A Practical Guide to Managing Oil and Gas Digital Disruption

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Cost is not the number one concern for oil and gas companies considering going digital – despite the fact many organizations are looking to reduce capital expenditure in the face of challenging industry conditions.

Hexagon PPM recently surveyed nearly 100 senior executives in the global Oil and Gas industry and found that internal readiness issues – those relating to people and processes – are by far the single largest barrier to so-called industry-wide digital transformation.

Nearly two-thirds (60%) of respondents to PPM’s survey listed factors relating to people and internal processes as the main barrier to achieving digital transformation within their organisations. The reasons given include company workflows and processes not being ready, complex internal decision-making and buying processes, and lack of support from senior management.

Only 14% listed budgetary concerns as their organisation’s single largest barrier to digital transformation.

The survey results form part of a new report, “How to Build an Oil & Gas Digital Transformation Ecosystem”, which takes a practical look at managing digital disruption in the global oil and gas industry.

Overcoming Oil and Gas Digital Transformation Challenges

Hexagon PPM’s report, co-authored by Dr Huck Poh, a senior consultant to the Oil & Gas industry, outlines the challenges and opportunities oil and gas companies are facing on their digital transformation journeys, and proposes strategies to manage the process.

Digital transformation can help oil and gas companies claim numerous benefits such as enhanced efficiency and profitability, but the industry has been slow to embrace it. The report concludes that the case for innovation is hard to make when your organization is drowning in complex procedural and decision-making processes.

Hexagon PPM proposes a two-pronged approach (top-down / bottom-up) to digital transformation:

  1. Organizations are encouraged to build an ecosystem of skilled partners who can manage an enterprise-wide program for long-term digital transformation. The program must have oversight of both the infrastructure and technology, as well as tactics for managing the challenging people and process issues.
  2. While all-encompassing top-down innovation is essential, Hexagon PPM also urges organizations with low digital maturity to build a culture of incremental innovation, which encourages all employees to contribute to digitalizing processes and procedures. This allows for “quick wins” as the wider digital transformation program is established.

Digital Transformation in Action

To understand how others are managing enterprise-wide digital transformation, PPM’s report offers snapshots of the innovation process at oil and gas majors, including Shell and Petronas.

There’s also a fascinating case study in incremental innovation from Corbins Electric, a contractor to the construction industry, where the company leverages not only employees, but also graduate students from local colleges to “crowdsource” technology ideas. 

Click here to download Hexagon PPM’s report, “How to Build an Oil & Gas Digital Transformation Ecosystem”.


A Practical Guide to Managing Oil and Gas Digital Disruption

15 March 2018


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