are not. Technology investment therefore needs to be supported by an agile, adaptive, digital and flexible operating model which ensures organisations position themselves effectively to harness the full value.
In defining and transitioning to this digital operating model, Accenture has identified three imperatives for success:
1. building a mindset that can navigate both efficiency and agility at the same time.
In Accenture’s 2016 Upstream Oil and Gas Digital Trends Survey it showed that digital was adding the most value through cost reduction, improving worker productivity and contributing to smarter business decisions; highlighting the mix between efficiency and agility.
While any cultural change takes time, there are things that can be done now to support the transition.
At a practical level, oil and gas companies can start by embracing Devops to support continuous integration, delivery and automated testing of code.
This step is closely followed by the disaggregation of existing architectures— decoupling systems of engagement from systems of record. In separating these underlying technology architectures, organisations can deliver change in their business in a coordinated but non-synchronous way. Finally, organisations should consider how they can apply infrastructure “as-a-service” delivery models to support greater innovation and flexibility.
2. Creating the digital workforce of the future.
Despite the magnitude of the industry, research from Accenture and APPEA indicates that the Australian oil and gas workforce has less experience than other oil and gas producing regions globally.
In fact, Australia has a lower proportion of professional workers with 10 or more years of oil and gas industry experience; indicating a strong need to accelerate experience through training and innovative programs.
With Australian oil and gas companies making substantial investments in digital technologies, it is critical that the workforce is developing the right digital skills in order to realise the complete value of the investment.
Also, according to recent Accenture research, digital is increasing worker productivity, improving job training/ skilling and increasing employee engagement. The point around employee engagement is particularly telling as there is clearly a realisation that the energy worker of the (very near) future will have to be digital savvy.
3. New days, new ways.
Being a digital business means adopting new ways of behaving and operating. Organisations should start with digital investments to strengthen existing, core customer operations to become lean, operationally excellent and sustainable.
Integrating data, applications and processes across the business that have historically been managed in horizontal silos will be essential to taking advantage of the digital revolution.
The next generation of digital or ‘intelligent’ plants will integrate real time information to deliver insights and foresight regarding operational performance, and will help the industry optimise plant operation, availability, costs and safety.
This would result in improved efficiency, reduced non-productive time and shorter decision-making processes.
Furthermore, by building such digital capabilities, organisations will gain the right to participate in new energy ecosystems that will enable them to seize new revenue opportunities and tap into unexpected markets.
Understanding the role of digital in the organisation and starting to move towards a new model now, will help oil and gas companies transform operations and place digital at the heart of the business.
With operators investing over $250 billion since 2009 in the Australian LNG industry, companies who successfully create an organisational culture of digital innovation are better prepared to respond to the changing landscape.
As the next chapter of the oil and gas industry emerges and evolves, adapting a digital operating model will set organisations up to take full advantage of what is to come and unlock new streams of value.