Traditional industries such as Oil and Gas have been the ones to be most severely impacted due to the COVID-19 pandemic. According to Fortune magazine, the oil and gas industry has lost more than 100,000 jobs this year. The oil, natural gas, and chemicals industry in the U.S. eliminated 107,000 jobs between March and August of this year, according to a report released by Deloitte on the future of work in the sector.
Asia, which has been the growth driver for Hydrocarbon demand for the rest of the world, is also seeing a decline. All this shows that demand destruction across various geographies has set back O&G to an unprecedented extent.
However, with the subsequent easing of lockdowns in numerous countries and road and air transport beginning to open up slowly and steadily, there will eventually begin, a balancing out in the supply and demand cycle. But what does this mean for business continuity in an industry that has been the worst hit in recent memory?
The Role of DX in sustainability and agility
Digitization and solutions in the Industry 4.0 subset offer oil and gas companies an opportunity to eliminate manual processes, streamline operations, and attain overall operational excellence, which translates to substantial cost savings impacting the bottom line. Yet, a large percentage of Oil & Gas players still rely on legacy systems to improve their business agility.
Leaders in the sector find it hard to keep pace with technology innovations even though demonstrable success models exist. However, with the industry now actively embracing the digital transition and moving to new grounds to sustain itself, business continuity amidst the current downturn has a pivotal role.
In order to remain competitive during the pandemic-driven downturn, oil and gas companies have to quickly embrace digital transformation technologies that can deliver a broad, rapid impact on their bottom line. The key is to invest mindfully in agile software with a market-proven approach that can drive immediate business impacts and be adapted seamlessly within the organizational workforce.
Industry 4.0 – Mandate vs. Choice
Industry 4.0 essentially comprises connected technologies, machines, and frameworks to drive deep insights across their production processes, networks, and manufacturing supply chains. And at the heart of it, for the O&G sector, Digital Twin, AI & Machine Learning, drilled down actionable data and IIoT form the crux.
For traditional industries, these terms might seem daunting from an adaptability and value perspective. The key is to show usability in industry-specific processes and ease workforce adaptability when it comes to new technologies. Solutions like the MODS software stack, rooted in real industry experience, help different size organizations. Owner Operators and EPCs understand those pain points that can be eliminated through disruptive technologies that are practical and show measurable value, and help define a DX strategy in the short as well as in the long term.
Getting the most out of dark data
Typically, especially in the O&G sector, companies generate tremendous amounts of data throughout the process of oil and gas exploration, development, and production. Currently, much of that data resides in digital silos or are still paper-based. Multiple business units and numerous teams all along the oil and gas value chain are creating and leveraging data in isolation. The end result is a manual effort driven process to find and understand data. And with the complexity of Oil & Gas operations, even small errors and inefficiencies cost millions of dollars and cause months of delays.
Moreover, industrial construction professionals in charge of managing complex project lifecycles are often forced to use different siloed software to manage project stages - engineering, procurement, manufacturing & fabrication, planning, cost control, construction, installation, and commissioning.
Once again, industry-focused solutions such as MODS project management software Origin unites these phases as an integrated process, pulling data on real-time activities directly between the modules. This gives complete control and visibility, enabling control over time, resources, cost, and risk. A solution built around Greenfield project management principles rather than repetitive processes is imperative to business success and agility.
So, effectively integrating and deploying digital technology across oil and gas has the potential to reduce costs and drive efficiencies, both critical to navigating both the immediate effects of the COVID-19 crisis and the long-term implications of the energy transition.
It’s clear that rapidly evolving digital technology offers a viable solution for Oil & Gas for business sustainability and operational ability. Embracing digitalization to recognize organizational goals is the optimum way to combat the current decline in an uncharted future.
To know more about how MODS can help organizations cope with the rapidly changing business landscape, feel free to contact us.