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Digital transformation in oil & gas: Out with the old, in with the new

March 11, 2022

Digital transformation in the oil & gas industry can be a touchy subject.

LiquidFrameworks' Travis Parigi

Digital transformation in the oil & gas industry can be a touchy subject. Understandably, O&G companies have thrived, and millions have been made using rudimentary paper-based tools and processes to get the job done. However, as industry dynamics shift and a younger, technologically savvy workforce emerges, getting by with dated and inefficient technology is no longer an option. Utilizing Excel spreadsheets in day-to-day operations does not signify digitalization.

To compound matters, the O&G industry is experiencing enormous challenges due to increasing market pressures, efficiency demands, and the ever-increasing need to innovate. Let's face it—a slow pace to adopt new technologies is no longer an industry attitude; it's a barrier to bottom-line profitability.

The upside? Most of companies think they already have the skills needed to derive value from mobile and cloud investments. Moreover, the vast majority of those businesses say they have already adopted those technologies.

It needs to be emphasized that digital transformation should reach every part of O&G, whether an oil-field service or a production operation. The first step is investing in the tools and solutions needed to support workers in the field and bring needed change at the company level. Field-service-technology solutions help make processes more efficient and seamless, dodging bottlenecks in the quote-to-cash process.

Overall, the digital transformation market is expected to grow at an annual growth rate of $19.1% from 2021 to 2026, according to MarketsandMarkets. Still, O&G companies encounter inefficiencies and a lack of process management that affects energy service providers throughout their workflows. By combining multiple systems, such as ticketing and maintenance, into one platform, these companies can transform their operation and gain new efficiencies.

Here are some areas in which companies can better embrace digital transformation:

Maximizing equipment rentals: centralized data is essential when maximizing the equipment-rental process. Because there are so many elements and personas involved in the rental process, it is necessary to have every piece of data accessible to ensure a single source of truth for all assets. Field-operations technology creates a seamless experience from the warehouse to the field to the back office, enabling companies the flexibility to utilize the latest equipment and technology without becoming saddled with outdated assets.

Scheduling and dispatch: digitally transforming the scheduling and dispatch process is essential. The utilization of field-service technology enables companies to stay informed of all job-related data by tracking all resources in one place. With a record of personnel, equipment and materials, duplicate jobs or unavailable equipment are likely never to be dispatched again.

Companies can also keep track of employees' qualifications to know who meets necessary job requirements when scheduling and dispatching personnel. They can also track everything they need to know about serialized equipment, including movements, job history, inspection and maintenance records, and movements.

Invoicing: utilizing field service technology for invoicing gives oil and gas companies the ability to track payments and issue credit memos in addition to monitoring the customer's available credit, ultimately providing a 360-degree picture of a customer's account balance. It also completes the quote-to-cash process, ensuring a four-way match between the price book, quote, ticket and invoice. Invoices generated from ticket items can also be used to build reports using the data customers want to see. By enhancing their invoicing capabilities, O&G companies will reduce customer pushback while supporting the intricacies of each customer's invoicing requirements, lower billing errors and decrease time to payment.

Data collection: with workers in the oil & gas industry required to capture more data than ever before, new technology can make this process more efficient. Advanced logic can guide oil & gas workers on collecting data easily and accurately while also allowing workers to capture the data online or offline, erasing connectivity issues in the field. Management can then track current and historical data such as notes, past activity and requirements for these projects. Once collected, the data is used to create a proactive workflow that enables routine preventative and predictive maintenance as well as more reliable equipment. Improvements in data-collection also lead to more efficient compliance with industry regulations.

Equipment and asset maintenance: IoT and edge-computing devices allow O&G companies to collect asset data and track the condition of assets in the oil fields. These devices can remotely understand an asset's overall health. Through digitization, O&G companies can upgrade how they maintain assets, from proof of service to equipment history. Enterprise-asset management also allows O&G companies to improve asset uptime, lower labor costs and boost economic output.

Kicking digital transformation into gear

The O&G sector can move beyond antiquated thinking and manual process to embrace hands-on digital transformation from the warehouse to the field to the back office. Investments in field-service digitization and automation can lead to gains in productivity, upgrades in customer service and fewer customer complaints due to billing errors.

O&G businesses should feel confident that investing in digital transformation will bring ROI and continued cash flow as well as a reduction in inefficiencies, making them more effective overall. The key is to adopt fundamental hands-on digital transformation across an entire company to make real progress and drill down to success.

Travis Parigi is executive vice president of LiquidFrameworks, a ServiceMax company