The phrase “data is the new oil” was coined in 2006 by U.K. mathematician Clive Humby who observed that data had become as valuable a resource as oil was a century ago. The rise of big data over the past decade proves his point. As valuable as data is, the sheer volume of it is overwhelming, and much like Humby’s analogy, is only good if it’s refined and processed in the right way.
That’s especially true of Oil and Gas (O&G) businesses, which generate vast amounts of field readings and vital production data. In addition, this volume also includes operational management, including complex ownership and partnership agreements, compliance and tax regulations. The inability to access accurate data quickly is a competitive disadvantage, as even small errors and inefficiencies can slow decisions, delay projects, and ultimately cost millions of dollars. These challenges are an issue for an industry that has historically relied on manual and outdated processes, as well as physical, hard copy documents to capture, store, and share data.
Stressed by fluctuations in an unstable market and repercussions from the pandemic, O&G companies need to modernize their approach to data by streamlining processes and embracing digital technology. That evolution demands not only new technology solutions but also new skills and expertise and a hard look at staffing and training. While it may be tempting to postpone any investment until conditions stabilize, the time to act is now.
O&G companies are adopting digital approaches
A recent Ernst & Young survey on digital skills and the oil and gas workforce underscores the urgency of the situation. EY surveyed independents, major oil producers, and services companies about its workforce requirements and priorities as the entire industry shifts to digital. The results showed that businesses are acutely aware of the need to transform, as 92% of respondents said a change in operations was needed. The respondents also said that progress was in motion, with 80% reporting they were already investing in digital technology.
However, the respondents also acknowledged the need to expand and improve upon their existing efforts in areas such as remote monitoring, mobile platforms and apps, cloud computing, operational tech, advanced analytics, and artificial intelligence.
For example, to cope with the restrictions caused by COVID-19, companies have greatly accelerated the adoption of cloud and mobile within financial and business functions. These deployments let organizations move more quickly and do more with less. Field teams are deploying mobile apps to eliminate paper and bring this data to the operations team in a safe and secure manner. O&G companies can spend more time on key business functions like managing leases and wells, and less time and effort on tedious and inaccurate processes like manual data entry.
It’s not enough to just manage the data transfer to the back-office. Companies also need to ensure that this data integrates natively into a back office ERP or financial system, providing a complete view of all the information. Financial and operations teams need this integration to be frictionless in order to provide actionable and measurable insights. One example WolfePak customers are adopting is using software to digitize documents and workflows, creating electronic depositories that are accessible remotely.
Addressing the oil and gas skills gap
To help transform its operations, companies are working to overcome typical barriers to new technology adoption, including change management, workforce adoption, and new skills assessments and training.
The executives surveyed in the EY report said that nearly 60% of their employees need to be reskilled to use modern tools in order to maintain a competitive advantage, but unfortunately, only 43% of workers will receive the critical training they need. The time to reskill an employee averages about 10 months, and the areas most in need include data analytics, cybersecurity, cloud computing, design thinking, and artificial intelligence, according to the poll.
Technical skills are clearly a top priority but aren’t the only ones. Soft, or adaptive, skills are also important. Analytical thinking and innovation, creativity, critical thinking, and complex problem-solving will enable businesses to meet changing demands over time. EY observed that workers will need a combination of formal training, on-demand microlearning, experiential learning, and apprenticeship to build the necessary skills as the industry continues to evolve.
Many companies believe they are not adequately prepared for the future, according to the EY report. Only half are convinced they have a robust enough plan to reskill over the next three years. Obstacles include competing priorities within the business, difficulty prioritizing areas of focus, and the time commitment required to reskill. The EY report cited a need to rethink the approach to learning and leadership development programs, which demands a shared commitment across human resources, digital, and business.
The industry turmoil O&G companies are facing heightens the challenge. However, if business leaders focus only on cost-cutting to survive, it’s likely they’ll emerge from this downturn at a substantial disadvantage. Business leaders at O&G companies must find a way to invest now in the right software and technological solutions while coping with market pressures. As the EY report concludes: “Companies need the right digital technology—and a workforce with the skills and training to maximize those tools.”
Are you maximizing digital and online solutions? We’d love to learn more about your approach. Let’s talk.