DRIVING UPSTREAM
EFFICIENCIES IN THE
CHANGING WORLD
OF OIL AND GAS
TABLE OF CONTENTS
OVERCOMING THE CHALLENGES OF EFFICIENCY
AND COST FOR OIL AND GAS 3
THE COMPELLING METRICS YOU CANNOT IGNORE 4
LATEST INSIGHTS FROM IFS RESEARCH 5
RESPONDING TO THE CHALLENGE 6
LOOK FOR THE OBVIOUS – AND WORK WITH EXPERTS 7
HOW SONGA OFFSHORE OPTIMIZED OPERATIONS
AND DIGITALIZATION 8
SONGA OFFSHORE LEVERAGES IOT TO TRANSFORM
ASSET MAINTENANCE 9
WHAT’S NEXT FOR YOUR BUSINESS? 10
HOW CAN IFS EXPERTISE HELP? 11
IFS SOFTWARE FOR THE OIL & GAS INDUSTRY 12
MEET OUR INDUSTRY EXPERTS 13
Global industry views on the importance and relevance of digitization vary between industries around the globe.
As oil and gas tend to lag behind other sectors, it’s worth asking yourself what sort of impact you think it might
have for your business.
IFS DIGITAL
TRANSFORMATION
SURVEY 2016
THANK YOU TO ALL WHO PARTICIPATED!
NEARLY 500 SENIOR BUSINESS DECISION MAKERS FROM 20+
COUNTRIES GIVE THEIR VIEWS ON DIGITAL TRANSFORMATION
DIGITAL TRANSFORMATION
REGIONAL SPLIT ON WHAT ROLES ARE CONSIDERED TO BE RESPONSIBLE
FOR DIGITAL TRANSFORMATION IN VARIOUS COUNTRIES
WHO IS RESPONSIBLE?
The nearly 500 decision makers consider these roles
to be responsible for digital transformation
CEO
39%
CIO
40%
CTO
20%
CFO
35%
CMO
6%
OTHER C-LEVEL OTHER NON C-LEVEL DON’T KNOW18% 9%24%
DIGITAL TRANSFORMATION:
WHO IS RESPONSIBLE?
ME
56%
CIO
22%
CTO
22%
CFO
56%
CMO
0%
THE CIO’S VIEW THE CFO’S VIEWTHE CEO’S VIEW
ME
63%
CEO
38%
CTO
19%
CFO
25%
CMO
16%
ME
69%
CEO
44%
CIO
38%
CTO
3%
CMO
9%
DIGITAL TRANSFORMATION
RATING OF HOW IMPORTANT THESE TECHNOLOGIES ARE IN DRIVING
DIGITAL TRANSFORMATION
59
42 48 45
37 53 55 59
IoT 3D Printing Wearable tech AR/VR
Drones Machine learning Cognitive computing Cloud
DIGITAL TRANSFORMATION
HOW IMPORTANT IS IT?
Digital transformation
is just a buzz word
Digital transformation will play
a key role in my market in the
coming five years
I need to know more about
digital transformation
My company has a clear strategy
for digital transformation
Strongly agree Somewhat agree Somewhat disagree Strongly disagree
30%
76%
59%
86%
Agree
GLOBAL ASEAN AUSTRALIA BENELUX BRAZIL CHINA FINLAND POLAND SCANDINAVIA USA
CEO 39% 38% 31% 37% 51% 47% 37% 41% 38% 30%
CIO 40% 21% 31% 22% 42% 53% 52% 57% 45% 29%
CTO 20% 0% 9% 15% 57% 19% 19% 7% 13% 16%
CFO 35% 17% 56% 56% 27% 38% 26% 36% 32% 42%
CMO 6% 0% 0% 11% 4% 6% 15% 2% 7% 6%
OTHER C-LEVEL 24% 13% 22% 11% 42% 16% 19% 34% 15% 27%
OTHER
NON-C-LEVEL
18% 8% 25% 41% 8% 6% 7% 20% 12% 39%
DON’T KNOW 9% 29% 9% 7% 0% 6% 15% 2% 15% 8%
Source: IFS Digital Transformation Survey 2016
DIGITAL
TRANSFORMATION
HOW IMPORTANT IS IT?
2
That means oil and gas companies will need to
leverage IT solutions and digitalization to be able to
plan better, work smarter and do more with less.
Enterprise resource planning (ERP) solutions have
already been widely adopted by the industry.
Furthermore, in an industry where production can
be somewhat distanced from day-to-day human
intervention, the industry was among the first to
embrace the sensor technologies that generated
machine-to-machine data, making it one of the
earliest examples of driving insight through the
Internet of Things (IoT).
Since 2014, the fall in oil prices has caused massive disruption in the oil and
gas industry and an industry-wide reduction in activity and capital projects on an
unprecedented scale. As such, oil and gas companies are now drilling multiple wells
on one well pad and using just-in-time and assembly-line manufacturing practices to
streamline coordination and delivery of equipment and supplies.
OVERCOMING THE CHALLENGES OF
EFFICIENCY AND COST FOR OIL AND GAS
50% of oil and gas companies will be applying proven assembly-line and just-in-time
manufacturing methodologies to well development and production by 2018.
50%
MAJOR MAINTENANCE PROGRAMS NEED TO BE CAREFULLY PRIORITIZED BASED ON NEED
with companies looking to learn from owned asset data without relying on equipment from OEMs.
3
THE COMPELLING METRICS
YOU CANNOT IGNORE
It is essential to analyze and assess the global landscape continually to retain a competitive edge
in the future. The speed and degree of change are significant and the number of competitors
embracing change is substantial. Various industry experts report:
>57% of IT spend by oil and gas companies
was directed towards compliance,
maintenance and running activities in 2016
More than 25% of European oil and gas
companies plan to start using big data
analytics-based technologies (BDA) within the
next 12 months, specifically for maintenance
management, natural resource exploration and
sensor-based pipeline optimization
76% of oil and gas companies will increase
their use of smart devices or embedded
intelligence in processes in the next two years
>50% of oil and gas companies worldwide
will update software to reduce costs, build a
stable IT environment, automate workflows, fill
functionality gaps and align processes by 2018
76%
>50%>25%
>57%
Overall, 45% of companies are re-inventing their business model
to be based on asset availability rather than day rates
45%
ASSET AVAILABILITY DAY RATES
4
Headline insight from new research, commissioned
by IFS from Raconteur Custom Publishing, into the
attitudes towards Digital Transformation in the oil and
gas industry indicates:
LATEST INSIGHTS
FROM IFS RESEARCH
Globally, 33% of oil and gas businesses are still at the
exploratory or nascent stage with leveraging digital
technologies – with smaller companies this rises to 73%
65% of businesses rated the importance of BDA and
IoT as four out of five, or five out of five in terms of
being transformative for positive disruption
Mid-sized companies report they are conspicuously
affected by siloed working due to lack of system
integration
Generally, there is a talent deficit in areas such
as business intelligence, cyber security and IoT –
companies are dependent on upskilling existing staff
0% 10% 20% 30% 40% 50%
Operational efficiency
Operational risk
Operational safety
AREAS WHERE ADVANCED, INTEGRATED DATA VISUALIZATION
AND ANALYTICS WILL HAVE THE MOST POSITIVE IMPACT
33%
65%
Full details of the Raconteur Custom Publishing oil & gas
research into digital transformation are available from
ifs.world/dcs-og
5
Oil and gas companies are facing the reality that they need to transform, but to do that,
they need to create a solid IT environment that will provide immediate, accurate data
to generate meaningful analytics on an enterprise level.
Upstream companies realize that their underlying asset management systems, if agile and flexible, can be
transformed by the integration and analysis of data to enable ‘smarter’ services.
Companies that add innovative service and asset management capabilities to their business model are likely to
benefit from being able to offer new and innovative business models, resulting in additional income streams.
RESPONDING TO THE CHALLENGE
SM
AR
TE
R
SE
RV
IC
ES
IN
NO
VA
TI
VE
B
US
IN
ES
S
M
OD
EL
S
Sustainable business growth
Enhanced revenue
Improved margins
Higher levels of
customer satisfaction
Reduce operational risk
Cut unplanned downtime
Improve safety
Increase production
flexibility and yield
IDENTIFYING THE OPPORTUNITY
Data Collection & Analytics
IN THE FIELD ON SITE ON THE MOVE
6
LOOK FOR THE OBVIOUS –
AND WORK WITH EXPERTS
Software development and ERP need to be more actively leveraged in the oil and gas
industry. Globally, the industry is seeking to outsource for best-practice advice but,
against a landscape of ever-shifting opinions, it is increasingly difficult to identify and
isolate true and sustainable expertise that understands both the industry and the
individual challenges of a digitally-enabled world.
At the same time, senior management needs to deal
with complexities and develop agile policies to take
advantage of change as it happens. To be equipped
for this, they need external experts to look at required
change, the scale of change and the speed of change
while the business goes about doing ‘the day job.’
There is almost a universal agreement across the oil
and gas industry that third-party organizations and
external experts have an important role to play in
digital transformation, particularly in certain key areas.
Where the greatest value can be offered by third-party vendors:
DIGITAL
ORGANIZATION
AND OPERATIONS
41% PROJECT MANAGEMENT40%
PERFORMANCE
ANALYTICS AND
REPORTING
39%
IFS solutions and expertise extends further than
just traditional enterprise asset management
(EAM). IFS also offers ways to maximize
investment in assets using asset performance
management. For example, intelligently deferring
former interval-based maintenance until the
asset performance warrants it.
Industry Director, Maritime, Oil & Gas
7
CONT...
HOW SONGA OFFSHORE OPTIMIZED
OPERATIONS AND DIGITALIZATION
Songa Offshore is an international midwater drilling contractor with a strong presence
in the North Atlantic basin. For drilling contractors, long-term asset management
and maintenance are a top priority since downtime directly affects the overall result.
In 2014, Songa Offshore chose IFS Applications to support onshore and offshore
operations within maintenance, supply chain, document management and financials.
Cato Sola Dirdal, IT/IS Director at Songa, recognized that the organization needed to be prepared for change,
especially those key people who would drive future improvements.
The overall benefits of the new, integrated ERP solution include more connected processes—stretching across
departments and functions—consolidation of systems, easier integration with other systems, improved TCO
monitoring and an improved data foundation with new analysis and reporting possibilities. The company now
holds a common view of maintenance and logistics.
I F S C U S T O M E R S T O R Y
It was important to get a software platform
that could help us standardize our business
processes, to analyze our business activities for
better efficiency and for future improvements,
and at the same time help us improve decision-
making through data analysis.
Cato Sola Dirdal | IT/IS Director at Songa Offshore
NOW, IFS APPLICATIONS HAS
150
users
onshore
550
nearly users
offshore
8
SONGA OFFSHORE LEVERAGES IoT
TO TRANSFORM ASSET MAINTENANCE
I F S C U S T O M E R S T O R Y
Songa Offshore now focuses on further efficiency
and improvements of the ERP solution, through
simplification and automation. The process-driven
approach will concentrate on a company-wide
delivery model, which will optimize how Songa
Offshore works internally and with its suppliers.
The integrated ERP solution has provided Songa
Offshore with a suitable foundation for digital
innovation. One project stands out: the realization
of high-performance condition-based and predictive
maintenance with the help of IFS IoT Business
Connector. The first phase of the project involves
600 assets on each rig, where maintenance will be
triggered based on the number of hours in which an
asset is in use.
When you operate advanced, complex and fully integrated digital assets, it would be extremely
workload-demanding to maintain these assets the conventional way. Instead, we want our
intelligent equipment to tell us when it needs to be repaired.
Cato Sola Dirdal | IT/IS Director at Songa Offshore
A COMPREHENSIVE, STANDARD DRILLING INDUSTRY SOLUTION
AN INTEGRATED ERP PLATFORM ENABLING DIGITAL INITIATIVES
CONSOLIDATION OF CROSS-FUNCTIONAL PROCESSES
IMPROVED OVERVIEW AND COMMON VIEW
IMPROVED DATA QUALITY AND ANALYSIS CAPABILITIES
REPLICATION FUNCTIONALITY THAT ENABLES NON-STOP OPERATIONS
Achieved benefits
Download customer story PDF (0.2 MB)
9
Oil and gas asset owners need to transition their
businesses to an agile footing and move towards an
outcome-based performance culture. Organizations
will need to adapt business processes, adopt new
skills and change business systems to support digital
strategies and technologies.
WHAT’S NEXT FOR
YOUR BUSINESS?
>50% oil and gas companies will exploit new
technology to innovate, minimize costs and help
achieve a lower-emissions environment. Gartner
suggests that as oil prices plunge, demand for digital
oil field applications will grow by 2018.
By 2020, the drive to use data to deliver service and
asset management efficiencies will result in a global
industry-wide IT spend of nearly $48.5 billion.
>50%
$48.5bn
Businesses will need to extend their thinking beyond traditional
enterprise asset management and look for ways to maximize
investment in assets using asset performance management.
10
HOW CAN IFS EXPERTISE HELP?
Senior management needs an expert to plot a business strategy for digital transformation,
both operationally and culturally throughout the whole organization. In a world of uncertain futures,
choosing the right industry experts to work with has never been so important.
IFS has worked with the oil and gas industry since the late
1990s. IFS solutions extend beyond traditional enterprise
asset management (EAM) to offer ways of maximizing
investments through asset performance management (APM),
giving a holistic overview of the asset lifecycle.
More recently, IFS has been at the forefront of investing in
IoT connectivity to align its position with existing capabilities.
In doing so, it can help eliminate the uncertainties, mitigate
the risk, help you embrace opportunism and change and
keep you competitive.
IFS DELIVERS:
Transparency in planning across maintenance
and drilling operations, through increased visibility
of available resources by integrating all activities
for each rig or vessel
Improved metrics-capture of asset performance
against compliance criteria using the IFS Dynamic
Equipment structure and IFS IoT Business
Connector
Essential visibility of MRP and parts across a
global offshore fleet by generating a single master
catalog, shared inventory stock and actual quantity
in-hand due to relocation
A reduction in downtime aligned with improved
asset reliability through integrated reliability-
centered maintenance (RCM)
Optimizing an asset’s lifecycle to share capital
or leased equipment between rig/vessel, across a
global fleet
A stable IT environment delivered through a
replication solution to ensure uninterrupted
offshore processes during times of limited or no
connectivity
11
Asset owners and operators are in need of greater efficiency to cut costs,
without increasing risk or compromising uptime and compliance. With IFS’s
software solutions, businesses can do just that.
IFS SOFTWARE FOR THE OIL & GAS
INDUSTRY
IFS APPLICATIONS
IFS Applications is single, integrated
application suite for global and demanding
business. With non-proprietary technology
and a component-based service oriented
architecture (SOA) built on open standards,
it is a truly flexible and agile solution with a
great user experience.
IFS ENTERPRISE
RESOURCE PLANNING
IFS Enterprise Resource Planning is designed
to rapidly adjust to changes in technology
and business. With powerful embedded
functionality that extends into other crucial
areas of your oil and gas business, it
includes everything you would expect from
a tier one ERP software suite.
IFS ENTERPRISE ASSET
MANAGEMENT
As perhaps the only enterprise asset
management software to address the
entire asset lifecycle, IFS Enterprise Asset
Management facilitates asset lifecycle
management and weathers times of
disruptive change. You’ll be able to ensure
asset availability and manage and protect
your oil and gas assets.
IFS IOT BUSINESS
CONNECTOR
Good strategies increase revenue, boost
profits and enhance efficiency. Build your
IoT strategy around the IFS IoT Business
Connector and see how your oil and gas
company’s operational data becomes
business intelligence and how business
processes become more efficient.
12
MEET OUR
INDUSTRY EXPERTS
Industry experts can play a significant role in helping
senior management plot a business strategy for digital
transformation, both operationally and culturally,
throughout the entire organization.
Leveraging the right industry experts to speed digital transformation
and realize competitive benefits has never been so important.
Our focus on the oil and gas industry is evidenced by both our
deep industry expertise and a solid track record. IFS offers flexible,
project, asset- and service-oriented solutions that manage the total
contract, project, asset and service lifecycle.
For example, our oil and gas industry experts are led by our
Global Industry Director. Backed by a deeply experienced Center
of Excellence team, they can help you get it right the first time
with less risk, quicker time to solution and lower cost.
FORMULATE &
COMMUNICATE
INSIGHTS
INDUSTRY
COLLATERAL
INDUSTRY
STRATEGY
INDUSTRY
SOLUTION
DEVELOPMENT
INDUSTRY
ORGANIZATION
ADVISORY
COUNCILS
CUSTOMER
PARTNERING
INDUSTRY
RESEARCH
Thought leadership
Bu
sin
es
s d
eve
lopm
ent
Solution influence
INDUSTRY ACTIVITIES
SCHEDULE A MEETING
13
14
IFS develops and delivers enterprise software for customers around the world
who manufacture and distribute goods, maintain assets and manage service-
focused operations. The industry expertise of our people and solutions, together
with commitment to our customers, has made us a recognized leader and the
most recommended supplier in our sector. Our team of 3,300 employees
supports more than one million users worldwide from a network of local offices
and through our growing ecosystem of partners.
For more information about IFS, visit IFSworld.com
ABOUT IFS
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Driving upstream efficiencies in the changing world of oil and gas
Since the fall in oil prices in 2014, there’s been massive disruption and an industry-wide reduction in activity and capital projects. Now more than ever, organizations must leverage IT solutions and digitalization. This eBook provides expert insight and real-life examples of how to best leverage technology to increase efficiency.
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