Although our topic for this blog on digital isn’t as riveting as Mad Max 2 movie, it has its own subtleties that rivals Downtown Abbey series. Oftentimes, you hear word ‘digital’, for me it has become like the series “Days of our Lives”. You can miss few months of episodes but you can still pick up anytime and follow.
There is far too much material on digital out there and choices seems to be endless. Being a TED talks fan, after listening to brilliant Sheena Iyengar’s talk (Author of Art of choosing, watch her ted talk here http://www.ted.com/talks/sheena_iyengar_on_the_art_of_choosing ), I have to agree more choices does not always lead to good decisions in fact it can lead to sub optimal choices. Pursuing the wrong technologies wastes scarce resources and can put a company at a serious competitive disadvantage. The right technology portfolio could create a tremendous growth platform, but the wrong ones could be a millstone around a company’s neck.
In this blog, I’ll try to cut to the chase and provide an approach and a point of view on application of digital technologies to Oilfield Services (OFS).
Step 1 Understand sector trends: It is important for companies to be aware of sector trends. They establish areas of growth and pockets of weakness in any market. For example, the industry that emerges from this low-price environment will look quite different from the one that entered it. North American tight oil, while challenged at current prices, will remain a significant part of new production growth. Deepwater developments are being radically reworked for the new price environment.
Step 2 Identify your business priorities: For any company, technology should address business priorities (proverbial hammer and nail analogy). In the current business environment, priority for Oilfield Services companies is to build ‘An Adaptable Enterprise’. This translates into ‘doing more with less’ by improving efficiency and position for growth when the market comes back. The focus now is not to push technical boundaries but to create efficiencies that allow companies to operate sustainably over the long term.
Step 3: Map new technologies that will support sector trends and business priorities: New technologies (‘digital’) fundamentally are trying to deliver enhanced Customer Experience and Operational Excellence supported by advanced analytics. Enhanced customer experience is delivered by bringing together connected customer and seamless commerce. Operational Excellence is delivered by bringing together connected assets, worker of the future and collaborative supply chain.
From steps 1 and 2, immediate priority for OFS companies is to focus on Operational Excellence and benefit in the current and future environments. With that understanding, if we map business priorities and technology trends for a typical Oilfield Service Company, we can end up with a summary table like the one below:
Table 1: Connected Assets
Table 2: Worker of the Future
Table 3: Supply Chain Collaboration
Like in Marvel movies, at some point the story starts coming together and making sense after many initial breath-taking, seemingly disconnected scenes. I think we are at this point now in the digital space and I am hoping that the above table put things into perspective.
I know I am leaving you with questions on midstream and downstream priorities. That probably was intentional following the footsteps of many Hollywood sequels. Meantime I encourage you to think what digital means to your sector and your business priorities. Can you disrupt the market with digital?