As a business development representative for JourneyApps, a leader in digital solutions for manual business processes in the industrial space, I have spent the majority of the last two years speaking to folks in the oil and gas industry in the United States and Canada. I have spoken with hundreds of people on the business and IT side at companies ranging from Fortune 500 industry leaders to smaller, regional outfits. I wanted to share a few things about digitization within the oil and gas industry that you may find surprising.
#1 Being a big company doesn’t equal being digitally transformed
There are clear market leaders within the industry in terms of digital transformation. While some companies within the oil and gas industry have been implementing digitization initiatives for years, others have done almost nothing in this space. This disparity is not dependent on company size; with bigger and smaller companies being both leaders and laggards in this regard.
#2 The “Big Crew Change” plays an important role in adoption
The big crew change refers to the generational gap within the industry caused by a downturn in hiring in the 80s, 90s and 2000s. One half of the workforce has been in the industry for 30 years or more while the other half has been in the industry for less than 10 years.
We have seen that there is aversion to change brought on by digital transformation from the older generation, just as the younger generation is more open to change. A big challenge for vendors hoping to enter this space, as well as companies wanting to implement digitization initiatives, is convincing the older generation to change from the way that they have done something for decades.
#3 IT becomes thinly-stretched when oil and gas companies want to be software companies
Every company within the industry has an IT department, but the role that these departments play in digitization varies. Some IT departments are mainly focused on maintenance of office software such as ERP and CRM systems. These IT teams are usually open to the discussion of outsourcing the digitization of business processes to 3rd party vendors.
Other IT teams, though, are determined to own all software development throughout the company. This becomes an issue when the line is blurred between being an oil and gas company and trying to be a software company. IT bandwidth becomes stretched thin while trying to fulfill digitization requests coming from all quarters within the organization. These IT departments are usually opposed to bringing it outside vendors as it clashes with their mandate. For a vendor to find success here, it must be shown that its technical capability is superior to that of the IT team, or that there is a real advantage to moving the burden of development out of the internal team to an outside vendor.
#4 Innovation is dictated, and often stifled, by the volatility of the market
The traditional view is that almost everything within the oil and gas market is dictated by the oil price, and digitization efforts are no exception. During a downturn, companies are averse to any kind of spending, especially that which is seen as unnecessary. Vendors, and champions within the company, need to demonstrate that the digitization of business processes actually saves money and allows companies to do more work with fewer resources. Once companies understand the value that automating business processes bring, they are less averse to paying for it.
#5 It is an industry that is rife with opportunity
More and more companies are realizing that to keep up with their competitors, the digitization of business processes will have to become a priority. The oil and gas industry is very big and there are many companies whose operations can be improved drastically through digitization. There is overwhelming potential for companies within the industry, as ever-improving technology affords them an opportunity for accelerated growth. There is also an opportunity for solution vendors to penetrate the industry as many companies are still immature in terms of digitization implementation.
The oil and gas industry is a diverse and interesting space. With large and small companies starting to understand the value of digitizing their manual business processes, the industry is on the verge of a revolution. As this digital revolution within the industry picks up pace, speed to market and partnering with a company that understands the industry becomes increasingly important.
JourneyApps has worked with market leaders within the oil and gas industry to digitize manual business processes and has done this at market-leading speed. JourneyApps can build you a prototype of any business process in just a week. Get started today to ensure you are part of the revolution and stay ahead of your competition.