6 Tips on how oil & gas industries will manage the digital transformation

13 January 2022

SIRFULL's long-time experience in the oil & gas and petrochemical industries has taught us many interesting elements.

Among them, we’ve had the chance to witness how one or the other company approaches the challenges and difficulties of digital transformation. Especially in the oil & gas industry, the transition to a digital corporate culture is often still a long way to go, which is why we would like to take a closer look at some points in this article that should help such companies embrace this change.

 

1. Why digitalization is so important

Companies in the oil and gas sector, which 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 the digital transformation one of their top priorities. Indeed, if such a company intends to respond to the growing and evolving needs of its consumers, digitalization is the only way that such companies will be able to maximize their profits and improve their efficiency. The benefits that oil & gas companies derive from this outweigh by far the efforts of implementation. These include digital asset lifecycle management, which enables strategic decisions to be supported in a data-secured manner and thus new business models to be developed. 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 the different work areas and thus increase operational transparency. An appropriate keyword in this context is the so-called operational excellence.

2. The right business strategy

Regardless of the sector in which a company operates, it is always extremely important that both the management and the human resource department are aware of the company’s strategy at all times. Knowing which goal(s) to aim for and in what time frame they ought to be achieved, will result in all employees pulling together: It brings focus and provides both direction and rhythm.

In digital transformation, the situation is very similar: a digital transformation strategy is needed. In the oil & gas industry, the following stages may help in achieving the goal:

  1. Ideation
  2. Market analysis
  3. Elaboration of the vision:
    • Shift from physical to digital: mechanization, sensor technology, transmission technology
    • Expansion of the digitalization: Integration, analysis, and visualization
    • Completion of the digitalization: robotization, production, and virtualization
  1. Evaluation of the current state of things
  2. Adapting the current infrastructure in line with the new strategy

3. The right corporate culture

As already outlined in point 2, it is incredibly important that a company informs its employees about the envisaged strategy. But is this really enough? If a company wishes to realize its goals in the best possible way and, on top of that, make its employees true enthusiasts and ambassadors of the company, transparent and clear communication at all levels is indispensable. As Louis V. Gerstner Jr, former CEO of IBM once said, “In the end, an organization (..) is nothing more than the collective capacity of its people to create value.”

The digital transformation will therefore only succeed if the employees of the company in question are convinced of the benefits of this change. This means that a company that invests in the transformation should also make sure that its employees are involved and informed about the motives and benefits. The success of the digital transformation depends not least on the digital corporate culture of the company. Its implementation ought to be supported collectively, by every employee.

4. Investment

Undoubtedly, investing in the digitalization of a company is costly. The amount of this financial expenditure depends on many factors and as a result, this often becomes an obstacle for many companies. In a way, it sometimes provides an incentive not to implement it. But it should be remembered that investments of this kind represent investments in a profit-maximizing future for the company. In the long run, costs are reduced, risks are minimized and productivity is boosted. Additionally, the company will also succeed in securing far better profits and attracting more customers, because transparency also plays an important role here.

5. Setting digital goals

A well-considered digital strategy ensures the success of the business strategy. A company should therefore never neglect to precisely name the goals of the digital transformation. KPIs in areas such as cost-saving, risk minimization, and production gains can help.

6. Strategic adjustments

The market in which a company operates never stands still. Be it in terms of technology, customer needs, competitive structure, supply chain, or legal standards. The corporate strategy should therefore always be developed further so that it is continuously improved in view of the corporate environment. This also includes digital strategy and it is not always advisable to look for answers internally. On the contrary, it is advisable to work with external partners. Consulting firms can be useful for this, but software vendors with whom you already have good relations are an equally beneficial element. Software vendors are specialized in accurately following the evolution of the market and anticipating the needs of their clients, which is why they can be of great help in the elaboration of a digital strategy or digital roadmap. We, the team at SIRFULL, can also provide you with interesting insights on the matter.

 

Would you like to learn more about how we can provide your company with software that strongly enhances digital transformation? Feel free to contact us via our contact form.

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About SIRFULL

Sirfull is a software vendor with a strong industrial culture and French know-how, which develops solutions that enable its customers to anticipate changes in their market.

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