Optimize workflows to maximize new technologies.

Few exploration and production (E&P) companies come close to high utilization of the state-of-the-art digital technologies, data and people in which they have invested so much money. Often, large gaps exist between the vision and everyday reality. All kinds of inefficiencies can undermine value creation - too many silos between disciplines, databases and applications; lack of shared earth modeling; unnecessarily complex workflows; training out of sync with user needs; inconsistent economic and risk analysis techniques. The result may be serious misalignment between management expectations and the daily activities of E&P professionals.
It does not have to be this way.
A few years ago, the senior vice president of exploration for a Canadian oil company was frustrated with the level of technology adoption among his geoscientists, despite putting some of the industry's most advanced applications at their fingertips. "I'd like to see our people make much greater use of high-end software capabilites," he noted. "Why have a garage full of Ferraris if no one has a driver's license?" To that end, he brought in outside consultants who met with his management team to identify the division's high-level business drivers. Next, geophysicists, geologists, engineers and technologists were interviewed to map out current workflows and understand problem areas. As a result, a number of strategic initiatives were launched to improve exploration processes, application integration, data management and computing infrastructure. Multidisciplinary teams were put through customized training in more integrated workflows and mentored
on the job as they began to use new tools and techniques. The payoff: dramatically reduced cycle times, increased technical accuracy, better reservoir understanding, lower risk levels and higher-quality prospects.
What did it take to turn things around? The short answer: a strategic approach to digital technology adoption driven by clearly articulated business objectives. Before considering ways to ensure better take-up, let's review common barriers to technology adoption.
Barriers to adoption
Successful adoption of digital E&P technology always requires a fine balance among technology, process and people (Figure 1), as noted in Real-Time Optimization: Classification and Assessment (SPE 90213, S. Mochizuki, et al., 2004).
Technical software functionality can sometimes be overwhelming. Often, only a few "power users" ever become proficient at more than 20% of an application's capabilities. In addition, certain commercial application suites are tightly integrated, while others operate in almost total isolation. One asset team, division or company may choose a solution based on ease of use, another on integration, another on best of breed and yet another on price. Making the wrong choice can impact the business for years to come.
Another challenge to technology adoption is the inevitable change in workflow process. New technologies must fit within an existing workflow, or the process must be re-engineered to accommodate new tools, which can seem like a daunting task. It's often easier to maintain the status quo, however wasteful or inadequate. Generally, E&P professionals are too busy and IT staff too overworked to figure out better workflows without assistance.
The third major barrier is people. Unless E&P professionals and technologists are committed to investing personal effort, the change process will likely fail. Obtaining their commitment, therefore, is the first of several stages in the technology adoption process (Figure 2). Change always causes users a certain amount of pain. They know from experience that before they reach a higher level of performance with new technology, they will have to pass through a "valley of pain." Asset team members need substantial support through this transition. Change creates uncertainty, confusion and feelings of inadequacy. Intelligent approaches to technology adoption must carefully consider all the human factors.
Resistance to change
One of the best ways of promoting adoption of optimal tools and workflows is by getting an accurate picture of the company's top business issues and understanding the current state of E&P technology usage. To accomplish this, many E&P organizations today are utilizing a structured yet highly flexible methodology known as an Upstream Technology Review (UTR).
A UTR is an interview-based approach that begins with senior-level sponsors in E&P and IT to identify desired business objectives that will guide decisions regarding technology strategy. Companies often get this backward (Figure 3). Next, asset teams are interviewed in order to understand how they currently use digital technology, what pitfalls and bottlenecks they routinely encounter, and what improvements they feel are needed in order to achieve the business goals set before them. This part of the UTR process is extremely important because it helps overcome resistance to change later on. Why? Because nearly everyone who will be affected by the change is actively involved right up front.
Once goals, problems and current workflows are identified, a comprehensive E&P Digital Technology Strategy (DTS) is created. Strategic questions that must be answered to develop a strong DTS include the following:
• Are specific technologies critical to achieving targeted business objectives? If the focus is deepwater exploration with large amounts of 3-D seismic, volume-based interpretation may be called for. For enhanced recovery from mature fields, integration of flow simulation from the subsurface through the surface facilities could determine success or failure. For fast-paced drilling operations, real-time data transfer, analysis and visualization may be necessary.
• By what IT criteria will software applications be chosen? Will selected technologies be developed in-house, or will only commercial applications be adopted? Will an integrated suite from a single vendor serve as the "standard" or "core" tool set for multidisciplinary asset teams, or will stand-alone, best-of-breed tools from multiple vendors be considered? How important is ease of use?
• What costs - and benefits - are associated with each of these strategic choices? Careful analysis should be made of the economic impact of various technology options - including both obvious and "hidden" costs and benefits. In addition, the ultimate value of new technology adoption in terms of business process improvement should be quantified as clearly as possible.
With respect to people and the change process, questions that should be considered for a Digital Technology Strategy include:
• Is executive management behind the change program? Nothing kills a promising initiative faster than lack of support from management sponsors. Typically, executives authorize a steering team to govern the change process, which often includes outside consultants as well as in-house E&P and IT staff. Executive engagement and support enhances "buy in" from all participants.
• What are the likely barriers to change from users? E&P professionals need motivation to change and a roadmap to guide them. Typical objections can usually be overcome with a clear vision and carefully staged approach (cf. Figures 2 and 3) that addresses their needs as painlessly as possible. One independent oil company came up with a creative way of retaining the knowledge of an experienced geologist who, nearing retirement, felt he was simply "too old" to switch from paper to a computer. He was paired with a young, technologically savvy college graduate who had to learn everything he could from this industry veteran and capture it in digital form.
• How will training be handled during the transition? Training must be coordinated such that it disrupts the day-to-day working environment as little as possible and it coincides "just in time" with the introduction of new tools and workflows. In addition to customized classroom training, innovative methods of learning may be necessary. One-on-one or team mentoring on the job often makes a big difference in the rate of technology adoption. Some companies engage outside application consultants to "drive" the new technology for asset teams or individuals who are climbing the learning curve.
• How will success be measured? Often, fast-track pilot projects enable early adopters in the company to achieve quick results, including learning and uptake of new digital technologies. Over longer periods of time, key performance indicators and balanced scorecards can track the increasing value of digital technology as it spreads to other teams.
The bottom line
By adopting a variety of the change management approaches described above, E&P companies can achieve truly phenomenal results.
Over a 5-year period, for example, one global independent boosted digital technology usage while lowering annual IT costs, improved the proficiency of asset teams worldwide, increased exploration success rates, reduced finding costs and cycle times, and increased reserve volumes per E&P professional. Originally, the company had projected a return on investment of several tens of millions of dollars per year from its digital technology initiative. For two years in a row, however, it achieved more than 250% of its target.
That is the ultimate rationale for overcoming barriers to E&P technology adoption.