Digital Transformation Trends in the Oil and Gas Industry for 2022
The last couple of years have been difficult for most industries and so too for the oil and gas sector. Changes in work models with COVID-19 restrictions, fluctuating oil prices, and new regulations such as tighter green energy norms have all impacted the oil and gas industry. As a result, the industry is striving hard to improve operating practices, adopt modern business models, and speed up digital transformation initiatives, aiming for improved productivity, increased efficiency, and higher profitability.
Disruptive changes in the oil and gas industry and the story of digital transformation
The oil and gas industry is far behind other industries in being digitally enabled. The stereotypical image of an oil drilling rig (perpetuated by popular movies!) is a harsh environment with grubby engineers hauling equipment and braving severe weather conditions to manually check, monitor, or fix drilling equipment.
But as we speak, this image of the oil and gas industry is changing. Oil companies are moving toward digitization and automation at a rapid pace. Equipment monitoring is becoming proactive instead of reactive (for example, taking up maintenance before rather than after breakdowns.) Companies are investing in technology platforms, making decisions based on data, and creating a modern digital workplace geared toward a positive employee experience. After all, with newer green energy companies vying for human resources, the old oil and gas sector must do all it can to retain and retrain top talent.
When we talk about digital transformation in the oil and gas industry, most people identify it with the solutions provided by Industry 4.0. Referred to as the Fourth Industrial Revolution, Industry 4.0 encompasses automation and data exchange in manufacturing technologies, including cloud computing, the Internet of things (IoT), big data, augmented reality, and cyber security.
Digital transformation is no longer a progressive choice that oil companies can make: It's now essential for survival. It impacts their ability to respond to supply chain disruptions, time to market pressures, and changing customer expectations.
Digital transformation trends in the oil and gas industry in 2022
Let's look at some trends in the digitization of oil and gas companies that we are likely to see in 2022:
#1 Increased investment into digital transformation to produce cost savings
According to PwC, the use of digital technologies in the upstream sector could cut production costs by up to 20% and result in cumulative savings of US$100 billion to $1 trillion in CAPEX and OPEX by 2025. There is significant potential for cost savings with more efficient maintenance and optimal utilization of assets, supply chain optimization, and AI and integrated technology platforms.
For example, BP has deployed a digital workforce and organized digital boot camps for awareness among executives. They have encouraged the development of in-house apps stored on common platforms to improve workflow processes. They have also developed storage for billions of data records for their engineers to access and use to improve process efficiencies.
Digital solutions need to address the complete ecosystem of operations, i.e., internal and external partners, including suppliers and customers.
Real transformation will occur when operational engineering and IT teams work collaboratively to create digital solutions driven by business needs.
RDS offers powerful technologies that put oil companies firmly on the path to digitization. OpenText AppEnhancer, our enterprise content management system, captures, indexes, stores, retrieves and manages all business documents. It can provide real-time access using any device, connecting employees, clients, and partners with content they need in any process. Its collaborative features ensure that employees in remote, offshore locations and distributed workforces can access all business data in real-time to produce efficiencies cost-effectively.
OpenText OTS, our lightning-fast processing engine, transforms high volumes of legacy oil records from traditional print streams to various output formats, including PDF, PDF/A, Accessible PDF (PDF/UA), and more. It reduces inefficiencies associated with manual document transformation, speeds up processing time, and reduces costs of document transformation.
#2 Tech that increases productivity
2022 will be a year to work smarter, enhance productivity and clear out any technical debt you have accumulated over the slump of the last 24 months. Companies will concentrate on building web apps for productivity dashboards for data-based decision-making and adopt technology platforms that integrate business information across systems and enable teams to work collaboratively to increase project visibility and reduce meeting times.
RDS offers OpenText AppWorks, a low-code development platform that helps IT teams work with business teams so that requirements are correctly translated into rich functionality in the apps they build. In addition, its powerful workflow engine defines business processes and creates flexible workflows.
#3 Focus on improvements to processes for asset management
Oil and gas companies incur their highest expenditure on maintaining assets. In 2022, companies will look for more efficient ways to manage assets and predictive capabilities for eliminating equipment downtime. More companies will try to leverage automation to produce cost savings, work efficiencies and enhance safety and compliance levels (e.g., in maintenance and supply chain processes.)
RDS supports business analytics with Intelligent Capture - a digital solution that automatically extracts data in near real-time from unstructured and structured sources and translates it into actionable insights to support asset management processes and operational decision-making.
#4 Pivot toward greener solutions
There has been speculation that with oil prices recovering significantly from the all-time lows we experienced in the last few years, the transition to green energy may slow down.
In Deloitte's 2022 Oil & Gas Industry Outlook report, 76% of surveyed oil and gas executives stated that strong oil prices would most likely boost or complement their energy transition in the near term. The fastest way oil and gas can tackle their carbon footprint is to go digital - using data gathering methods alongside analytics tools to optimize plant operations, track carbon emissions, and streamline work processes. Digital transformation will increasingly be the path forward rather than retrofitting equipment on secondary and tertiary assets to comply with decarbonization mandates.
#5 Investments into AI and cloud
According to Gartner, increased investments into artificial intelligence (AI), machine learning (ML), distributed cloud and cyber security are the leading technologies many organizations plan to deploy in 2022. In a survey by Gartner, 51% of the respondents said they had planned investments in business intelligence. Gartner forecasts end-user spending on public cloud services to grow over 2021 and reach $482 billion in 2022. Gartner also predicts that by 2026 public cloud spending will exceed 45% of all enterprise IT spending, up from less than 17% in 2021.
RDS: Striving for digital transformation in the oil and gas industry
At RDS, we work with oil and gas companies to define their digital strategy, starting with digitizing legacy records using our document scanning and digital mailroom services.
We help them transform their content and document management processes with our cloud-based enterprise content management systems and move toward digital maturity.
Are you looking for transformative oil and gas solutions in 2022?
Digitize all your day-to-day paper documents and project-centric, legacy records to optimize your assets and offshore and onshore operations.
Talk to our business process automation experts to build smooth transition plans for all your data and documents to support your digital transformation initiative.
Contact RDS today for a consultation with our digital transformation experts.