How Digital Transformation Can Improve Operational Efficiency in Oil and Gas Industry Companies

How Digital Transformation Can Improve Operational Efficiency in Oil and Gas Industry Companies

Improving Operational Efficiency

The oil and gas industry has come a long way in recent years, implementing new technologies to improve operations and explore opportunities once thought impossible. The digital transformation of oil and gas exploration has moved so quickly that many companies are beginning to see significant returns on their investments. By continuing to modernize and update their equipment, they can look forward to even more significant successes in the future as well. Read on below for more information about how digital transformation can improve operational efficiency in the oil and gas industry.

Why does digital transformation matter for the oil and gas industry?

The oil and gas industry is one of the world’s most capital-intensive sectors. Digital transformation allows oil and gas companies to improve operational efficiency by collecting, analyzing, communicating, and acting on data. A digital transformation strategy can improve operational efficiency by providing better insights into company performance, optimizing existing production processes, increasing discovery rates, and lowering costs. We discuss how companies can achieve these results through digital transformation initiatives such as building a data culture inside their organization or implementing a next-generation business platform to improve operations.

oil and gas industry

Understanding your current state of operations

There’s a lot of data that you need to get familiar with regarding oil and gas. The industry tends to rely on spreadsheets, so do yourself a favor by evaluating your current state of operations: How much information do you have access to or don’t have access to? How much of your data is centralized and how much of it is in individual silos with no integration?  What systems are currently in place? Then make sure your team has access to all tools necessary to understand production data before moving on. One quick way to figure out where there might be problems is to create an Operations Dashboard. Gather KPIs together: Once you have access, it’s time for some analysis.

Assessing where you want to be in 5 years

The first step to Digital Transformation has a plan. Take some time to analyze where you want your company to be in 5 years. What types of technologies would you like to use? How will these technologies improve customer experience or better use your natural resources? You can utilize proven tools such as a SWOT analysis or simply talk to industry leaders who have been a part of successful transformation projects in your industry.  A conversation with an industry leader can often save you months of wasted time and money. It’s a simple exercise that will allow you to see what areas need improvement, what strengths can be leveraged, and identify your weaknesses relative to the competition. At GCS, we offer business technology consulting if you’re interested in getting an outside perspective. After determining where you want to be, start thinking about how digital transformation can help get you there faster, cheaper, and with less risk than doing it on your own.

User-first Software Can Improve Operational Efficiency in Oil and Gas Industry Companies

Sometimes the simplest realizations can lead to the most productive optimizations. One area our team noticed an issue was in industrial HR processes. Most HR processes include complicated paperwork for many younger or more transient employees who didn’t have easy access to a printer. The easy switch to using texting as the primary means of communication and information workflows helped significantly speed the processing of their applications. This integration let prospects and employees text images of their documents quickly, and HR teams could proceed with them much more rapidly than before.

operational efficiency

Benefits of Efficiency in the Oil and Gas Industry

Oil and gas operational efficiency is usually achieved by employing advanced technology— from modern data analytics to workflow management systems to energy-efficient equipment. These solutions may not only reduce operating costs; they can also increase productivity, cut waste, enhance security, and provide numerous other benefits to oil and gas industry companies of all sizes. And because many of these solutions are web-based or cloud-based — meaning managers can access data remotely via any device — your entire organization can benefit regardless of location.

Productivity Leads to Energy Efficiency Which is a Top Priority in the Oil and Gas Industry

Oil and gas operational efficiency is usually achieved by employing advanced technology— from modern data analytics to workflow management systems to energy-efficient equipment. These solutions may not only reduce operating costs; they can also increase productivity, cut waste, enhance security, and provide numerous other benefits to oil and gas industry companies of all sizes. And because many of these solutions are web-based or cloud-based — meaning managers can access data remotely via any device — your entire organization can benefit regardless of location.

Cutting back on unnecessary lag-time and wasted power can compound extensive energy savings over time.

Automatic identification and data capture (AIDC)

Analog data-collection systems used to manage operational processes are not just slow and inefficient, they’re also costly—in energy costs alone. AIDC is a technology that replaces manual systems with automated ones, collecting digital data about plant performance that can be easily analyzed using big-data applications. The result is a better understanding of production processes leading to continuous improvement opportunities.

operational efficiency in oil and gas industry

Cross Software Integrations to Avoid Double-Entry and Maintain One Source of Truth

In an era of software-defined everything, cross-platform integrations are a necessity to create truly SMART systems that work for you. Whether it’s between your SCADA network and ERP system or between IT monitoring software and critical equipment, every system’s configuration should have a way to pull information from each other. That’s because one of oilfield ops’ most common problems is double-entry—or when managers enter data into multiple systems, but only one can be a valuable source. But integrating across platforms means you have access to accurate, real-time information that can help you make more informed decisions about your business.

Integrating systems also allows you to get more mileage out of your exiting technologies and in some cases, can extend the life of your accounting system or ERP by years, simply by finding new and modern ways to import and export data to the system.  We’ve seen many cases where 7-figure system replacement projects were avoided simply by creating an integration first culture driven by data to those same systems.  This allows various systems to maintain effectiveness and achieve high ROI by simply doing what it was designed.  It’s like creating a brain for your organization to growth with.

Final Thoughts

The oil and gas industry is one of few industries that has seen increasing operational costs over recent years due to an increase in regulation, declining production, increased cyber security risks, and a lack of pipeline capacity. Oil producers are turning to digital transformation to drive efficiency to maintain market share against their competitors. Companies are starting to realize that digitization can help them maintain their market share and create new growth opportunities. To best utilize these new opportunities, companies need a transformation methodology to take advantage of emerging technologies without sacrificing efficiency.

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