Digital Transformation Takes the Next Step at OTC

Several ARC Advisory Group analysts recently attended the 2018 Offshore Technology Conference (OTC) held at NRG Park in Houston.  A key theme that resonated throughout the conference was the increasing use of digital/cloud/IoT technologies to lower break-even costs per barrel and solve current problems that negatively impact oil production.  At last year’s OTC, it was clear that oil companies were becoming open to adopting new technology breakthroughs to help them lower costs and increase operational efficiency. This year, the discussions evolved to include specific applications and how these new technologies could be used to solve known, real-world problems. 

Staffing Limitations a Hidden Impediment to Digital Transformation

Among the key themes we heard discussed at this year’s conference was the shortage of end user resources to implement the necessary changes in work processes to embrace a true digital transformation.  Many consider this to be a hidden impediment to change.  Sensitive to this growing challenge of resource constraints, several suppliers highlighted solutions focused on improving collaboration within the operator’s own organization as well as across the external ecosystems common in both offshore and onshore projects.

Start with a Business Problem, Not a Technology

Another prominent theme emerging from the conference was the importance for end users to first focus on the problem to be solved, rather than the available technologies.  Oil companies should begin their digital transformation journey by identifying a few of the most critical problems facing their operations today and then try to identify digital solutions designed to alleviate these problems.  Once oil companies have optimized their most critical assets and applications, they can then turn to machine learning solutions to learn more about what they don't already know about their company’s assets, processes, etc.  The key is to start by identifying and solving a problem that impacts the business, rather than falling for the hype of the latest technology.

Use the Marine Industry as a Blueprint

During the conference, several people referred to the marine industry as a potential source of inspiration for oil companies looking for a roadmap to the digital enterprise.  The marine industry is years ahead of the oil & gas industry, with many new ships being constructed today as fully connected “digital” ships.  The oil & gas industry, on the other hand, has been slower to adopt new digital or cloud-based technologies.  Most of the major oil companies are not as well connected as they could be and thus not getting the full value from the data they already collect.  Oil companies should look to the marine industry as a model for how to best progress along the digital maturity curve.

Few Manufacturers are Ready for the Digital Transformation

The truth is, only a small fraction of industrial manufacturers would get the full value of any new digital technology investment they were to make today.  Most manufacturers must overcome significant barriers in organizational accountability, culture, and employee change management before they are ready to get the most from their digital technology investments.  Oil companies that want to learn more about the essential elements to a successful digital transformation should consider joining ARC Advisory Group’s Digital Transformation advisory service.  

ARC's Digital Transformation click here