Digital Oil and Gas: 5 Steps for Scaling Up From the Pilot Phase
Digital oil and gas is becoming a reality as leading players deploy digitization across the value chain to improve efficiencies, boost output, and cut costs. However as recent research indicates, few companies are scaling up digital transformation in ways that make measurable improvements to key performance indicators (KPIs) that CEOs and boards of directors care the most about. Even as oil and gas operators are realizing the potential of digital initiatives and projects, enterprise-wide transformation is stuck in the pipeline, so to speak. Taking a top-down, people-first approach to scaling up digital transformation offers the key to removing organizational barriers and unblocking the pipeline. Here are five key steps oil and gas execs can take when scaling up from the pilot phase to enterprise-wide success:
- Prioritize value creation
- Track and measure bankable impacts
- Promote enterprise-wide adoption of digital skills
- Adapt organizational incentive systems
- Ensure all new initiatives meet measurable business goals
Digital Oil and Gas: 5 Steps for Scaling Up from the Pilot Phase
McKinsey reports that 70% of organizations are not progressing beyond the pilot phase, even though digital projects are proving successful. Instead, cultural and/or organizational barriers are often blocking progress. This may occur when digital use cases don't solve fundamental business problems that impact bottom-line performance. Or, perhaps they are simply not tracking bankable bottom-line impacts. Not addressing critical KPIs may fail to capture management's interest, and ultimately, the resources for scaling up digital transformation projects beyond the pilot phase. Here are 5 key steps oil and gas execs can take to ensure leadership support for scaling up to enterprise-wide success:- Prioritize value creation - Relentlessly prioritize value creation as the primary goal because "digital oil and gas" ultimately means achieving profitability and sustainability through optimized value creation.
- Track and measure bankable impacts - Rigorously track the progress and measure bankable bottom-line impacts of projects against a current performance baseline, well-defined KPIs, and real-time data analysis/visualization tools.
- Promote enterprise-wide adoption of digital skills - Communicate the value creation potential of scaling up digital skills for everyone from C-suite execs to frontline personnel.
- Adapt your organization's incentive system - Creatively adapt organizational incentive systems to encourage greater interest in scaling up digital skills among the workforce. Foster a progressive culture with financial rewards and public celebrations of employee success.
- Ensure all new initiatives achieve measurable business goals - Develop and govern data management policies to ensure all new digital initiatives achieve data-driven results tied to measurable business goals.
