Radix article on the benefits of digital strategy featured in Hydrocarbon Processing Newspaper
Article by Technical Manager, Justin V. Conroy, published AFPM Annual Meeting
Does your company have a digital strategy?
By now, you have probably heard of topics such as, "Internet of Things," "Big Data," "Advanced analytics," or "Cybersecurity." New technologies, such as intelligent sensors, high-speed networks, cloud infrastructures and machine learning capabilities, are changing the way we do business. More and more information is moving more quickly through intelligent networks. Regardless of the source of technological improvements, these changes will add billions of dollars in value to global business in the firm of revenue increases, reduction of operational costs and/or new business models. Businesses and markets are now empowered to reconsider past solutions, revisit previously unsolved problems and consider new improvement opportunities that were previously unavailable.
What is a digital strategy?
Data converted into information that can be analyzed, visually represented and acted on can provide a significant competitive advantage. A digital strategy is the vision and roadmap to create wealth from that data/information asset, and it can decrease overall reaction time when a problem is identified or a question is asked. At its core, a digital strategy should be focused on the human-technology interface. Data that cannot be interpreted is largely useless. Once the base questions to any digital strategy are determined (“What do we want to know?” or “What questions do we have?”), the focus shifts to shaping the data into a workable, interpretable format.
Each layer is important, and it is imperative to understand how they affect each other, particularly in terms of capabilities and security. While many companies are focused on data collection and storage, they lack the capability to retrieve, analyze or consume it.
Why is digital strategy needed?
Demand for increased reaction capability is driven by a surge of available data that was once largely nonexistent. Obsolete mindsets – “If it ain’t broke, don’t fix it”-are hindering companies in this rapidly changing technological environment.
Progressing along the same re-engineered process efficiency curve has not resulted in significant financial impact. Advancements that leverage, new technologies or software platforms have resulted in new business models, allowing an organization to simultaneously jump to a lower-cost and higher-revenue curve. A digital strategy is not a magic bullet, but it significantly reduced the overall time it takes to make decisions and create wealth.
Digital strategy benefits.
Countless business cases exist for each digital strategy layer outside of the oil and gas industry. Improved data analysis in the construction industry (machine learning techniques) have increased sales volume by 10%, improving awareness of customer, inventory or heavy machinery maintenance needs. Fully integrated digital strategies have resulted in complete overhauls of inefficient manufacturing work processes, reducing rework by an estimated 55%. In the medical industry, aggregation of data on mobile devices has optimized patient care. Advanced cybersecurity methodologies also ensure that financial transactions are conducted accurately, securely and quickly.
So, why is the oil and gas industry lagging behind? Some may believe that these strategies are too expensive, or lack return on investment and long-term benefits. However, some companies are indeed relying on their digital strategy to change their past cost and revenue curves, and the financial results have been impressive. Organizations that choose not to embrace asset and process digitalization will be left behind in today’s fast-moving markets. A digital strategy provides a plan and execution vehicle to communicate and deploy a staged migration that leverages best practices.