Drilling for value with MDM

Master data management is key to tapping huge data reserves in oil and gas

Companies in the oil and gas sector face several challenges that can be addressed by leveraging data to generate meaningful, actionable insights in a timely manner. But for this to occur, executives must have access to a single version of the truth about their company’s master data – the core data that defines the company’s people, assets, operations, and partners. An effective master data management (MDM) strategy ensures this data is consistent, uniform, and accurate – across the enterprise.

Properly defined and executed, MDM can help a company more quickly redeploy equipment from well to well, and improve management of the supply chain for spare parts. Given that oil and gas exploration and production is asset-intensive, this can help executives minimize capital asset buildup and maximize capital asset utilization to realize significant cost savings.

An effective MDM strategy can also help executives ensure their enterprise satisfies investor demands and regulatory requirements. This has always been important, but over the past few years it has become clear the sector has a prominent role to play in reducing global carbon emissions. As a result, every oil and gas company’s environmental, social, and governance (ESG) performance is being more closely scrutinized – so quick and accurate reporting is more essential than ever.

Sector-specific issues increase the challenge

Companies in all sectors face MDM challenges, but they are particularly acute in the oil and gas industry. There are several reasons for this.

• Oil and gas companies have fluctuating revenue profiles tied to factors such as the price of a barrel of oil. Since businesses tend to invest in data only when revenue is strong, oil and gas companies have done so in a sporadic manner – resulting in multiple systems for managing assets and the data they generate. Many of these systems are antiquated or don’t interoperate with others.
• Oil and gas operations generate huge volumes of data, and the rate at which they do so is accelerating. Because investments in data are sporadic, most companies are forever chasing their data management requirements instead of getting in front of them.
• From exploration, through production, to decommissioning, the business of oil and gas requires a large number of third parties to work together. These include exploration and engineering companies, equipment suppliers, those who actually operate the wells, landowners, transport companies, and others. Each party has its own data-management solutions – and these don’t necessarily interoperate. This causes a range of challenges, from effectively coordinating operations to settling royalty payments.

To manage their huge number of data sources – spread across multiple departments, multiple geographic territories, and multiple third parties – oil and gas companies have traditionally relied upon an army of employees who manually collect data and attempt to stitch it together into meaningful reports. This is time consuming, labor intensive, and costly. This unstructured data is not agile, so it doesn’t deliver the information executives need in a timely manner – and it’s prone to errors in data entry or transcription, so data quality becomes a key concern.

Recommendations for success

Industry leaders recognize that an effective MDM strategy can address these challenges. At the same time, they recognize this is an opportunity to develop an enterprise-level perspective on data – moving beyond data at the level of the well, the field, or even the region. Executives also recognize that asset management and other activities can be improved by applying AI and machine learning to data, to model multiple scenarios and provide valuable insights to aid decision-making. So the will exists. What’s needed is a way forward.

Based on Capgemini’s extensive experience in helping our clients in this sector, here are some key recommendations for oil and gas enterprises looking to deploy an enterprise-wide MDM strategy.

• As noted, the oil and gas industry has many sector-specific issues. Any MDM strategy – including methodologies and frameworks – must be specifically tailored to address these. It’s important to choose a strategic partner who understands this and has experience in the sector.
• A strategy driven by business value outcomes instead of technology is more likely to succeed. It’s important to embrace a use case-driven model to tackle MDM challenges.
• There are common challenges across the oil and gas value chain that can be addressed through better management of master data. Identifying these and addressing them first can provide some quick wins – especially around master data related to key assets such as wells, parts, and employees, in additional to their specific hierarchies.
• As a company implements its MDM strategies, it’s equally important to focus on the people who will be affected by this transformation. Strategies should ensure the solutions are sustainable – for example, that they have an intuitive form of governance for the organization – so that everyone embraces the change.

Following these principles, Capgemini has helped a broad range of clients in the oil and gas industry plan and successfully execute their MDM strategies. As part of this, we’ve developed a set of potential high value use cases and a portfolio of key accelerators that give Capgemini clients a head start on tapping the value of their data. We would be pleased to discuss how we can help your company.