Upstream: Optimize maintenance strategies
Upstream companies that explore potential oil and gas fields and bring the materials to the surface are likely to consolidate according to McKinsey. Large companies with strong balance sheets and hefty cash reserves are looking for undervalued or distressed assets that smaller companies are forced to divest in order to stay afloat. These larger companies are acquiring the discounted assets (and oftentimes, the struggling smaller companies too) to enrich their portfolio. At the same time, emerging competitors with more agile technology and processes, such as hybrid drilling rigs, are likely to survive based on novel offerings that place them ahead of competitors.
Technology will help upstream companies thrive by giving them the ability to reimagine operating models with shared resource pools, vendor flexibility, and maintenance campaigns. For example, routine maintenance strategies for most upstream companies were weak and lacked urgency. That has proven costly. A digital platform that aggregates information about assets, resources, and schedules — such as acustomer relationship management (CRM) platform — can improve maintenance planning and coordination.
Consider the following:
ENABLE REMOTE ASSISTANCE
When a field technician arrives at a job site, the issue may go beyond their scope of technical knowledge. Field technicians can useremote visual assistance to connect with someone on their team with the necessary technical expertise and collaborate on a resolution in real-time by video. It’s also important that field technicians have offline mobile capabilities. Before they arrive at the job site, technicians download customer and job information, task lists, and knowledge articles to their device so that they have everything they need to resolve an issue in locations without internet access.
Oilfield services: Accelerate the opportunity-to-cash
This segment has struggled since 2014 fromover-capacity and collapsed profitability. Bankruptcies and restructurings are rampant. The pandemic exacerbated these longstanding issues because it curtailed production and forced the cancellation of capital projects.
Digital transformation can help these companies modulate challenges and reduce costs, innovate, and enhance value. With a CRM, oilfield services remove barriers between legacy technology systems to connect key information from the back office into the field or front office — where the highest value work often occurs. Here’s how:
- Hit the ground running. A data-driven platform helps oilfield service get up and running faster. That’s because it consolidates existing customer data from legacy technology systems. Everyone has access to the same data to improve engagement with customers, suppliers, government regulators, and local communities.
- Automate processes. Automation simplifies manual and tedious tasks with prebuilt workflows. This gives employees time back to tackle more complex challenges and achieve broader business goals and objectives.
- Optimize pricing. AI is embedded in the platform to help oilfield service companies make smarter business decisions based on data. AI analyzes data to identify the most profitable deals and help companies optimize prices during contract bidding.
- Reduce time in the sales cycle. As a thin-margin business with fixed costs, oilfield service companies carefully monitor the sales cycle. When everyone works off the same platform, they reduce the time between when a prospect is identified and when they become a paying customer. This allows them to secure more revenue and pursue more lucrative opportunities.
Downstream: Get smart about renewables
Large downstream businesses need to prepare and adapt to a changing world. Demand for traditional oil and gas is projected to decline as alternative energy sources increase, including wind, solar, and batteries.
The pandemic delayed alternative energy projects, but renewable capacity is expected to increase, according to theInternational Energy Agency. This innovation will have strong support from the public.
With the increased focus on renewables and sustainability, downstream businesses will face pressure on carbon emissions. They will need to rethink their energy portfolios so that they can pivot to greener technologies and business models. In order to meet this need, downstream companies may opt to acquire other businesses to enhance their offerings, which would require a rapid and streamlined onboarding process.
The energy transition will require agile digital platforms that are flexible enough to support new business strategies. These platforms will allow downstream companies to onboard new renewable acquisitions and shift business to prepare for the future energy state. Automating workflows helps these companies quickly recognize value from new alternative energy investments. And data analysis allows leaders to make more informed decisions about processes and product portfolios.
As a result of the push for renewable energies, and expected secular changes in commuting emerge, the oil and gas industry is preparing for an extended depressed price environment — although the prices are rising in the near-term as pent-up demand for travel creates a spike. If companies continue to embrace video conference and digital communication, the oil and gas industry will need to take a close look at costs to protect profit margins.
