Digital tech impact on the balance sheet

Most of my discussions with National and International Oil Companies brought a lot of energy around Digital initiatives in the O&G sector ranging from, we want to get into the Digital O&G space and are actively working on this to those who claim that they are already in this space.

We knew from our experience working with a number of Oil & Gas clients across the globe in the digital space, that there are a few things one needs to get right in the first place to realise the digital dreams.

My digital discussions with oil companies always ended up on a few select questions, which are closer to my heart. I always asked them, do you really know what and how to execute digital strategy and how much economic benefits are brought (or could be realised) into the balance sheet utilising these state of the art digital technologies?. 

Well, most of the leaders do not have a number to quote on the impact to their bottom line but could clearly articulate the dollars spent on the digital initiatives. In the process OPEX and Capex budget added a few more million dollars to the expense statement. 

Digital Oil & Gas is the talk of the town!.

Every leader wants to get into the band wagon. In all honesty, they allocate a huge budget, recruit people in place right from the Chief Digital officer to Data Scientist, Data Engineers, Cloud architect, Full stack developers and many more to cover a wide spectrum of Digital arsenals. 

Leaders pledged going digital is a primary goal for the business, articulated their vision, led town hall sessions highlighting the importance of going digital and how this could transform the business future. They also put in place a digital leadership team to manage the change and adopt digital technologies in their work. In the process, they also signed agreements with major digital companies for licensing and maintenance contract agreements worth millions of dollars, ensured photo shoot and press coverage on the new initiatives, and published a few articles in the company journal and websites to give visibility.

After all these efforts, still the answer to the original query is elusive. Can you show in the balance sheet how much benefits are accrued and how resources that were spent made a difference? The reality is most do not have an answer on what benefits could accrue and what these tools are addressing.

At this point, digital initiative is already a couple of years old, some of them are looking for the next challenge, ... its time to move to the next!

Well, don't get me wrong, I am for digital technologies in delivering productivity, efficiency and much more, while ensuring the organisations get the bang for the buck spent to enhance business profitability. 

I believe, all the Digital tools, technologies and the initiatives deployed must deliver value which should be visible in the balance sheet. These initiatives must clearly articulate what pain points and performance gaps to potential are being addressed, how these digital technologies could deliver improvements to the EBITDA.

Obviously, this is quite a niche area, there are plenty of O&G experts, but they do not have the digital expertise to combine both the worlds to deliver on the opportunity and vice versa for digital experts.

To execute this strategy, we need digital O&G companies who have the deep expertise in O&G to diagnose the opportunity as well as the expertise on the digital side to successfully convert the oil story into a digital story in realising the benefits. 

Sound interesting? Do you need someone who could help you to realise your digital dreams with their global execution experience, niche expertise covering both the Oil & Gas domain and Digital technologies? Talk to us at Chaks@arciselements.com