A report from Gartner states that 91% of businesses are involved in some form of digital initiatives. In comparison, 87% of senior business leaders believe prioritizing digitization holds the key to business success in this tech-driven age.
Digital tools and innovative technology have become vital for asset-centric industries such as oil and gas, energy, mining, etc.
“Digital transformation” has become synonymous with businesses across various industries today. As the business landscape continues to evolve and embrace digital solutions to register enhanced efficiency and productivity in daily operations, digital transformation in the oil and gas industry only seems inevitable.
The oil and gas industry faces many challenges to stay operational and profitable against rising costs, the global energy transition, a shortage of skilled human resources, meeting environmental regulations, etc.
In this blog, we will understand what oil and gas digital transformation is, the challenges of digital transformation, and its business benefits.
So, without further ado, let’s get started.
Digital transformation of the oil and gas industry entails incorporating and utilizing cutting-edge technologies such as the Internet of Things (IoT), Cloud Services, Field Ticketing, Preventive Maintenance, Inventory Management and more.
These disruptive technologies have the potential to change the way upstream, middle, and downstream oil and gas companies operate by lowering costs, enhancing customer experience, and driving improved efficiency and employee productivity.
By harnessing the capabilities of cutting-edge technology, oil and gas professionals can get optimized equipment performance, accurate data, and seamless collaboration between back-end office and on-site technicians.
Stat Fact: A report from Technavio predicts the digital transformation in the oil and gas industry to reach $68.64 billion in 2028, witnessing a CAGR of 16.73% between 2023 and 2028. |
The primary objective of a comprehensive digital transformation is to significantly reduce dependency on time-consuming, tedious manual work processes that often lead to error-prone data accumulation and management as well as improper resource utilization.
However, achieving digital transformation for a business is easier said than done. Depending on the industry and nature of business operations, it can be a long, complex process.
Next, we’ll talk about various digitization challenges facing the oil and gas industry.
Do you know that 70% of companies initiating digital transformation are stuck in the pilot phase? What could be the reason for this delay?
Every company faces a set of challenges due to different operational procedures and non-tech factors, but some common digital transformation issues must be addressed, which are mentioned below.
Investing in modern technology can improve operational efficiency, but a comprehensive digital transformation can come at a significant cost. This can be tough for several small and medium-sized companies facing budget constraints. High technology cost often forces many businesses to postpone digital initiatives, which is likely to backfire due to continuous usage of outdated technology.
Modernizing traditional legacy systems and manual processes can be a complex process, but also presents new benefits and opportunities. Many oil and gas companies use machinery that was designed for the last century and lacks the agility and connectivity of contemporary digital solutions.
Maintaining regulatory compliance is challenging for oil and gas businesses due to locational changes and changing regulatory requirements. Constant regulatory changes and uncertainty surrounding locations make it difficult for oil and gas companies to swiftly adapt and execute fresh strategies on long-term investments and daily field operations.
Digital transformation will yield the desired results only when people are well-trained and upskilled to use it properly—different departments in the oil and gas industry call for varied program training programs. For example, field supervisors, offshore crews, and engineers need different training programs that meet their usage requirements.
With a new-age digital transformation application like FieldEquip, oil and gas companies can help customers and employees smoothly adopt new technologies, streamline workflows, and achieve increased efficiency and productivity.
Poor communication adversely affects engagement with clients, vendors, and suppliers. Not only that, the lack of timely communication between backend office staff, managers, and field technicians results in a lack of clarity and misunderstanding, which hampers operational efficiency, and employee productivity, and dents business image and credibility.
[ Also Read: What is the Scope of Asset Management in the Oil and Gas Industry]
Automation and implementation of cutting-edge technology solutions offer accurate real-time analytical insights, which help companies to make timely decisions.
Using real-time visibility into their operations, companies can monitor key performance indicators (KPIs) to make improved decisions about resource utilization, equipment maintenance, and production process planning.
Artificial Intelligence (AI) and Machine Learning (ML) play an important role in enhancing workplace safety and operational efficiency as manual errors and equipment downtime are minimized to a great extent.
Predictive and preventive maintenance programs can help oil and gas companies avoid safety incidents before they occur. The use of robots and drones is already helping businesses achieve enhanced workplace safety by automating tasks in dangerous environments.
Poor resource utilization, error-prone manual processes, sudden equipment failure, and unplanned downtime often lead to excessive overhead costs for companies in the oil and gas industry.
The use of digital tools helps businesses to track and monitor both equipment and employee performance, hence leading to proper resource allocation and planned equipment maintenance programs, which further helps in keeping repair costs low and ensure optimal uptime.
Oil and Gas companies manage a huge amount of data. Different departments within a company store and organize data, which often leads to the creation of data silos. A comprehensive digital transformation breaks down data silos through an open API and seamless integration with any backend or cloud application.
Powerful and easy-to-use digital field management solutions such as FieldEquip offer two-way integration with major enterprise systems (like SAP, INFOR, Microsoft Dynamics, QuickBooks, and more). Flexible integrations facilitate free information exchange between various departments and give them a 360-degree view of their operations.
[ Also Read: Equipment Preventive Maintenance Software: Why It’s Essential For Operational Efficiency ]
While Oil and Gas companies have incorporated various digital solutions to their advantage, many areas still remain untapped. In this dynamic and volatile market environment, Oil and Gas companies need to be on their toes to survive and thrive.
Embracing digital transformation is the need of the hour as more and more businesses continue to implement next-gen digital solutions to work processes.
FieldEquip, with its suite of cutting-edge features and ease of usage, promises to be a gamechanger for oil and gas businesses. With more than 10 years of experience in developing on-demand digital solutions for labor intensive, equipment rental and asset centric field operations, our team can design solutions befitting your business needs.
Whether it’s configurable workflows, preventive and predictive maintenance, field ticketing, data integration, or parts inventory management, we have skills, expertise, and experience to develop digital solutions that deliver desired results for your oil and gas business.
Get in touch with our expert team to digitally transform your business operations without compromising integrity and security.
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