Guest Editorial: Digital Transformation of the Oil and Gas Industry in an Altered Market
The market may be different from what we have previously experienced, but the path to a successful digital transformation is durable and the core principles of success have not changed.
The blending of digital and physical worlds has been happening all around us at a rapid pace for many years. In the early days of digital transformation efforts, it would show up incrementally and sporadically, with varying levels of success. I remember my first email address, my first mobile phone, my first iPod, and my MySpace account page. Those all seem so long ago now. As time moved on, digital and physical connections seemed more real, and progress became clearer with more tangible benefits. And it was all happening more and more quickly. Fast-forward to a current, pandemic-clouded existence. Can anyone imagine not being connected to the internet or digital ecosystem around us less than 24/7 these days?
Over the past year, we could barely keep up with how important our interactions between the digital and physical landscapes had become. As we have been forced to rethink in every way how we interact with people, places, and things, our connection to digital tools in our altered physical world has become a lifeline for individuals to connect with each other. These tools have also been critical for companies to connect to their customers and the greater market. We no longer speak or think about what it will be like to go back to “normal.” Our use of different digital tools to connect with people and data is now normal and will not be going away.
Historically, the oil and gas industry has been grounded in fundamentals of science, technology, and intelligent people working at the outer edge of what was thought possible to produce hydrocarbons. Even with this forward thinking and adventurous spirit permeating the entire industry, we have been very slow to pick up digitally transforming how we work. It has become apparent over the past few years the requirement to move in this direction, or risk obsolescence. Even though this digital space is not new in our personal lives, we still act as though it is new to us in our working lives. To think of that in a real-time scale, I purchased my first mobile phone 24 years ago, yet I sometimes still need to wait for a daily drilling report through email to understand what is happening on a location half a world away.
It is taking our phenomenal and advanced industry way too long to catch up, but it appears that most of our membership are now on board. From this point, the digital transformation of upstream oil and gas production will fundamentally change how our business is conducted and measured with a clear and targeted focus on optimizing each part of the customer journey. We will smartly and efficiently use data and technology to help create frequent, low-friction, and positive experiences throughout the connected customer relationship.
This industrywide digital transformation will be a long path that is difficult and takes time. The market may be altered, but the path to a successful digital transformation is fluid and the core principles of success have not changed.
It starts with digitizing. This is the foundation the rest of the digital transformation is built upon.
Our entire industry is swimming in a sea of data. The goal of the digitizing phase is to capture as much appropriate data as possible from their source and manage the cleanliness, storage, organization, privacy, security, and user access. These data need to be easy to navigate and available in as close to real time as possible. Much of the digitizing phase sits in the information technology (IT) realm and requires a constant effort to get right. It is very difficult for a company to be perfect at this step and IT teams are largely doing a fantastic job behind the scenes building out that digital foundation for our use moving forward.
Collecting and visualizing data is only valuable if it can be properly analyzed. Integrating all available data analysis must be at the heart of decision making that leads to action. There are many very bright individuals and teams with many workflows that are making consequential decisions every day throughout our industry. It is the goal of digital transformation to help those decision makers make better forward-looking decisions in a timelier way that lead to the right actions where they matter most.
It is an important point that digitizing and digitalizing are two different things. These two words can be tongue twisters, for sure. As digitizing is capturing and managing data for use in decision making, digitalization is all about understanding every workflow, process, and role in a company and how it can be optimized in a digital space. This is a big leap. All of us are pushing hard to more deeply integrate software, mechanization, and automation tools with the very smart people in the industry to drive performance improvements and value creation for our customers. This work is grounded much more in reality than waiting for robots and artificial intelligence to take over everything we are trying to do.
We are working to transform the business and its culture by empowering and enabling people to make better decisions and drive value for ourselves and our customers with digital tools. Operating seamlessly between the digital and physical worlds needs to become the way we work. It is a monumental effort and it really requires a deep belief and drive throughout any organization that is completely focused on bringing value to its customers.
The first part of a customers’ journey is always the recognition of a need. Why does a customer engage in the interaction? Does the customer even know it has a problem that needs fixing? Does the customer know of a solution or product that can fix its problem? How are we helping the customer with the awareness of its need?
After a customer recognizes a need, it moves to the next steps on the journey. It will look for and decide from the options available, and order and pay for the good or service. This part takes time and effort and can lead to potential customers dropping out if we don’t stay close. Are we making it easy for our customers to identify options and choose the best one? Are we making it easy for them to order and pay us?
After a customer’s request, we are expected to produce what we said we would. Did we provide the high-quality products or services as requested, on time, and at the right location? Does the product or service we delivered fit the customer need properly? Does the customer have access to complementors? Are we flexible and supportive to the customer after receipt?
This cycle of customer recognition, request, and response is repeated countless times, and we must be part of this workflow for any company to be successful.
As with any process or workflow, a feedback loop is essential for continuous improvement. Our industry has been successful for a very long time performing hard work in difficult conditions around the world for our customers. This transformation is the next step in us learning how to grow and learn with our customers on how to best provide our services and added-value creation through digital means. This space moves very quickly and there are many moving parts. We have much to learn to keep up with the pace of digital transformation progress.
By digitally connecting our industry expertise to the customer journey, we have an opportunity to get better at fulfilling any requirement through the delivery of fit-for-purpose solutions. The market may be different from what we have previously experienced, but the path to a successful digital transformation is durable and the core principles of success have not changed. It is important to stay the course, and great results will come in this new and digitally connected oil and gas world.
Robert Borne is the global domain director for digitalization and automation at Weatherford. He is charged with forming and leading the company vision, strategy, tactics, and actions in the digitalization and automation domain space while at the same time working to mitigate the challenges of customers on their digital transformation paths in an even larger context. He has more than 17 years’ experience in oilfield services across field engineering, operations, sales, business development, human resources, and general management. He holds a bachelor’s degree in chemical engineering from the University of Minnesota-Twin Cities and a master’s degree in business administration and finance from the Kelley School of Business at Indiana University-Bloomington.