Optimizing Business Performance Through Digital Innovation

Optimizing Business Performance Through Digital Innovation

Ten years ago, early adopters within the oil and gas industry began to address digital innovation as a method to optimize business performance.

This commitment to digital innovation from oil and gas companies is a fairly new priority, according to Gartner’s CIO Survey. While there was no specific funding allocated to digital innovation in 2014, it ranked as the third highest priority for chief information officers (CIOs) by 2019. Then, in 2020, the pandemic forced a digital transformation, and 85 percent of CIOs in the oil and gas industry have assumed responsibility for creating a change-enabling technical platform.

To continue operating through oil and gas supply issues from pricing wars and loss of demand from the COVID-19 pandemic, the oil and gas industry needed to modernize business operations for efficiency, business continuity and agility. The key themes in conversations with industry leaders began to center on digital transformation, not necessarily for the sake of innovation, but for sustainable operation and productivity.

CIOs understood that this was a must, but struggled with knowing where to start. The process looks different for everyone, but oil and gas companies who get it do three things.

Approach Digital Innovation from a Change Management Mindset

Change, particularly digital innovation, requires the right company-wide mindset to mitigate disruptions and frustration. By its nature, digitalization requires trying new things, and that means taking risks and being innovative. Cultural change is critical, and the greatest gains are made when working to push past natural resistance to risk-taking in the middle layers of management. Senior executives need to be involved in envisioning how the next wave of digital can lead to performance breakthroughs.

What’s likely is that favorable markets will return before the digital transformation, with a shortage of good people available during the transition. Most oil and gas companies are not taking advantage of digital to resolve workforce issues either, and this means cost pressures and staff reductions are resulting in achieving more with less. Sixty percent report having lost critical staff over the past two years, with another 50 percent saying that a beneficial impact of digital is boosting productivity of the employees that remain.

With regard to the workforce, digital is being used to upskill workers and to leverage contingent labor. Most companies think they are three-plus years away from having a solid base of digital skills, with the hope that digital will enable workers to focus on higher value activities instead of repetitive tasks.

Invest in Long-Term Solutions

The pace of change and the scope of the challenge is overwhelming to some companies to the extent that they are either frozen in place or are diving into a specific area, typically analytics, to at least give the impression of progress. While the short-term investment of time can be difficult to carve out, efficiency can be gained by a new system.

It can be tempting to mine the data out of the systems you have in place to transfer directly to a new system, but if you’re making this investment, take the extra step to implement the new system first, then transfer the data. You may realize you don’t need much of the old data anyway.

For example, a company might have 60 integrations within an existing system. Reimplementing that would be a huge undertaking. Instead, this is an opportunity for a fresh start and to ask the teams using the systems why they’re doing those things. You may find that there is no longer a business need for that integration. Or maybe it was created because of a limitation in the old software or process.

A long-term plan also means investing in the training and development, including in-depth field training for employees who will be inputting data and bringing laggards within your organization – maybe even skeptical senior leaders – to the table to ensure their concerns are heard.

If you’re planning to operate for the foreseeable future, this investment is a no-brainer. In the short-term, you’ll see this with the automation of previously long, manual processes that now allow you to see data in real-time. In the long-term, you’ll have clean data that you can rely on to optimize overall business performance and inform strategic decisions.

Realize the Power of the Cloud with Data Integration

Gone are the days of needing to be in two or more systems at once to see the full picture of your business. Thanks to data integration and the cloud, everyday users and decision makers alike can have access to the latest data across systems as soon as it is entered.

Legacy software solutions are powerful, but implementation can take a long time, and maintaining it can be costly. Often, you need vendor support and an on-site server to install the software. Once you have the infrastructure set up, someone within your organization will need to maintain it. Even if you have all those things in place, updates to the system are infrequent and often require additional vendor support before you can take full advantage of the latest features.

Cloud software solves all these issues. Cloud solutions are accessible online and easy to implement so you can get started right away. Cloud software is hosted in the cloud, so there’s no costly infrastructure to maintain, and it’s available for you to use wherever and whenever you need it. Most importantly, cloud software is iterative. That means updates are constantly deployed so you always have access to the latest and greatest features.

With the cloud, the way business systems communicate has progressed leaps and bounds to make integration easier with a turnkey approach. Integration with legacy solutions may be possible, but are typically more customized and cumbersome to maintain. Seamless integration with cloud software saves time with data entry or maintenance and improves visibility for reporting.

In the past, seeing the full picture across your systems required the same data point to be entered into each system. Data integration removes this repetitive task and the hours required to complete it. Instead, the data is entered at one point and shared across systems where it is used. This streamlines workflows and frees up time for your employees to focus on interpreting the data, rather than entering it.

While saving time and money on necessary data entry is a great benefit, you really see the impacts data integration can have on your business when it comes to reporting. Data integration allows you to see the data you need from multiple systems, side by side. For example, you can track field cost estimates in well lifecycle reporting, alongside actuals and estimates from accounting. This integrated workflow saves significant time and generates accounting reports that seamlessly bring real value to the company.

Defining Moment for Our Industry

The technology now exists to streamline digital innovation to optimize business performance, but it’s bigger than the technology. It’s about investing in better systems, our people and implementing long-term solutions. How seriously an oil and gas company takes this moment will define its future and, based on my conversations with CIOs, I am optimistic for our industry.

Quorum connects people and information across the energy value chain. The trusted source of decision-ready data for 1,800+ companies, Quorum Software makes the essential connections that let us work better together in the connected energy workplace. For more information, visit quorumsoftware.com.

Author Profile
Anton Petrosyan
Director of SaaS Products - Quorum Software

Anton Petrosyan is a director of SaaS Products and holds a Bachelor of Science in Electrical and Computer Engineering from University of Houston with high honors. Prior to starting at Quorum in 2018, Petrosyan spent over a decade designing and building oil and gas specific software. He specializes in delivering value to oil and gas operators through intuitive workflows and systems integration, and currently leads Quorum’s Well Lifecycle portfolio of products.

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