The oil & gas industry is being transformed by the rise of Collaborative Work Environments (CWEs) and Real Time Operations Centres (RTOCs), which are designed to improve collaborative working between different functions and departments by orders of magnitude. The goal is to reach efficiency and productivity levels that could only have been dreamed of in the past. Yet by fixating on the need for basing collaborative teams within a physical environment the industry may be adopting a technology solution that is now becoming obsolescent, as other industries are leapfrogging ahead towards virtual collaborative working environments.
Oil & gas is not unique: every industry is now moving fast towards collaborative working, and that includes many sectors that have a well-earned reputation for being slow-moving and somewhat conservative when it comes to innovation. City and national governments, for example, are moving at high speed towards virtual service delivery, while virtual collaboration is increasingly important to armed forces and financial institutions.
- In the UK, to give one example, almost 20 million citizens now interact with 120 government bodies through virtual channels and transact all their government related business in this way.
- The defence industry in the US and most European countries is increasingly dependent on virtual collaboration between suppliers and armed forces to meet faster, lower-cost delivery schedules, while moving support services closer to the front line.
- Banks and insurers are launching services to customers that are based on collaborative working between a range of specialist suppliers, external partners (such as retailers, airlines, bus companies, entertainment centres…) and contextual data providers.
In every case, breakthroughs in speed of response, accuracy of targeting and quality of service require multi-vendor, multi-functional collaborative working. In many cases (banks and defence, for a start) security is a huge and growing issue, yet new identity and access management systems are enabling remote joint working with growing success. This is a game-changer for many industries.
One current example? Growth in mature markets (largely European) is now completely stagnant for insurance companies. They want to open for business in emerging markets (South America, South Asia, The Middle East) but they want to do it fast and at low risk. So what do they do? They certainly do NOT move to the target country, rent a property, recruit a large number of staff and go through the year or more of development work needed to get started.
No, they take their current processes as a virtual image and deploy this, with whatever variations local law makes necessary, in days. All support services are provided from a remote centre, which could be anywhere in the world. Result? They can be up and running in a week or two. There is minimal risk, minimal cost.
The moral of this and many other examples that we could quote is very simple. Today, bricks and mortar represent unnecessary cost and risk. They slow you down and cost you more. They make it harder to profit from shared services delivered from a global centre of excellence. And they are starting to appear just a little old-fashioned.
What about oil & gas?
The oil & gas industry has been an enthusiastic early adopter of Collaborative Working Environments (CWEs) and, of course, RTOCs. The need to improve integrated management of the entire upstream and downstream environment is well-understood and does not need to be discussed further. Yet it is a fact that the physical environment is still central to most of the projects currently underway. Why exactly is this, when other, late-adopters are now moving faster towards virtualisation and are, effectively, overtaking the oil & gas industry?
We can think of three possible reasons:
- Culture. This is a world dominated by engineers, so systems that may appear as yet unproven or less than 100% reliable are not easily trusted by the managing engineers. They are often in their fifties or older, and may not be ready to accept that control of life or death functions can be safely placed in physically remote locations.
- Cost. The oil & gas industry is perhaps the only sector on Earth that currently does not have to obsess about upfront cost savings in quite the way the rest of us do. Where other sectors are asking themselves how they might close down and reduce the number of buildings they operate, oil & gas companies are busy opening new ones.
- Management group think. This is almost certainly the most important factor of all. Many senior managers need to learn how to trust in new ways of managing their companies, thus becoming a little more willing to give up hands-on control. New virtual technologies can deliver major business benefits, but only in the context of open, horizontal and collaborative working environments. That makes it important to move existing values and behaviours towards more transformational management styles.
One factor more than any other is going to force change soon enough and that is a growing shortage of skills. As the industry struggles to find the right number of qualified and experienced people it needs, so the pressure to enable key personnel to support multiple projects, together with a shared service approach to support functions, will become irresistible. This is only possible through virtualisation.
Change and change agents
The oil & gas industry has not always been backward in this area. A leading international oil major piloted a virtual collaboration environment over 10 years ago, but it proved unsuccessful and was eventually dropped. One of the key problems at that time was the immaturity of the presentation technology being used. The environments were unrealistic, slow-moving and often awkward, but all of this has now changed completely, largely thanks to the games industry.
Computer games today are able to create fully-realised multi-player environments that are extraordinarily lifelike, flexible and intuitive in use. As a result, major games launches now earn three to four times as much as the largest Hollywood blockbuster, and lead to global audiences counted in tens of millions collaborating and competing with strangers from round the world in complex activities.
This adds a possible new dimension to future CWEs and RTOCs in the industry as they can now be completely recreated in a virtual environment, including the virtual operating of its systems, while introducing game-based interfaces as a way of managing the integrated fields, faster, more efficiently and without the need to have an entire team located in one place. This is just one step further on from today’s thinking and could potentially make working with technology much more intuitive and engaging, while further improving outcomes.
It will also attract the so-called “Generation Y” of emerging digital natives. As the current skilled workforce continues to age, it will become more important than ever to attract these younger people. They are very used to collaborative working over very long distances, and they also find it easy to work with design artefacts and methods that are rooted in the games industry. We believe that, sooner or later, the oil & gas industry will come to realise that if they want to attract the best of young talent, they will need to offer them the tools they find most attractive.
Other, apparently more traditional and conservative organisations, like banks, have understood this and are developing multi-channel virtual environments for flexible interaction with customers, using social networking as a key resource and investigating use of lifelike avatars to simplify collaboration. They need the rising generation as their customers of tomorrow, just as the oil & gas industry needs to recruit them as the engineers of tomorrow, so they must all make the effort to speak their language. It’s probably fair to say that, by contrast, there are few 55 year old oilfield engineers staying up to date with the latest and best in games technology. That may explain why they just don’t understand how powerful techniques for collaborating virtually have now become.
To summarise, virtualisation technology is reaching new levels of maturity and security, making it possible not just to replicate all the functions of a physical CWE/RTOC online but to add new benefits, as well. These include enabling access to specialist services on a scalable, need to have basis, rather than having them permanently on tap. The savings this could deliver are obvious, but so is the benefit that comes from greater productivity, reduced employee “downtime” and improved operational efficiency.
The challenge now lies with management. Will they look seriously at these emerging new techniques? And we also need to ask if there are enough change agents, open-minded people who are able to make new working practices happen without major disruption. Where are these people and how can they be mobilised?
Finally, let’s consider the oil & gas service companies, who are actually building Intelligent Oil Fields and physical CWEs and RTOCs all over the world. This is becoming increasingly important to them as well, offering huge new opportunities to those who understand the future and put it to work.
Our recommendation? No-one has the complete answer to this, but we think it is now clear that three core capabilities are required to build a 21st Century CWEs and RTOCs that combine the full potential of emerging virtualisation technology to the basic requirements for near real time collaboration in all aspects of operations.
- Field operations, covering everything from ground work to telemetry to data management and technical training.
- Change management to drive new collaborative cultures and skills, while introducing more intuitive ways of working
- Virtual collaboration technology, to build a lifelike virtual environment, using emerging technology, and to establish the methods needed to maximize potential.
This is going to be a challenge. After all, what could be further apart than the culture of a passionate role-play gamer and a highly professional petroleum engineer? Yet to unlock a world of new benefits, we need to bring them together in a creative collaboration. It may not always be easy, but we predict it will never be dull and could be immensely productive.