A New Reality for Oil & Gas: Complex Market Dynamics Create an Urgent Need to Transform Through Digital Technologies
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A study by Cisco Consulting Services examined how oil and gas companies can survive declining prices through digital transformation. The study included a global survey of industry professionals and interviews with experts. It found that connecting people, processes, data and things through the Internet of Everything could automate up to 50% of manual processes, reducing costs by 11% annually for large companies. However, most oil and gas firms have not aligned their information technology and operational technology strategies, which is key for digital transformation.
A New Reality for Oil & Gas: Complex Market Dynamics Create an Urgent Need to Transform Through Digital Technologies
- 2. Price declines of more than 50% since June 2014 have upended the oil and gas (O&G) sector. To help O&G firms survive and thrive, Cisco Consulting Services undertook a comprehensive global study, including: • Survey of 50 industry professionals across 14 countries. • Interviews with industry experts: • Graham Hill, Executive VP, Global Business Development & Strategy, KBR, Inc. • Chris Niven, Research Director, IDC Energy Insights • Kathy Bostjancic, Director, U.S. Macro Investor Services, Oxford Economics • Economic modeling of the costs and benefits of applying IoE-enabled technology. What did the study reveal?
- 3. Amid this turbulence, forward-looking firms see an opportunity to gain competitive advantage. How can they do it? By transforming through digital technologies powered by the Internet of Everything (IoE) – the networked connection of people, process, data, and things.
- 4. Through digital transformation, firms can reduce costs and improve efficiencies in a dramatic way. To transform, they need to adopt IoE throughout the value chain. This includes convergence of the information technology (IT) and operational technology (OT) areas of the business.
- 5. “For the first time, pressure is being brought to bear on organizations across the globe to reengineer the way they do things, and that requires a lot of thought. It requires the bringing together of technology and people.” Graham Hill, EVP, Global Business Development & Strategy, KBR, Inc.
- 6. To operate as efficiently as possible, oil and gas companies need to address the “data deluge”. O&G leaders named “data analytics for faster, better decision-making” as the number 1 driver for IoE investment.
- 7. O&G firms stand to gain business advantages. But only if they automate key business processes. More than half of respondents believe the IoE could automate from 25% to nearly 50% of manual processes.
- 8. O&G companies must transform the way they do business. In particular, they need to align and converge IT and OT. 59% of respondents do not believe that their firms’ IT and OT strategies are closely aligned.
- 9. O&G companies can capture their share of $600 billion of Value at Stake between 2016 and 2025 by transforming business processes through IoE. For a $50 billion firm, IoE can drive a bottom-line improvement 11% annually. If adopted by the industry as a whole, global GDP could increase by $816 billion by 2025.
- 10. How can you get started? • Build your digital foundation across data, people, and processes • Develop and attract the workforce of the future • Align and integrate IT and OT to improve business efficiency from the boardroom to the well • Ensure end-to-end cybersecurity • Innovate for growth
- 11. In partnership with other leading industry suppliers, we’re helping oil and gas companies transform through digital technologies. • ESSAR Group strengthened business performance through consistent access to real-time data. • Explorer Pipeline unified a distributed workforce and improved productivity. • Marathon Petroleum keeps people safe by reducing exposure to hazards through real time monitoring and threat detection.
- 13. Download the whitepaper to learn how O&G firms can capture their share of the Value at Stake Share this SlideShare