90% of oil and gas leaders say digitalisation is key to operational excellence: Sphera survey
The company found that while industry leaders see the importance of integrating digital transformation for operational excellence, challenges persist in the path to the digital oilfield
Sphera released the results of its operational excellence index, which found that industry leaders see digital transformation as a tool to achieve operational excellence, but also see challenges in terms of integrating it into their operations.
90% of industry leaders surveyed by Sphera agree digital transformation will accelerate their ability to achieve operational excellence as a sustainable way of doing business. In 2017, only 73% reported the same. Meanwhile, 73% said that operational excellence was the key objective of their digital transformation plans. 55% noted that they aim to reduce operational risk, and 55% listed improved asset availability and uptime as a key focus.
"Looking at the way technology is leveraged today; 58% say it delivers key performance indicators (KPIs) and metrics that reflect the operational reality," the survey noted. "A further 45% say it improves prioritisation and planning, while 44% say it delivers predictive analytics that keep assets up and running."
Looking ahead, 75% of respondents said that digital technology would "create new, insight-driven business processes across various functions." This was most apparent in three technologies, with 70% citing digital twins as a key technology to simulate scenarios for planning and decision-making; 69% noting that connecting disparate data and siloed systems to create "actionable insights"; and 65% said analytics would help them "better understand where to make operational improvements."
While there appears to be a significant understanding of the importance of digital transformation for operational excellence, obtacles persist: 53% said that their company "is still trying to figure out what digital transformation means to them."
"This is perhaps to be expected when digitalisation and digital transformation can be interpreted in different ways," Sphera writes in its report. "There can be a disparity of perspectives within an organization as to what its digital ambitions are – or should be. For some, digitalisation involves tweaking at the edges and automating standard, paper-based processes (the paper-on-glass approach). For others, it’s a far more disruptive force that will impact the entire business and operating model. For many, it is something in between."
Without establishing what digital transformation means to an organisation, or how it can be leveraged to yield results, very few will see the impact of digitalisation. The survey found that only 7% of respondents were securing sustained return on investment from their digital transformation projects.
Corporate culture, budget and lack of digital expertise were cited as the top three obstacles to advancing digital transformation. "There is something of a vicious circle at play here," Sphera wrote in the report. "Without digital expertise, for example, the culture is unlikely to change. Survey respondents believe stakeholders, across the board, need to get involved in digital transformation [...] But without a changing culture, digital expertise is unlikely to be hired or new budget allocated."
Sphera asserts that this "points to the absolute necessity of effective leadership as the cornerstone of digital transformation projects."
Two key issues that surfaced through the survey was a lack of integration across units of the company, creating siloes of information and function. The second issue is the approach to technology; 82% of respondents said that oil and gas players rely on legacy systems to improve business agility.