Push to digitalisation demands “top-down” support
The new reality of the oil and gas industry requires sweeping changes across the entire value chain. Digitalisation – one of the industry’s biggest buzzwords – can bring various benefits in day-to-day operations including cost reduction for oil & gas players. What can operators do to keep pace with the whirlwind speed of innovation? And what approach will help them stay ahead of the competition?
While the trend of introducing and implementing new digital technologies is only set to grow in the future, business leaders must ensure that employees are not left behind while the company looks toward innovation and smarter solutions.
Franz Kufner, Executive Vice President (APAC region) at Hexagon PPM, talks to Asian Downstream Insights about the challenges in implementing new technologies, and what business leaders can do to ease the organisation’s transition into a digital space.
The first step is the hardest
The first step is never easy. Oil & gas players have been operating in a certain way for decades, but the key questions remain – how do they sustain the business? How can they remain profitable while reducing emissions, becoming more green and bringing down the carbon footprint?
“This is exactly where digital transformation can help,” states Kufner. “People need to clearly understand why companies are doing this, and if companies are not doing this, there may be no jobs for them because the company isn’t going to be competitive enough, or can only survive so long because the environmental pressure on them will be so high that they have to do something – and if they don’t, they’re out of business.
At the end of the day, it’s the people and the adoption process that prove to be the biggest hurdle. From a business point of view, it needs to be supported from the top down, it needs to be supported 100% by the executive team, and everybody needs to understand that this is where the company wants to go, and is okay with it. That’s the number one priority.” asserts Kufner.
Upskilling your workforce
Retaining the right talented people and enhancing their skills can help them survive today’s challenges and drive a competitive advantage in the future. Workers often run the risk of feeling redundant with the implementation of digital solutions. It is up to business leaders to assure their workers about this, and give their workers adequate opportunities to develop.
“One can’t just expect somebody who has been trained for certain processes to be immediately replaced by a machine,” explains Kufner. “Change management will be required, which will need clear communication about why companies are doing what they are doing, before they can start training people.
Of course there will be resistance. People will ask, ‘why should I?’. People will begin to understand that there’s a benefit to them as well, and not just to the company or organisation,” explains Kufner.
“An interesting point that I’ve seen through my own experience is that there is a tipping point where people get used to it, and when that happens, they get more confident – and when they are faced with another change they are less resistant to it, because they know this will be something that benefits them as well.”
Surviving and thriving in a post-COVID world
In the short term, organisations will need to adopt digital technology much faster than they are doing today. This is inevitable, and they cannot get around it. Competitors are doing it, investors want to see it, so companies cannot avoid it.
“But if they want to do it, they need to do it in a very focused way, with clear business outcomes defined,” explains Kufner.
“In the long term, it’s about getting ready to execute plans for diversification. If you don’t, you’ll be left behind.”