The oil and gas sector has been the foundation for the global economy for generations, but it is only in recent times that it has received the unprecedented attention of the people and businesses it serves. The pandemic created issues with supply and demand, while the war in Ukraine has seen a spike in wholesale prices and almost universal notoriety as a result. While these macro influences are grabbing the headlines, the sector is also grappling with a host of other challenges as it attempts to move from the old world into the new. Namely, digitising its operations.
For a sector so vast in scale it is almost impossible for many to comprehend, this is no easy task.
The Labyrinth of Evolving Existing Equipment
The oil and gas sector is built on years of paper-based processes, legacy and an interconnected network of old machinery. This is a considerable challenge as each company attempts to plot a way through the labyrinth of evolving existing equipment in lockstep with solutions that are faster, more efficient and increasingly environmentally friendly. This must all be achieved with limited disturbance to daily operations and simply sprinting to the objective is not the answer. There is a huge amount of risk involved in shifting legacy hardware or too quickly if it is not ready or designed to do so.
At the same time, these antiquated systems are subject to increasing regulatory requirements and under ever-increasing pressure to demonstrate a strong sustainability strategy and environmental management policies.
Archaic Approach Holding Oil and Gas Companies Back
Traditionally, these massive operations have been equipped with manufacturer-specific, dedicated hardware with no uniformity on update cycles and data stored has been on-premises (on-prem). Aside from the perceived ease and sovereignty, on-prem is considered more secure (because the company controls access), quicker to access (because the data is in situ) and better protected (in the context of fiercely guarding IP), amongst other things. On top of all that, on-prem was just the way it was set up years ago before the cloud evolved to become what it is today.
And this is the rub. It is precisely this archaic approach that is holding oil and gas companies back from modernising their operations and moving to the next level. What they are missing is the glue to bind the old and new. The ability to combine hardware - from an individual machine-level - to cloud-based software as a service (SaaS). Yet, following the huge adoption we have seen in cloud computing, combined with relatively easy-to-deploy innovations like sensors and other IoT solutions, we’re reaching a point where it is possible to virtualise operational technology (OT).
According to Statista, the oil industry alone is expected to significantly increase spending on cloud computing solutions and advanced analytics with companies forecast to spend over $12 billion USD by 2030. Let’s take a look at why this is the case.
- Cost savings - SaaS solutions enable companies with cost-efficient, scalable, and flexible virtual storage capabilities. With data migration to the cloud, oil and gas companies can reduce latency, and downtime and gain real-time access to coherent and consolidated data for performing analytics and drawing actionable insights for quicker decision-making.
- The backbone of the digital oilfield - With the help of reliable SaaS technology consulting, companies can adopt valuable time, money, and energy-saving technologies like artificial intelligence (AI) and machine learning.
- Connected operations - A cloud-based eco-system and the diverse cloud-enabled energy and utilities industry solutions allow companies to experience seamless collaboration between these functions and stakeholders, providing efficiency, transparency, and speed in communication.
- Democratising access to data & insights - A SaaS-based solution enables companies to store their data in a structured and coherent manner for detailed and error-free data analyses. With actionable insights, a company can mitigate immediate risks and optimise its business profits and plan effective operational strategies for the future.
- Better flexibility to scale up/down - Cloud storage enables oil and gas, energy, and utility companies to quickly scale to accommodate the data demands of a new exploration site and scale down in case a site stops production.
- Become more reliable and reduce downtime - With the predictive maintenance capability powered by data insights provided by cloud infrastructure, companies can reduce downtime. Together with the remote monitoring ability and data visibility to identify the problem, the cloud can help companies improve their reliability and reduce downtime.
- Operational agility and business growth - A trusted SaaS consulting agency or SaaS technology consulting company can support industry players to simplify their workflow and procedural complexities in documentation, compliance management, decision making, and process management, resulting in speed, and business growth.
Constants in a Sea of Change
No matter the progress made to date, every business in the oil and gas sector needs to be smarter, sustainable and self-sufficient. The pace of change is such that standing still means going backwards. Quickly. As disruption continues at pace, SaaS applications will become more popular because they provide the agility, flexibility and adaptability that enterprises need to survive and thrive during turbulent times.
In a sea of change, there are few constants; the rise of SaaS tools will be one in the foreseeable future. But that’s where Accruent can help. To find out more about our suite of asset management solutions, please get in touch.
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