In this special guest feature, Steve Cooper, Vice President of Data Management Solutions at Quorum Software, discusses the importance of data accuracy and measurement validity as these professionals are confronted with integrating the oilfield to the back office. Previously, Steve was the Vice President EnergyIQ by Quorum Software, a recognized leader in the oil & gas data management arena.
The energy sector is facing unprecedented challenges started by a rapid supply increase in early March and exacerbated by the almost overnight destruction of energy demand by the Covid-19 pandemic. While oil and gas and energy companies are familiar with managing volatility, a historic drop on April 20th, which occurred when crude oil was being traded in the negatives, signified a new era.
Since that infamous day, there has been a rebound in prices, but the majority of oil and gas producers are now faced with large debt, difficulties attracting external investment, and razor thin margins on existing operations. What’s more, they are trying to recover while largely still operating remotely, a phenomenon that has never been experienced in the industry at such a scale but is likely to become commonplace.
Looking to the future, companies have recognized the need to prioritize one thing above all: the accelerated adoption of digital technology. Over the past several years, data volume in the oil and gas industry has grown exponentially through the application of advanced technology. Faced with reduced headcount and the need to operate efficiently within cash flows. the next wave of innovation will focus on sophisticated data analytics and AI to drive workflow automation. This will require significant investment in streamlining data measurement and collection, storage, along with platforms for delivery, visualization and analysis.
Quorum sponsored our own research, polling 400+ IT decision makers (ITDMs) in other industries as well as oil and gas decision makers (O&GDMs), and found that while more than a third of O&GDMs polled say their industry lags others in technology, nearly all admit that companies that don’t embrace tech advances will not succeed. The following best practices were identified as important by O&GDMs to drive operational efficiency in the future.
Establish a Single Source of Trusted Data
IT leaders agree that having access to consistent, trusted data at all stages of the business lifecycle, across all platforms, is critically important. Within the oil and gas industry, it is even more imperative given the proliferation of different data silos within distinct functional units and limited common governance across them.
Establishing a strong foundation of master data management and business knowledge integration provides the platform for visualization, analytics and workflow automation. This enables experienced personnel to spend the majority of their time using the data rather than cleaning it up leading to innovative solutions to drive operational efficiency.
Invest in Analytics
The visualization and analysis of data has gained a significant amount of traction within the industry over the last few years. It is also clear that there are lots of opportunities for further investment and this is where, in particular, important lessons can be learned from other industries such as finance, transportation and health care. The primary benefits of this investment are being realized in the following areas:
- Optimizing operations: Data can improve understanding of field asset performance to find better ways of producing, processing or transporting oil, gas and byproducts.
- Reducing risk: Eliminating manual processes that block progress or create redundancies can save costs and reduce errors and lead to workflow automation.
- Predictive Failure: Being able to predict problems and address them before they occur has huge benefit in terms of cost reduction and reduction of health and safety issues.
Embrace the Cloud.
In today’s volatile energy industry, the need for cost-saving efficiencies and immediate access to information and insight has never been greater. Benefits of migrating to the cloud include:
- Lowering IT infrastructure costs: Companies that use cloud technology achieve workplace efficiencies and avoid interruption via faster deployment and easier ongoing support
- Scaling operations as needed: Because cloud applications share resources, scaling based on fluctuating market conditions is more economical and performant
- Breaking down operational silos: Cloud applications enable company-wide collaboration by providing cross-department access to centralized information to help users make informed decisions
- Future-proofing software investments: Cloud applications are easier to extend by adding new functionality and interoperating with additional resources
Companies in the oil and gas industry that will not just survive the current challenges but establish a platform for future growth are the ones that treat data as a critical asset. With a foundation of trusted data, they will be able to lower risk, make faster decisions, automate critical workflows and enable employees to focus on higher value work.
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