Embarking on a digital transformation journey can be an enormous undertaking for an established organisation. With the harsh economic times faced by the Oil & Energy industry in recent years and threats to the sustainability of the oil industry itself, embracing digital technologies is necessary to survive.
There are three fundamental questions that should be discussed when thinking about adopting a digital transformation programme.
- Why should we transform?
- How are we going to achieve our objectives and goals set out by the transformation plan?
- What are we going to deliver for our customers and for our business?
Focusing on the “why” can focus efforts and allow smooth buy-in (of the project) from all stakeholders which is a necessity for any programme. Here are some reasons why:
- Automate processes to increase productivity
- Use data and analytics to increase safety levels for people, assets and the environment
- Use artificial intelligence for enhanced decision making, predictive maintenance and autonomous monitoring
- Create an enhanced experience for customers and sub-contractors
A hierarchal list of company needs based on priority should be drawn up by the relevant teams. From there, it can be observed what type of studies, applications, software or resources are needed. A roadmap is the best way to outline and translate a strategy amongst teams. As a next step, organisations should plan and execute Proof of Concepts (PoC) in short, fast phases to understand if the proposed idea works or not.
Furthermore, it is important to have a nice blend of technology “ingredients” to deliver successful transformations that impact (in a positive way) your business.
Here below, I will elaborate on each of these “ingredients”.
There are increasing needs and calls for digital platforms. Most companies are developing a platform in one form or another. This can pose challenges when the time comes for collaboration between (for example) an engineering contractor, construction contractor and operator. Due to the lack of industry standards around this topic, there will be challenges that will impede the progress of sharing of information across the supply chain due to potentially three different platforms.
Today, there are several platforms types available. For example:
- On-premises (Internal intranet)
- Infrastructure-as-a-Service - IaaS (e.g. Amazon Web Services)
- Platform-as-a-Service - PaaS (e.g. Predix)
- Software-as-a-Service - SaaS (Computation Hub)
To put this into perspective, the following analogy (in terms of pizza - which hopefully everyone understands by now!) is presented.
The power of a platform is to deliver value across all departments in your business and is very beneficial in today’s digital age. Although, there is some work to be done on how to standardise connection between all the aforementioned platforms.
Applications delivered via a web browser can offer tremendous benefits for teams within an organisation. First of all, compared to traditional desktop applications, they are tremendously more visually appealing. Today’s web applications are developed using HTML5-Java-script technologies and can leverage many thousands of web libraries that result in a rich, interactive experience for the user.
Web-based applications are platform independent. They work on Linux, Windows or Mac due to the fact that they are accessed over the Internet in a web browser. There is no lengthy download and installation times which allows you to start working immediately on your project tasks. Furthermore, these applications are accessible via the browser or exist as a native application on your mobile device (e.g. telephone, tablet). It should be noted that there is a download time for native mobile applications.
Deployment of new features can be easily tested and implemented within teams. This is how most web services are deployed nowadays (e.g. Slack, Trello and even LinkedIn). This is done without the user noticing (but still the vendor should send a notification of changes to their inbox).
Nevertheless, desktop or web-based applications form part of an Engineers toolkit and should be sees as an aid to performing their task(s). But, having tools that give a wonderful user experience can do a great deal for morale and productivity which means web applications offer
Open Source Software (OSS)
OSS is not in widespread use within the Oil and Gas industry. This is perhaps due to advances in commercial software like Abaqus for finite element analysis of offshore structures over the past 20-30 years.
There are several myths and mistruths surrounding OSS (full list) and this is perhaps one of the reasons why OSS is not more mainstream within the industry.
OSS is a more flexible and better way to enhance your web applications with many easy to use libraries available for data visualisations (e.g. D3.js), Machine Learning (e.g. TensorFlow) and 3D modeling (e.g. Three.js).
The empowering factor of OSS is that it allows prosperous collaboration with a strong community of developers that are passionate about improving and delivering specific software. More importantly, there are several licence agreements that are easy to understand which means that if used, can allow for development to start quite quickly, without heavy involvement from your legal team.
As mentioned in a previous article there are two popular Cloud Computing models - Public Cloud and Private Cloud. Further to that, there is the possibility of a Hybrid Cloud offering. Sensitive data could be stored privately and run in a private cloud and when data is not sensitive, public cloud could be used.
Adopting Cloud Computing allows on-demand access to extra computing capacity without the need to invest in internal IT infrastructure. Rent-able cores are available from most Cloud vendors. CAPEX and OPEX are reduced due to the fact that servers, data centres are not required (you rent them), resulting in substantially lower Total Cost of Ownership for your IT system.
We constantly read that data is the new oil and that significant gains can be achieved if leveraged properly. Although the Oil & Energy industry is starting to adopt strategies to extract value from their data to view insights to their operations, there is still more work to be done in the areas of data security and ownership.
Combining data with intelligent algorithms can drive business insights to reduce costs and stay agile in the event of unforseen circumstances.
Artificial Intelligence (AI) has been around for many decades but has failed to become more embedded/adopted in work practices. This is because computing power was not available and historically, was expensive. Nowadays, compute costs have dramatically fallen and has allowed most businesses to benefit from this. Additionally, startups are taking advantage and developing applications and technology very quickly.
Advances in the capability and accuracy of algorithms has progressed brilliantly and has built on top of many years of research and development. It has even led to people learning new techniques from how AI algorithms “think” e.g. Open AI - Dota.
Blockchain is a revolutionary technology that allows “value exchange without the need for trust or for a central authority (Source: Michele D’Aliessi)”.
The applications are numerous in the Oil and Energy industry. For example:
- Engineering, Procurement, Construction and Installation contracts
- Acquisition of assets (e.g. offshore oil field)
- Procurement of equipment, materials and tools
- Commodity trading
- Streamlining of back-office operations and finance
Increasingly, organisations in the industry are looking to startups to help develop, accelerate and build upon new technologies. There are two ways this is occurring right now:
- Internal startups led by Intrapreneurs
- External startups led by Entrepreneurs
Startups can bring a new way of thinking and develop technology (products and services) much faster due to their small team size which allows greater agility to adapt to sudden changes in project direction/goals. “Using the Lean Startup approach, companies can create order not chaos by providing tools to test a vision continuously”.
The Lean Startup methodology adopted by Startups can shorten the product development cyclce and hypothesis-driven tests, iterative product releases, and validated learning.
Even though the “digital age” is upon the Oil & Energy industry and can be difficult to navigate with it, we must not forget that the industry is quite technically skilled in developing and adopting complex technologies. Strong in-house capability and expertise and being leaders in technological development can contribute to a successful digital transformation.
Strategic planning is necessary when choosing a platform type to integrate into your operations. Two characteristics should be taken into account - Agility and Software Total Cost of Ownership (TCO). Notwithstanding, a risk assessment of data security should be factored into decisions also.
It should be clarified that Computation Hub is available to support in all areas of your digital transformation journey.
Of course, implementing a digital transformation within your teams is not straightforward. How will people react to these changes and the eventual outcomes of the programme? Careful management in this area is necessary, but it’s also an exciting period to welcome in new technology to aid peoples mission at work. Furthermore, how will this impact the way the organisation deals with its customers, contractors, suppliers etc?