Upstream Oil and Gas Companies Spend Smarter on Digital Technologies to Drive Value, Reduce Costs in Downturn, Accenture and Microsoft Survey Finds
Most Plan to Maintain or Increase Digital Technology Spending Over Next
3-5 Years
As upstream oil and gas companies scrutinize every dollar invested,
they’re spending smarter today on digital technologies, seeking to drive
value and reduce costs amid low oil and gas prices, a new survey by
Accenture (NYSE: ACN) and Microsoft Corp. (NASDAQ: MSFT) reports.
Respondents to the ”2016
Upstream Oil and Gas Digital Trends Survey” included international
oil companies (IOCs), national oil companies (NOCs), independents and
oilfield services firms.
Over the next three to five years, 80 percent of upstream oil and gas
companies plan to spend the same, more, or significantly more (30%, 36%,
and 14%, respectively) on digital technologies as they do now, according
to the survey, now in its fifth edition. This continued investment in
digital is due to respondents’ confidence that digital technologies can
continue to help them drive leaner, smarter organizations.
More than half (53 percent) of respondents said digital is already
adding high to significant value to their businesses. Cost reduction was
identified as the biggest challenge that digital technologies can most
address today, respondents said. In addition, respondents reported that
making faster and better decisions was the greatest benefit digital
technologies can deliver (56 percent) and that one of the biggest
barriers to realizing value is the lack of a clear strategy or business
case, not the technology itself.
Today’s digital investments focus more on mobility, with almost
three-fifths of respondents (57 percent) reporting having invested in
mobile, compared to 49 percent of the respondents in last year’s survey.
Next is investing in the Internet of Things (IoT) (44 percent) this year
vs. 25 percent in 2015 and the cloud (38 percent), up 8 percent from
last year. Over the next three to five years, these investments are
expected to shift more to big data and analytics (38 percent), IoT (36
percent) and mobile (31 percent).
“In the current challenging environment, the upstream oil and gas
industry is focusing digital technologies on areas that help them work
smarter and deliver significant efficiencies and savings in the short
term while enabling them to make better decisions faster,” said Rich
Holsman, global head of Digital in Accenture’s Energy industry group.
“So, in the short term we expect these companies will continue to invest
in areas that help lower operations costs through technologies like
increased worker productivity with mobility, lower infrastructure costs
through the cloud and drive better asset management through analytics.”
Respondents said digital’s biggest impact to date on the upstream oil
and gas workforce has been increased employee productivity and
engagement followed by better training and reskilling opportunities.
They see the greatest impact from IoT in enabling connected field
workers, with 60 percent of respondents planning to have field workers
and assets digitally connected with smart devices.
The use of the cloud, respondents said, has shifted from being used
primarily for infrastructure to an enabler of mobile tools. This trend
is expected to increase in the next three to five years, as companies
keep using the cloud to get faster and more value from other digital
technologies.
“By taking advantage of the intelligent cloud, greater use of analytics
and IoT go hand in hand with what we are seeing in our business today –
the advent of the industrial Internet enabling the power of digital
across the oil and gas landscape,” said Craig Hodges, general manager of
the Gulf Coast District at Microsoft. “You can see this trend gaining
traction from connected wells and intelligent pipelines to highly-
efficient digital refineries.”
While two thirds (66 percent) identified analytics as one of the most
important capabilities for transforming their company, only 13 percent
felt their firm’s analytical capabilities were mature. Almost two-thirds
(65 percent) plan to implement more analytic capabilities in the next
three years to help address this need.
The “2016 Upstream Oil and Gas Digital and Technology Trends Survey,”
sponsored by Accenture and Microsoft and conducted by PennEnergy
Research in partnership with the Oil & Gas Journal, surveyed upstream
professionals worldwide, including engineers, geologists and mid-level
and executive management.
About Microsoft
Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and
productivity company for the mobile-first, cloud-first world, and its
mission is to empower every person and every organization on the planet
to achieve more.
About Accenture
Accenture is a leading global professional services company, providing a
broad range of services and solutions in strategy, consulting, digital,
technology and operations. Combining unmatched experience and
specialized skills across more than 40 industries and all business
functions – underpinned by the world’s largest delivery network –
Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With approximately 373,000 people serving clients in more
than 120 countries, Accenture drives innovation to improve the way the
world works and lives. Visit us at www.accenture.com.
Accenture Digital, comprised of Accenture
Analytics, Accenture
Interactive and Accenture
Mobility, offers a comprehensive portfolio of business and
technology services across digital marketing, mobility and analytics.
Learn more about Accenture Digital at www.accenture.com/digital.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160309005278/en/
Copyright Business Wire 2016