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Reframing the digital oilfield

Friday, May 11, 2012

When implementing digital oilfield systems, you are better off seeing what people need, what processes they have, and then what technology can help with them - in that order. By Dutch Holland, PhD, DOF Center for Research and Action, Holland Management Consulting

Worldwide, the digital oilfield (DOF) movement continues to move forward but not at a very rapid pace.

While some companies have seen major improvements with better results, including increased motivation and enthusiasm, other have 'sweated' technology into place with compromised results and a trail of bad feelings.

The major obstacle to overcome is how energy companies and their vendors are currently framing the DOF problem (or opportunity set).

Let's briefly trace the sequence of 'frames' used so far and then propose the optimum frame for maximum business value from DOF.

'Technology Solution'

In the beginning, the DOF movement as viewed today, had a logical and straightforward focus.

Identify a powerful DOF technology, implement (install the technology) and expect immediate business results.

This was simple and elegant but not a frame that produced expected business results even with capable systems and applications.

One frustrated DOF leader proclaimed, 'We are handling the technology end of things quite well; it is the people that are holding us back.'

Clearly, this frame did not comprehend all the relevant variables and implementation issues.

People process technology

There was more to implementation than the technology. Since the phrase 'people, processes and technology' has been around for decades, why not use that phrase as the next DOF frame?

In fact, this phrase is already becoming the new frame for several energy companies attempting to capitalize on DOF potential.

Yet, while this frame helps to better understand the implementation problem, it does not go nearly far enough.

Adjustment solution

Drag the people, tweak the processes, push the technology, until it works.

In this frame, technology is still the driving force requiring the adjustment of work process and people performance to fit the technology. A more practical translation for many organizations has become 'push the technology, tweak whatever processes we need to tweak, and then 'adjust' the people by dragging them kicking and screaming into compliance with the software if necessary.'

The old joke has a golfer telling his wife about his tough day on the links. On the second hole, he says, a lightning bolt knocked out his partner, Charlie.

The golfer says, 'I'm just exhausted; the rest of the day was miserable; just hit the ball, drag Charlie, hit the ball, drag Charlie …' In this adjustment-oriented frame, people, processes and technology are all explicitly taken into account, in theory at least.

The additive Frame

If the idea is to maximize business value, then it makes sense to maximize each component in processes, technology and people.

If energy executives have been working to employ 'more powerful technology,' why not simultaneously work at increasing the power of work processes and the power of the affected operational personnel?

Increasing the power of technology might mean handling more data in less time or ensuring that more people receive needed data in the right amount at the right time. Increasing the power of work processes might come from a cradle-to-grave re-engineering of entire strands of processes, not only to adjust to technology requirements but to ensure that both automated and non-automated parts of processes are optimized. Increasing the power of people would go beyond reactive training on adjusted work processes and technology to re-shaping jobs to become more challenging, motivating and developmental.

Framework for maximum value

One last frame for increasing business value would build on the additive model but would re-prioritize the focal areas for inquiry back to people - processes - technology.

This frame, which starts with people first, is an attempt to put the horse back in front of the cart as it should be to gain maximum value from any new technology movement such as DOF.

The idea of this frame is to require the operations side to take the lead in expecting and exciting its people to dramatically improve operations by designing new ways of doing business from a clean sheet of paper, building in DOF capabilities.

People will lead the way to best value from DOF when they are inspired by operational leadership which has a passion for improving the business, including improving it with DOF- enabled solutions.

There will be no substitute for smart people, taking up the improvement of operations as a life-work in which they are willing to invest continuously. How might such people conditions happen? Will it be random chance? Not likely.

The people excitement and raw innovative power will likely result from operational leaders who become role models, organizers and catalysts who personally see continuous operational improvement as their right leadership roles.

These leaders will not be 'technical junkies' but 'business addicts' who strive to make the business results needle move up continuously. Such leaders must do more than talk a good game; they must personally lead members of their operational workforce to the process step in maximizing business value from DOF.

Processes second

One would have to waken from a deep sleep to be surprised by the impact that process improvement has had in the world of business. Process improvement methods of all types … process enhancements, continuous improvement, re-engineering … have emerged as primary methods that have been tested and proven to work in today's business environment.

Newly-energized operations professionals committed to use the best process improvement methods will be the ones who 'go for the gold' in envisioning new ways of running operations that many have seen as impossible.

The cornerstone for improvement of operational processes, however, will continue to be detailed maps of the company's work processes to serve alongside of blank sheets of paper.

No, not even the most passionate professionals using the best improvement methods can defy the physics of the oilpatch but they can use every inch that Mother Nature gives them to move the ball toward better business results.

When the operational professionals get to the point of saying, 'If we just had this or if we could just do that,' then the opportunity is properly framed for an organization's technology leaders to issue challenges and requirements to a waiting vendor community.

Decades of spectacular G&G technology for exploration were rooted in challenging thinking: 'If we just had this …' or 'If we could just see or do that …'

Isn't it now time for the production end of the business to harness that same innovative energy for DOF?

Technology third

While some energy companies might benefit from implementation of off-the-shelf DOF technology, the real spirit of technology inquiry at this level is to understand operational and technical needs well enough to be able to give vendors a starting point for innovation and service.

Failure to be specific about technology needs will only ensure a continuation of the parade of vendors who must each show what they have, in hopes that there will be enough resonance for the energy company to make a purchase.

And, unfortunately, leaders of the parade on the day-to-day customer-contact level can easily be former G&G technology salesmen who are making their debut into DOF sales and service.

Once the DOF vendor community can draw a bead on operational and technical needs, vendors can begin innovation and competition to create powerful solutions for operators.

In addition, once vendors are in sync with operational needs and developmental directions, vendors can begin to demonstrate capabilities beyond those used in direct solutions.

Vendors can show operators 'what can be done with the latest technology 'and stimulate operations thinking about different classes of solutions. 'Oh, if that can be done with technology, does that mean that we can do our operational processes this way?'

Conclusion

Today's way of thinking about and framing DOF implementation is limiting the business value the DOF movement can bring to the table. In addition to energy companies needing to get in the lead in defining technology needs, those same companies can put the horse back in front of the cart by expecting, enabling and energizing its professional community to put exploitation of new thinking about operations on the front burner rather than on today's back burner.

Dutch Holland, PhD, has worked in the field of managing change with particular emphasis on the 'Building Business Value through the introduction of new technology.' He can be reached at the Center for DOF Action Research in Houston. http://www.hollandmanagementcoaching.com/digitaloilfield/

Associated Companies
» Holland Management Consulting

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