SIRFULL’s long experience in the oil & gas and petrochemical sectors has taught us many interesting things.
Among them, we had the chance to see how one company or another is approaching the challenges and difficulties of digital transformation. In the oil and gas industry in particular, the transition to a digital business culture is often a long road ahead. Therefore, in this article, we would like to take a closer look at some of the points that should help these companies embark on this change.
Why digitization is so important
Oil and gas companies that intend to maintain their economic status in terms of energy supply and also want to attract new customers will not be able to avoid making digital transformation one of their top priorities. Indeed, if such a company intends to meet the growing and evolving needs of its consumers, digitization is the only way for these companies to maximize their profits and improve their efficiency. The benefits to oil and gas companies far outweigh the implementation efforts. This includes digital asset lifecycle management, which supports strategic decisions in a data-secure way and thus enables the development of new business models. Another example is the circular collaborative ecosystem, which uses all of the company’s existing digital platforms to reduce costs, optimize workloads, increase coherence and consistency between different work areas and thus increase operational transparency. An appropriate keyword in this context is what is called operational excellence.
The right business strategy
Regardless of a company’s sector of activity, it is always extremely important for the management and the human resources department to know the company’s strategy at all times. Knowing what goal(s) to aim for and by what timeframe they should be achieved will keep everyone together: It helps to focus and set a direction and pace. When it comes to digital transformation, the situation is very similar: a digital transformation strategy is needed. In the oil and gas sector, the following steps can help achieve the goal:
- Ideation
- Market analysis
- Vision Development:
- Transition from physical to digital: mechanization, sensor technology, transmission technology.
- Digitization development: Integration, analysis and visualization
- Completion of digitalization: robotization, production and virtualization.
- Assessment of the current state of affairs
- Adaptation of the current infrastructure to the new strategy.
The right corporate culture
As already pointed out in point 2, it is incredibly important that a company informs its employees of the planned strategy. But is that really enough? If a company wants to achieve its goals in the best possible way and, in addition, make its employees true enthusiasts and ambassadors of the company, transparent and clear communication at all levels is essential. As Louis V. Gerstner Jr, former CEO of IBM, “In the end, an organization…is nothing more than the collective ability of its employees to create value.”
Digital transformation will only be successful if the employees of the company in question are convinced of the benefits of this change. This means that a company that invests in transformation must also ensure that its employees are involved and informed of the reasons and benefits. The success of the digital transformation depends in particular on the digital culture of the company. Its implementation must be supported collectively, by each employee.
Investment
There is no doubt that investing in the digitization of a company is expensive. The amount of this financial expense depends on many factors and, as a result, it often becomes an obstacle for many companies. In a way, this is sometimes an incentive not to implement it. But we must not forget that investments of this type represent investments in a future of maximizing profits for the company. In the long run, costs are reduced, risks are minimized and productivity is boosted. In addition, the company will also manage to make much better profits and attract more customers, as transparency also plays an important role in this respect.
Set numerical goals
A well-thought-out digital strategy ensures the success of the business strategy. A company should therefore never neglect to name the precise objectives of digital transformation. Key performance indicators (KPIs) in areas such as cost reduction, risk mitigation and production gains can be useful.
Strategic adjustments
The market in which a company operates never stands still. Whether in terms of technology, customer needs, competitive structure, supply chain or legal standards. The corporate strategy must therefore always be perfected in order to be continuously improved according to the company’s environment. This also includes digital strategy and it is not always advisable to look for answers internally. Instead, it is advisable to work with external partners. Consulting firms can be helpful for this, but software vendors with whom you already have a good relationship are an equally beneficial element. Software companies are specialized in accurately monitoring market evolution and anticipating their customers’ needs, which is why they can be of great help in developing a digital strategy or a digital roadmap.
At SIRFULL, we can also provide you with interesting information on this subject.
