There is no need to drastically scale back all your plans for oil and gas business software integration at once. Those pitfalls are not so scary when you know them in detail and have an experienced consulting partner who can help develop a strategy to avoid them. Forewarned, forearmed, right? So, let’s explore the top three roadblocks of digitalization in oil and gas and how you can deal with them seamlessly.
Digitalization without caution—a business risk of the oil and gas industry
It is important to understand how oil and gas business solutions will impact your revenue. However, the digitalization of the oil and gas industry encompasses more than just this aspect. The question remains: why do energy firms continue to face challenges in achieving positive outcomes on their digital transformation journey?
#1 Workforce resistance and the lack of tech skills
Digital oil and gas business solutions are cutting edge and designed with the future in mind. Yet, our industry’s manual-focused culture and workplace practices of oil and gas field services companies are mostly archaic. Meanwhile, the smooth adoption of modern software by employees is crucial. But do they have enough tech skills and the willingness to go the extra mile? Changes are hard, and not everybody will be ready to embrace them with open arms.
Support in the form of modern work practices, optimized human resources, and an efficient workforce learning curve is always required. So, you should focus on attracting more digitally savvy talent to your company and promoting an agile, ambitious mindset among corporate leaders to reap the real benefits of digitalization in oil and gas. For instance, consider replacing good old paper reports and manual analytics with on-demand data management and document digitalization platforms. It will save you a lot of effort and money while accelerating time to market.
A few tips to overcome the resistance challenge:
Share a common, organization-wide vision with your colleagues and stakeholders to show that you are ready to provide any guidance needed during digital office implementation.
Set up a change management team that will cultivate a digital culture among your workforce to help them prepare for a fundamental shift and systemic changes in operations.
Launch upskilling courses and knowledge transfer sessions to tame the fear of change and reluctance. External CoE and IT consultants are a great option to achieve satisfactory results faster.
Seek easy-to-use solutions for your team with short-term training, even for non-tech-savvy workers. Hire or assign digital talents to help those who find it difficult to keep up.
Create a backup plan to overcome connectivity issues, power outages, or accidental data loss. Disaster Recovery as a Service can help protect your production from force majeure.
Adopt an agile culture that promotes proactive knowledge-sharing, collaboration, and flexible thinking.
One person cannot do it all because digitalization in oil and gas is about synchronized teamwork. You are in this together with your staff—a successful digitalization leader always serves as a good communication mediator. So, there should be a mutual understanding, characterized by a spirit of give-and-take.
#2 Cybersecurity concerns
We have experienced enough cyberattacks on oil and gas companies recently, haven’t we? Moreover, the Russia-Ukraine war caused a spike in attempts to blackmail energy and utility suppliers. The first was U.S. Colonial Pipeline, then, not to be outdone, German Oil tanking, Belgian SEA-Invest, and Dutch Evos were disrupted by cyber criminals in 2022. Following these events, 18 major international oil and gas companies acknowledged the threat and pledged to improve cyber resilience at the World Economic Forum Annual Meeting.
So, how can you do the same and protect your data when implementing oil and gas business solutions?
A few tips to avoid the cybersecurity pitfall:
When selecting a digital platform, decide where you would like to store your files—on premises or on cloud—and outline a scope of security measures needed in each case.
Double-check the cybersecurity practices and standards a provider applies in their company and in a software product. Perform due diligence and test a product before adopting it across your enterprise.
Safety features should include custom security settings, e-signatures, all-around encryption, multi-factor authentication, role-based access levels, strong passwords, network firewalls, and more.
Investigate physical on-premise security protocols if a vendor stores data for you. Who has access to data centers, and how do they identify eligible employees? Are there policies for regular security audits? Do they monitor their facilities 24/7?
Clarify whether a vendor has a backup policy to prevent data loss in case of emergency. If you are going to store data on your servers, continue to ensure that you can always restore it from backups.
Can your company eliminate the possibility of being hacked 100%? No, and we won’t deny it. But all in all, reputable document digitalization service companies, for instance, always follow the latest security protection practices. In fact, papers are at an even higher risk of being stolen.
#3 Digital scalability
Overall agility and scalability are essential for your business’s resilience and growth. But when it comes to a transformation journey, as your operating capacity expands, so must your digital platforms. Digitalization of the oil and gas industry is a continuous adventure, a marathon. Meanwhile, business owners make the same mistake—they stop caring about scalability as soon as the software is up and running
A few tips to avoid the scalability pitfall:
If your oil and gas business development department does not intend to grow significantly in a particular direction, there is no need to implement some feature-heavy software product. It is better to purchase extended functionality that you will use daily without overpaying for what you don’t need.
If you seek future expansion, select a software with an easily scalable tech stack suited for the long ride (e.g., supported programming languages, frequent updates, agile development approach).
Choose systems with customizable settings and assess whether they can easily integrate with your legacy applications. Make sure the selected platform can keep up with your data processing goals in the future.
Check what a vendor offers in terms of concurrent users, server and database capabilities, storing capacity, API performance stats, and other parameters.
Technology quickly phases in and out, so keep track of how your platform performs on a bigger scale. Monitor whether developers keep supporting and improving it and watch out for the tech stack becoming outdated.
Ensuring that your digital office has no limits in flexibility to scale up or down will guarantee that all your operations run smoothly. Plus, higher scalability reduces the likelihood of software or hardware crashing at the worst possible time.
Prepare your company for digital oil and gas business solutions
Excited about the bright, fruitful future promised by digitalization in oil and gas? We admit that such enthusiasm is critical but can certainly cloud your judgment regarding what’s at stake. As a result, 70% of digital transformations (DT) fail. Of course, you do not want to add to this number. There is much work to do to achieve success, but it all starts with you as a leader.
That is why we have reviewed the most common pitfalls of digitalization in oil and gas that you should keep in mind. However, there are many other aspects to consider if you want to avoid the considerable business risk of the oil and gas industry rejecting your digital transformation. So, we advise doing a thorough SWOT analysis and engaging a reliable tech partner that will help you discover hidden roadblocks you might not know about.