How digital transformation is changing the oil and gas industry [Q&A]

refinery industry

Businesses across all sectors are looking to review their processes and launch digital transformation projects. But long-established industries like oil and gas, while innovative in some areas often lag behind with their back office systems.

We spoke to Leon Busch, COO of specialist in this sector WolfePak Software to find out how companies in this field are using transformation and what it's doing for their businesses.

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BN: Digital transformation is a phrase used often today, what does it mean specifically for the oil and gas market?

LB: There's always been technology purchases and evaluations with respect to processing oil and gas as a product, but the back-office has not kept pace in gathering data and examining its insights. Traditionally, only the largest oil and gas companies benefited from advanced technology deployments and automation to run their businesses. Now though, adoption and cost barriers have greatly diminished, enabling a larger number of companies to benefit from digital transformation and make the move from paper to digital.

Receiving and working with accurate data as quickly as possible continues to be a goal and a challenge for any organization. The oil and gas industry is no different in this regard, as companies in all industries want better real-time data, and greater efficiencies for data capture to facilitate more timely and accurate decision making. Given the recent turmoil in oil and gas, this is of tantamount importance, as companies need data to make decisions based on tight timelines in order to protect their margins and profitability.

BN: Why is digital transformation so critical today?

LB: The interesting dynamic in the oil and gas industry is that there is a lot of interplay between the companies themselves. So much information is exchanged daily between organizations -- from exploration and production companies to operators and first purchasers to midstream companies, and so on. There is inherent complexity in the information exchange.

The biggest opportunity for the industry is to actually do more digital business with each other and not just as individual entities. Helping the industry share information digitally and shed the manual and paper-based processes they are accustomed to is a major focus.

Right now, these efforts are focused on capturing data in the field, but there's a much greater opportunity to support the industry in totality to go digital across the various segments, especially as many of us continue to work remotely or are slowly reentering the office.

BN: What are some examples of how independent operators can go digital?

LB: The digitization of information in oil and gas is seen today in a lot of different areas. Field data capture is one. Document management is another. Deploying and automating advanced reporting and analytics is also an increased priority, given the current market volatility the industry is facing.

Of particular importance is optimizing the capacity of resources. Direct, rapid access to production data can accelerate the move to new digital workflows and offer immediate efficiency gains. Companies need to make it as easy as possible to collect, manage and analyze production data. This will eliminate errors, reduce manual data entry and enable easy integration with other systems -- not only internally, but with outside parties.

Digital integration will determine how and what companies can automate and integrate natively into their business operations. Closed systems, based on legacy and outdated technologies, will cause integration barriers if the systems can’t work and communicate with each other. Digital workflows must be in sync in order to distribute the necessary information and contextual details all departments and partners require.

BN: What kind of cloud computing and mobile adoption are you seeing in oil and gas?

LB: Today's advancement of cloud and mobile-first solutions makes the move to digital more accessible to a much larger number of oil and gas companies than ever before. The market offers a considerable amount of choices. And with recent events like COVID-19 and market turmoil, companies have greatly accelerated their adoption of cloud and mobile within financial and business functions.

These deployments let businesses do more with less, faster, if properly implemented and adopted. Companies can manage more leases and wells, as well as reduce the time and effort spent supervising teams. For example, field teams are deploying mobile apps to eliminate paper touch points and the need to physically bring this data to the operations team. The work done here is focused first on how mobile apps efficiently help an employee out in the field. Does it do the work quickly and efficiently? What happens next? The data must integrate natively into a back office ERP or financial system to provide measurable insights that move the business forward.

While technology deployments are critical, it's even more important to create digital processes that actually make sense, and are easily adopted by everyone using them. Ensuring frictionless data transfer can make this information usable on a daily basis to ensure business and financial teams are focusing on the right metrics and investing where they should.

BN: What advice would you give executives looking to move from paper to digital?

LB: Moving to an electronic process is relatively easy. You can start today. However, the oil and gas industry is wonderfully complex, and there are nuances and details you have to take into account when digitizing processes that relate to workflow and integration. Do not spot solve. It's not only about a capture point but the entire business process.

Start with the goal in mind. Ask yourself, what are we really trying to accomplish? Pick one event or process that everyone agrees is either inefficient or extremely valuable -- or both. Next contemplate who else is dependent on this data and how it is used from start to finish. How can it be moved in a frictionless way? People often rush this step... Don't.

Involve leadership in the change management process. If the executives are on board, then they can further distill the value throughout the company. This helps make your digital processes part of the way business is done going forward.

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