Part II - Posts from the other side of digital transformation
In my second ‘Real World’ post, I argue that shortcuts to digital transformation are doomed to fail, and that includes off-the-shelf technology.
As always, all opinions are welcome.
All digital transformation is driven by data insight. So why choose off-the-shelf technology when it can’t deliver the insights that will transform your business?
Insights don’t come off-the-shelf
Most oil and gas operators have realised that digital transformation is the best way to deliver innovation and a steady ROI in the face of volatile oil prices. The coronavirus crisis has also highlighted the need to manage assets independently, with fewer people on site. As a result, many operators have devised modernisation and transformation (M&T) strategies. But hesitation still abounds. The fear is that new technologies will be unreliable, unsafe, ineffective or difficult to scale up. We’ve all heard about ambitious M&T projects that turned into expensive debacles.
Getting it right
Most of us would agree that the cost of inaction is a lot higher than the cost of taking action. We need to take risk into account without being intimidated by it. Digital transformation should, therefore, proceed in a cautious and fully customised fashion.
The bare minimum
Off-the-shelf digital technology can appear a straightforward answer to the challenges of M&T, partly because it avoids having to work closely with a technology company. Operators are familiar with off-the-shelf, which lessens their anxiety.
But when your shareholders demand an M&T strategy, they expect transformational results. Realistically, off-the-shelf software isn’t going to do that. It might do away with paper processes and put your data into some kind of order. But that’s not genuine innovation; it’s the bare minimum.
Collective intelligence
To genuinely transform your business, you need to turn that digitised data into insight. Insight is what makes sense of your data in a way that is useful to people. Delivering insight requires what I call collective intelligence software.
Collective intelligence is the extra problem-solving power that comes from people working together instead of in isolation. When teams embrace a new collaborative way of working, data insights boost their collective intelligence to a higher level. (Building staff confidence in new technology is something I discuss in my previous post)
We tested this approach at the Karratha Gas Plant in Western Australia, starting with corrosion inspection and refurbishment. Different teams were combined into a single collaborative unit and given access to Woodside’s data lake on a 3D model. The teams involved had to step outside their comfort zones, collaborate with people from different disciplines, and explore better ways of doing things using live data. But the results were truly impressive: schedule and engineering hours were reduced by over 60% and 75% respectively.
Customised technology
The experience at Karratha reinforced my belief that working closely with a collective intelligence technology company is the only way to ensure that your strategy, data scientists and operations people are fully aligned with your objectives.
Off-the-shelf technology has its uses, but it’s not going to turn your M&T ambitions into operational reality like a customised technology solution can. Here’s why:
Taking back control
Many operators have been slow to take back control of their valuable processes from external contractors, which is a major roadblock to M&T. Off-the-shelf technology provides another excuse not to embark on a full-blooded programme of digitalisation because it doesn’t require you to own your process. A collective intelligence solution, on the other hand, does require ownership of data and process.
Taking this step will catalyse your M&T strategy and drive it forwards.
Understanding the real problem
Off-the-shelf software often results in an impractical tool that is a poor match for the problem in hand. That’s because every asset is different, while an off-the-shelf product is standardised. Collective intelligence solutions, on the other hand, are designed in consultation with the team who will be using it. This means that each operator’s problems are fully understood and addressed in a bespoke fashion.
Lean and agile
Off-the-shelf technology is usually designed to fix one particular problem. So when a different category of problem crops up, you’ll probably have to buy another. Juggling a bunch of different off-the-shelf technologies on the same asset is a recipe for chaos: interface headaches and information silos do not make for an effective M&T strategy.
My main point here is that off-the-shelf can’t transform your entire business from the core. Only a technology that is designed to accommodate any kind of process or problem can sit at the heart of your asset. Operators keep telling me that they want data connected to workflows as a way of empowering teams and creating a ‘connected worker’. Off-the-shelf can’t do that.
The lean and agile capabilities of collective intelligence software equip it to manage your asset through every stage of its lifecycle. This is what makes it a sound investment over the longer term.
Continuous improvement
Because the collective intelligence approach involves working closely with a technology partner, you will get their data scientists embedded in your teams, providing constant support (it’s even better if you have your own data scientists). This ensures that the software is able to continuously improve over time, and adapt in a flexible way when your objectives shift. It also captures lessons learned. With off-the-shelf, you’re basically on your own.
Validation
Before launching an M&T strategy, most of us need to convince shareholders that the plan is going to work. Shareholders have to believe in your ability to deliver, which requires validation and a library of compelling evidence. A collective intelligence company will help you optimise the software, iron out problems, and capture the results.
By getting everything right at the pilot stage, scaling out is likely to run a whole lot smoother, and your objectives will be reached sooner. Off-the-shelf doesn’t include anything like that level of specialist support and collaboration. Modernisation and transformation isn’t easy. Do you really want to tackle it alone?
Conclusion
Modern asset management technology is often described as a digital twin because it includes a 3D digital replica of your asset. But unless that 3D model is overlaid with live actionable data insights, it can’t really add much value. For that reason alone, off-the-shelf technology can never deliver the M&T objectives that your shareholders demand.