People and processes the biggest barrier to oil & gas digital transformation: New report

Cost is not the biggest concern preventing oil and gas digital transformation – despite many organisations reducing IT spend in the face of challenging industry conditions.

A recent survey by energy industry technology partner, Hexagon PPM, 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 of oil and gas industry senior executives 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.

Overcoming oil & gas digital transformation challenges

The survey results form part of a new report, “How to Build an Oil & Gas Digital Transformation Ecosystem”, which PPM co-authored with Dr Huck Poh, a senior consultant to the Oil & Gas industry.

The report 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 related to enhanced efficiency and profitability, but the oil and gas industry has been slow to embrace it. The case for innovation is hard to make when your organisation is drowning in frustratingly complex procedural and decision-making processes.

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

1. Organisations are encouraged to build an ecosystem of skilled partners who can manage an enterprise-wide program of long-range digital transformation. This includes not only the infrastructure and technology, but also tactics for managing the challenging people and process issues.
2. While all-encompassing top-down innovation is essential, the report also outlines how organisations can make “quick gains” by building a culture of incremental innovation, which encourages all employees to contribute to digitalising procedures and processes.

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 one U.S.-based contractor to the construction industry, Corbins Electric, where the company leverages not only employees, but graduate students from local colleges to “crowdsource” app ideas.

Visit http://hexagonppm.com to download Hexagon PPM’s report, “How to Build an Oil & Gas Digital Transformation Ecosystem”.

Story credit: Hexagon PPM