Shifting the oil and gas industry to a digital first mindset

Profile of human brain with digital background signifying digital transformation
(Image credit: Pixabay)

For businesses across the globe digital transformation has epitomized the last decade and has exploded in the last 12 months. Accelerated by the pandemic, we have seen organizations in every sector from retail to manufacturing to public sector, quickly double down on modern cloud and SaaS technologies, and remote or hybrid working in order to maintain business continuity. For many industries including the oil and gas sector, digital transformation is just the first step and now is the time to fully embrace a digital first mindset to deliver digital experience, productivity, efficiency and thrive in a world where digital is a prerequisite. Here’s why.

About the author

John Atkinson is Director of Solutions Engineering, UK & Ireland, at Riverbed Technology.

An industry that is ripe to digitize

Traditionally, the oil and gas industry has been slow to digitize, with Deloitte’s Digital Maturity Index, revealing the industry to score just 1.3. This puts the sector towards the lower end of the index and lagging behind other industry verticals such as retail and financial services. This is largely due to companies being project-focused and safety conscious. As a result, executives have struggled to integrate agile management techniques and new digital services within their company’s culture.

Furthermore, the oil and gas industry is often hampered by doing business in remote locations and isolated rig sites, meaning that connectivity, and by extension digital innovation has been very challenging. Therefore, energy companies have been heavily reliant on VSAT (satellite) links that have very high delays and are prone to outage. These limitations can lead to a loss of productivity, deteriorating user experience and potential reputational and financial damage.

Within this context, it is no longer a question of if, but when oil and gas companies will further digitize and embrace a digital mindset that will ensure they can troubleshoot these issues and thrive in months and years to come.

Digitize to thrive

Energy Research firm, Wood Mackenzie, estimated digitalization could save the energy industry over $70 billion a year in operating costs if existing technology were leveraged effectively. And oil and gas firms are already making progress in this area, with many adopting Manufacturing Execution Systems (MES) to link individual pieces of equipment to the company's Enterprise Resource Planning (ERP) system. The cloud is also being harnessed to allow organizations to manage large volumes of data generated in operations and improve data quality, data availability and single-source transparency across complex value chains. Meanwhile, energy analytics is supporting optimization of energy use and costs across company operations.

But, with digitalization and the adoption of new systems and applications comes complexity. Leaders need to understand what is deployed across their sites. Then put tools in place to ensure that digital services are providing the experience that will allow their teams to work efficiently and productively.

Increasing complexity, optimizing performance

The adoption of digital applications and operation technologies presents an opportunity for senior management teams interested in generating change and to embrace capabilities from remote and flexible working to cloud, AI and machine learning. However, it also brings complexity. For example, the shift to cloud and hybrid work environments can result in visibility challenges that need to be addressed for performance to be retained. In order to fully effect their digital transformation, management teams at oil and gas companies need to grasp the full extent of what digitizing entails. For example, using unified Network Performance Management (uNPM), End-User Experience Management (EUEM) and Application Acceleration complements the shift to a hybrid work model.

These solutions collect and analyze data coming in from every application, across every device in use, regardless of location. Equipped with the resulting insights, IT teams can identify any problems that are occurring, both on a rig and in locations across the network, while also implementing action to rectify the issue. As a result, Riverbed has seen our customers reduce downtime and increase productivity for the benefit of both users and the business as a whole.

Bringing the workforce along on the journey

Whilst it is important to ensure that technology and connectivity works efficiently, especially within the oil and gas sector, digital transformation and a digital first approach requires buy in across the business. From the C-Suite to the IT teams, to the workers on the rigs or in the field, a digital mindset must form the basis of the business culture and be intrinsic to its success. Simply, if the digital mindset is not shared, roll out of new technology will be hampered by confusion, fragmentation and applications not utilized, resulting in a waste of money, time, and resources.

To combat this, leaders need to clearly communicate the importance of the digital mindset, setting out attitudes, behaviors and articulating the benefits of digitization. This means creating forums for feedback and upskilling the workforce to truly understand and embrace the digital ethos. Enabling them to evolve with the business and create an environment that is collaborative and will deliver on the innovation that is needed to drive future success.

Embracing a digital mindset

Despite their current position on the Deloitte’s Digital Maturity Index, the oil and gas industry is not standing still, and it is beginning to shift to a digital first mindset. Digital, however, doesn’t just mean technology and the adoption of new applications or performances to maintain connectivity and experience. It’s also about creating a culture that will embrace innovation, as well as having the opportunity to upskill and evolve. It’s a delicate balance, but going forward, it is essential for the oil and gas sector as they continue to innovative, evolve and be productive, in a world with digital at its core.

John Atkinson is Director of Solutions Engineering, UK & Ireland, at Riverbed Technology.