It is hard to imagine how the oil and gas industry operates with all its complex, critical processes involved. And it’s even harder to think of all the challenges it faces in the modern, ever-changing world. The oil and gas sector is experiencing major shifts and transformations, and it’s all because of digitization.
Why digitization matters to oil and gas?
The Internet of Things (IoT), artificial intelligence, blockchain, and big data are all terms that are prevalent among many industries, and the energy industry is no exception. More and more companies are seeking innovative, data-driven solutions for production efficiency and workforce stimulation. Technology today is the main efficiency booster in oil and gas, which can reduce costs and escalate decision making. Although it is not clear enough for some businesses how exactly digitization transforms into financial profit, the right application of technology can take the company’s performance to an entirely new level.
How digitization benefits oil and gas companies?
Digitization opens a vast variety of benefits for oil and gas companies.
Improving the performance of oil and gas assets and equipment. With the help of connected devices like IoT (Internet of Things), remote condition monitoring of well-site equipment is possible. Sensor technology lets companies track and gather data about equipment usage and maintenance. This data analysis, consequently, gives the potential to define waste operations and optimize production. Reviewing equipment can also mitigate its failure, and therefore contribute to better safety and health conditions for site workers.
Faster decision making. The energy industry is very complex and requires useful, well-thought decisions to be made on a daily basis. In such a huge industry, it’s hard to make accurate predictions and choices. Big data analysis is believed to be a key solution for decision making in the oil and gas industry. The concept behind this technology is simply gathering large volumes of data, sorting it properly and making an advanced analysis. Conclusions give companies invaluable insights, lets experts make decent forecasts and defines gaps in business models.
Reducing costs. All the technologies mentioned above can significantly cut your operational costs. As the usage of IoT and big data lets companies detect gaps and anomalies in the production, the elimination or reformation of waste processes will lead to cost savings. Also, innovations bring improved efficiency, which results in more profit.
Attracting the workforce. Recruiting is one of the most underestimated benefits of digitization. Oil and gas companies constantly struggle to attract young, tech-savvy talents to the industry, and digitization is a very promising solution for the issue. The 2018 Global Energy Talent Index (GETI) report stated that opportunities for remote and flexible jobs are in-demand for young employees and 48 percent of respondents referred it as an attractive feature of job in the oil and gas sector. Apart from the flexibility and new workplaces, digitization can offer employees possibilities for growth and development.
Digitization is believed to transform the oil and gas industry in many ways. It can impact every stage of production, boost efficiency, reduce costs and make the sector more attractive for a young and talented workforce. Oil and gas companies should pay more attention to technology-enabled solutions in order to develop their brand image and improve performance.
It’s 2017, technology is practically everywhere and everyone is digitally connected. Most businesses have adapted to the changes in tech, yet some are still behind.
That’s not necessarily a bad thing! Every business works how they know best and to the best of their means. Digital supply chain is the optimal solution for businesses looking to obtain a game-changing benefit.
Based upon a SCM World study, 77% of companies in early stages of B2B integration processed less than 50% of their transactions digitally.That means there is a remaining 50% or more companies that are currently using traditional methods to exchange information (i.e. email, fax, and phone) instead of utilizing automation. That separation of formats creates a barrier between two parties which will lower total returns and affect projected goals.
So how does a large, digital business connect with a smaller business that is using traditional methods? Well, it’s easier than you think
Utilizing electronic data exchange (EDI) or extended markup language (XML) will yield the highest results by generating and receiving digital transactions between trading partners.
What is EDI? EDI is the computer-computer exchange of business documents in a standard electronic format, typically between business partners. EDI allows the ability to create an automated document process which will save time and money.
It will also improve processing speed, reduce the number of errors, and aid the relationship between partners.
Now, not all business partners have the means to utilize EDI. It may be the case of their IT department not being large enough to manage EDI, or it may be that they don’t have an IT department.
The cost and usage time of using EDI up may be too great if their larger trading partners don’t transact as frequently with them. Nevertheless, if you have a non-EDI partner, there are still options you can use to make digital transactions work effectively.
Web Apps. Web apps are very common in today’s solutions, they allow easy access from any computer your partner may use while providing a simple solution to digitization. Web apps can provide common data entry and the ability to review transaction history. The data entry becomes a digital transaction which can be processed automatically and converted to EDI to be processed like other digital transactions. Web apps can reduce errors and provide feedback based uon executed business rules.
Web Forms. Web forms are useful for creating data entry when filling out specific documents. They are simple to setup and help by automating the processing. Just like a web app, a web form can be converted into EDI and processed. There are some drawbacks in that there is no feedback given to the user (which a web app can provide).
Fax & PDF to EDI. Both Fax and PDF can be converted into EDI which would allow those small partners to continue their normal transaction methods. It would require you to scan the received documents and then convert them into EDI data for processing. This method should be reviewed by an individual to ensure the data is correct, we recommend indicating the required fields.
Spreadsheet to EDI. Using Microsoft Excel or a similar software is similar to a web form, it can check for user error and check the data field contents making sure they are filled out and complete. It’s a method that is simple to use as many businesses have access to Excel.
Once you have finalized your best form of data transaction with your trading partner, you can start enjoying the results. You will see:
Faster invoice time
More responsiveness to unforeseen events
Faster inventory turns
Reduction in cash to cash cycle time
Improvement in successful product launches
Improvement in perfect orders
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