How to Embrace Digital Transformation in the
Oil and Gas Industry?

Undoubtedly, digital technologies are transforming businesses across various industry verticals helping them unlock new opportunities for better growth. The oil and gas industry has been witnessing price hikes especially after the COVID-19 pandemic and till now, there is no sign of slowing down. Initially, the price for a barrel of oil on major exchanges was below $25 but two years later, it was above $100, driven by surging demand, geopolitical volatility and supply chain disruptions.
Companies must now focus on embracing change with the latest technologies that can help them maintain output and overcome the challenges. In this blog, we will learn about the rising need for Digital Transformation in the Oil and Gas Industry and how businesses can transform their operations for better results.

Also Read: Why Your Business Needs Digital Transformation to Move Forward?

Why Oil and gas Company Leaders are Not Willing to Embrace Digital Transformation?

Very few executives and professionals in oil and gas companies have deployed digital technologies at the scale and made meaningful enhancements to the best performance indicators that matter most to them. However, research by McKinsey says that almost every company have been running digitization projects to improve their parts of operations but only 70% of them have truly moved beyond the pilot phase.
We know that technology is not the problem as many pilot projects are successful in meeting their goals. Rather, digital transformations fail due to some of these reasons-

• Not Convinced Enough

Technologies and use cases sometimes fail to generate clear value or project teams cannot demonstrate the bottom-line impact of their efforts. This makes management not convinced that technologies could deliver improvements in the issues, making them unwilling to commit the resources necessary for widespread deployment.

• No Proper Training for New Technologies

Making employees aware of the new technologies is essential as they need to learn or brush up their skills, adopt new processes and go beyond long-standing working practices. This is not possible without the help of the right incentives and support.

• Complex Integration Process

Before investing in new technology, it is important to ensure that your digital approach has the capabilities to integrate seamlessly with the organization’s IT and operational technology infrastructure.

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Best Tech Transformation Ideas for Business Owners of Gas and Oil Industry

Overcoming the challenges faced by the oil and gas industry is important and here are some actions that CEOs and business owners of these businesses can consider-

• Keep Focus on Value Creation First

Ensure that the business leaders of oil and gas companies are clear about the business problems they plan to address and the desired results they wish to achieve. Whether you are planning to add value with tech-enabled exploration and drilling, end-to-end reservoir management or condition-based maintenance, digital transformation methods must be cost-effective to reduce carbon footprint and maximize output for every unit of energy they consume.

• Know the Impact of Digital Investments

Companies must rely on mechanisms that can help them track the progress and bottom-line impact of every project after digital transformation. The mechanisms should provide a clear understanding of the current performance baseline, robust KPIs and visualization tools for enhanced decision-making capabilities.

• Focus on Resources Who Will Operate Technology

If the people who will operate the technology are not good enough, even the best technology cannot achieve the best results. This means a successful digital transformation is a people-first approach and advanced solutions will also fail if resources produce erroneous results. Successful companies are the ones that deploy digital specialists to train frontline resources in agile working methods or the usage of new digital tools.
Leaders must understand the changing mindsets and behaviors of their people to unlock new ways of working effectively.

• Offer the Right Incentives and Support Needed to Adopt

Making people adopt new digital tools and advanced ways of working requires capability building, support and incentives. Ensure that your resources are incentivized properly to maintain them. Incentives can be given in the form of financial rewards for the bottom-line impact of digital projects or payment as per the market rates for in-demand skills.
Another way is to introduce gamification techniques and engage their employees to boost performance through friendly competition or daily quizzes for team members comparing performance in real-time.

• Develop the Right Technology Infrastructure

The technology infrastructure at oil and gas companies can be complex as these organizations make use of a combination of modern and legacy IT and OT systems as well and the business data are distributed across those systems. As it can be hard to access data and interpret them with the shaky foundations of digital transformation, successful companies often look for digital initiatives that support effective technology infrastructure.
These are helpful to not just meet the strategic objectives of business but also support the day-to-day activities of all employees.

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Closing Statement

As we can see, oil and gas companies must go beyond the traditional approach to enhance their operations and improve the reliability and availability of their assets while cutting costs and reducing carbon emissions. With new technologies evolving every year like AI, IoT, Virtual and Augmented Reality, drones, blockchain-enabled data exchange and more, your business must consider digitization as an essential part of unlocking the immense gains.
If you are also planning to embrace the potential of digital technologies in your oil and gas business, Clavax is the USAs well renowned Enterprise Digital Transformation Service Company that enables businesses across various sectors to use digitization and improve efficiency across the end-to-end value chain at lower costs. Connect with our experts today to upgrade your business capabilities with solutions aligned with top digital technologies.

Also Read: The Way IoT is Transforming the Travelling and Transportation Industry