Oil and gas organizations are engaging in increasingly complex investments while navigating a shrinking supply chain, a digital revolution (goodbye, spreadsheets!), and a mounting focus on sustainability.
Energy companies that want to expand into new markets must diversify their project portfolios, including exploration of renewable and hydrogen opportunities, to compete with shale operators. So, what role can innovation play in improving productivity in the delivery of complex capital projects?
A recent roundtable led by Geoff Roberts, director, energy industry strategy, Oracle Construction and Engineering, brought together project and innovation leaders from various energy sectors in Europe to discuss capital project delivery, how innovation impacts productivity, and how digitization can improve the oil and gas industry overall by increasing efficiency, cutting costs, and more.
The roundtable discussion focused on five key questions:
Industry experts recognize that achieving digitization is problematic, despite the wide selection of technologies on the market. A recent McKinsey study identified that over the last three years, 3,000 new products appeared on the market claiming to be innovative.*
Assessing which products will add value to your business may be difficult due to the sheer number of vendors in the market. How can you find a vendor that delivers a return on investment amid all the noise?
Additionally, some businesses are not always aligned on what digitization means to them even after they’ve chosen their technology vendors. One roundtable participant observed that true innovation requires time, patience, and money.
Many organizations resort to selecting technology they have used in the past due to time constraints. However, selecting a familiar vendor isn’t necessarily a true shift toward digitization if the technology provider isn’t the right fit for your organization’s needs.
One solution to finding the right software provider could involve reducing the number of vendors or partners and changing the way organizations interact with these groups. “Taking vendors on your journey to digitization can help solve for this,” says Roberts.
Industry project managers agree that instant access to data allows project teams to make more informed and efficient decisions using digital technology while cutting costs on active and future projects. In some cases, organizations still resist digitization, often fearing that technology may supersede humans’ roles in innovation despite the obvious benefits of technology adoption.
Establishing the correct return on investment upfront is critical to digitization, including understanding incremental gains. In addition, the organizations reviewing new technologies must be comfortable “failing fast” to reap the most benefits from digital transformation.
The internal tech adoption rate will also likely increase once organizations experience success using technology. Organizations begin to foster a more collaborative environment with employees that are adopting new technology instead of resisting change.
The roundtable participants and industry project managers agreed that moving applications and data storage capacities to the cloud is scalable, easy to deploy, and provides easy access to the supply chain.
However, implementing cloud technology solutions in construction often requires an investment in time and resources despite enabling wider and easier access to applications and data. Construction companies are less open to this kind of investment, partly due to their concerns about data protection.
Similarly, integrating different frameworks may become problematic. Many organizations with pre-existing architecture may resist outsourcing this type of technology due to security, logistics, and cost.
For some organizations, digitization is still a new concept. These companies are starting their journey without any clear benchmarks. Some businesses invested in innovation are linking employee key performance indicators (KPIs) to find more efficient ways to doing the same activities differently.
KPIs are still at odds with most legacy companies that have well-defined core businesses because these organizations often resist change and lack an innovative outlook, despite the fact KPIs may foster a more open mindset with employees. However, during the pandemic, digitization continued to accelerate across global industries, including many laggard E&C companies.
The roundtable participants agree that digitization offers a more collaborative future in the delivery of capital projects. The Oracle Industries Innovation Lab collaborates with numerous technology partners to embed their innovations into the lab, helping support the future of capital project delivery.
The oil and gas industry can optimistically look forward to a more technologically advanced future. The saying, “Alone we go faster, but together we go further” certainly applies here.
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Geoff Roberts is director of energy industry strategy for Oracle Construction and Engineering.