Low Digital Maturity, High Risk-Aversion
As we stated earlier, Oil and Gas has the lowest digital maturity score in Deloitte's study, lagging behind Power and Utilities, Asset Management and Life Sciences. In its simplest sense, digital maturity measures the benefit that an industry is reaping from its digital transformation efforts, and a low score points towards leadership not having digital in its priorities, and not believing in the potential of growth through digital evolution.
Risk-aversion is a natural trait of Oil and Gas leaders, for a number of reasons: the heavy capital invested in the facilities, the many national and international regulations that apply to this industry, and even the fact that leadership tend to have long careers in which prudence and adherence to tradition are highly valued.
If leadership is not onboard, is tepid about digital transformation, or is resistant to change, then the whole endeavor is compromised.
Geography and Complexity of Operations
Oil and Gas companies carry out business literally all over the world, in all sorts of extreme geographical and weather conditions. This complicates the deployment of technology such as sensors, which must be proven to resist extreme temperatures, pressure, etc as well as be shipped and installed in hundreds or thousands of locations all over the world. The logistic complexity is undeniable — but so are the benefits.
Additionally, there is a human side of the digital transformation: persuading team members and management to get onboard is significantly more difficult if not done in person, and training across countries and time zones has its own set of complications.
The Engineer Mindset
While those in a digital frame of mind — AVIO among them — live by the motto "fail fast", the Oil and Gas industry is run by engineers. McKinsey describes this mindset as "above of large, comprehensive projects, a premium on finding the perfect solution upfront, detailed planning to the highest degree, and a preference for rigorous analysis and process over fast judgments and flexibility." It's easy to foresee resistance to an agile, flexible, "let's see if this works and pivot if it doesn't" approach from leaders who want perfection, safety, and predictability above all.
Cybersecurity
According to the survey, cybersecurity was the number one investment focus in 2019, with a 61% of reported investment going into it (a 49% increase from 2017) It makes perfect sense if you consider the intense scrutiny and regulations the industry has to go through, the magnitude of the fallout if there is an accident of failure, as well as the risk-averse nature of management we outlined above.
Cloud Migration
The very global nature of Oil and Gas operations makes Cloud Migration a natural choice for managing many flows of information coming from all over the world, and making information readily available to anyone regardless to anyone of their location or time zone. It also makes software deployments, upgrades and general communications easier and more efficient.
The Internet of Things (IoT)
The Internet of Things (IoT) concept is not new: an environment where the sensors can easily function and interact with every other element in the system. The Industrial Internet of Things is specially designed to withstand the heavy use and hard conditions of an industrial setting, and can both capture and analyze valuable data that can be used to enhance decision making even at the same time and money, as in the Mediterranean case study mentioned above. Real-time monitoring can lead to reduced maintenance and repair costs, less downtime, and greater security, as well as illuminating leaders with information they had not previously been exposed to.
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