While digital oilfield (DOF) possibilities are boundless, not every problem or challenge can be solved through new technology. In fact, getting new DOF technology in play is more an

Figures 1 and 2. If the three parties have only the interests shown in Figure 1 (left), collaboration is not likely to happen. If the three parties have the interest set shown in Figure 2 (right), chances of alignment are much higher.
organizational collaboration issue than a technical one. All parties must align to make a successful implementation of new DOF technology happen.

Why? Numerous new technology insertions show that oil and gas companies experience concrete results by using manpower and money in the best interests of companies and shareholders through collaboration and alignment among the business, and research and development (R&D), and information technology (IT) sides.

The opportunity
If such enticing rewards can be reaped, why isn’t every oil and gas company dropping what they’re doing and demanding new technology implementation and integration companywide? It’s because most companies are still learning and optimizing their technical and management methods for implementing digital oilfield technology.

For example, oil company A had been working for years to get the most bang for its buck from several fields, but compared to other assets, the fields still had not met expectations. So, company A sold several of these “under-producing” fields to oil company B. To the surprise of company A, these supposedly under-producing fields became solid moneymakers for company B, leading company A’s management to ask themselves, “How are they turning profits on fields where we were losing money?” Upon inquiry, they learned why: company B implemented new IT collaboratively across organizational lines.

Specifically, company B was using several new DOF technology applications effectively integrated throughout the company. And they were able to get innovative DOF technology in place because they recognized the importance of forging a new and powerful partnership among the asset manager, R&D/IT manager and the company’s top management.

Neither centralization nor decentralization
The most salient point of the example is that company B was centralized and decentralized as well as collaborative. These characteristics allowed the company to make production and technology decisions directed both toward “profits today and profits tomorrow.”

Having swung back and forth between centralization and decentralization over the years, some oil and gas companies are seeing today’s advantages of pointedly leveraging centralization in the technological arena while benefiting from decentralization in asset management. Taking advantage of both requires two ingredients:
a senior manager willing to lead the three-party collaboration and a set of decision-making criteria making collaboration possible. Some companies have learned the hard way that too small a set of criteria can be an obstacle to collaboration. For example, if the three parties have only the interests shown in Figure 1, collaboration is not likely to happen. In fact, the more likely outcome is a “standoff.” On the other hand, if the three parties have the interest set shown in Figure 2, chances of alignment are much higher, and chances of getting new DOF software into play go up as well.

Imagine a collaboration scenario that fits Figure 2. While senior management is focused on returns, it also faces a strategic issue: the need to replace an aging workforce with selective use of automation. The R&D/IT manager is charged with developing innovations to positively impact production and help compensate for the manpower drain, but R&D must also provide professional, effective and efficient implementation support to prevent the asset manager’s nightmare of lost production. The asset manager must focus on production but must also consider the need to integrate innovation in his operation to meet long-term strategic objectives. Now with six interest areas or criteria in play, chances of successful alignment go up dramatically.

Asset manager
A key part of pulling together a collaborative effort involves the asset manager, who must be “sold” a very tangible reality — that the new technology’s benefits substantially outweigh the risks to production targets on which their bonuses are based. The asset manager’s importance in the new technology scenario is, of course, most significant when management of high-stakes offshore fields is a particular manager’s domain.

R&D/IT manager
As this new partnership unfolds, the driving force involves R&D not only providing the DOF innovation but actually helping the asset manager manage implementation risk. That can be accomplished through the proven and trusted “business readiness approach” based on seven key points, recognizing that risks come from three areas — technical, organizational and business:
• Recognize that all projects create changes and therefore risks;
• Analyze the causes of resistance to be able to respond correctly;
• Take the appropriate steps to reduce resistance to change;
• Realize that resistance to change creates risk to the project’s success;
• Create a working committee and name a strong champion to work with the organization;
• Remember the rules for communication; and
• Get as good managing change as managing a project’s technical elements.

Senior management
Before anyone at the company says new software should just be bought from vendors and dropped on users without warning, remember some helpful “lessons learned” by other industry management. These include going beyond the necessary R&D conversation with the asset managers to bringing in senior management. By virtue of their authoritative position, the latter is the key entity that can exert real force necessary to move from status quo in the new DOF environment.

In other words, senior management can encourage asset managers to begin adopting R&D’s new DOF technology by outlining the financial and strategic pluses (with senior management’s clout backing these points — that these are not suggestions).

Another conversation that must occur is with those inside the company who will be impacted by new technology implementation — virtually anywhere including drilling, completions, accounting, onshore and offshore.

Short-term and long-term thinking is another hurdle that can be overcome with proper planning and execution. Senior management must determine how much flexibility to give the asset manager versus how much standardization to require in technology across assets. On the other hand, R&D must shed technical talk and articulate the business case to effectively explain how this new software tool will help the asset manager produce more oil and gas revenue. At the same time, R&D must appreciate risks they are imposed on the asset manager and become as proficient at risk-minimizing implementation as with innovation.

If the upshot appears to be that a tradeoff is brewing, that’s absolutely right. R&D is selling the asset manager a new game plan; they can help him successfully address risks to production targets if the manager reciprocates and adopts their new DOF software tools.

Collaborate to succeed
Companies throughout the global oil industry continue to discover the technical and financial benefits delivered by DOF. Yet many are still negotiating minefields in getting the most productivity for their investment until discovering the other half of DOF – successful implementation, which requires collaboration.

Few executives would consider addressing a major global conference on, say, the role of DOF technology in the oil industry’s future, by ad-libbing from matchbook notes. Then why introduce into an oil and gas company new software, which may have far-flung worldwide operations, by essentially recommending that everyone just read the software user manual and continue with their workday as if nothing new had happened?

If ever “life is a learning experience” applied anywhere, introducing new DOF into a company is it. When new software looks right for any oil and gas company, swing into action by getting a collaborative effort among R&D, asset managers and senior management. Then bring impacted groups into the discussion. Deal openly with change resistance, risk and preparing the organization for user readiness to make each new DOF technology insertion the best it can be for all parties.