The very nature of the energy supply chain is changing. Digital technologies are having an impact in both the traditional oil industry and in the new business models and services it is expected to adopt to meet changing customer demands. Whether accommodating electric vehicles, the convergence of utilities with oil and gas, or alternative energy, oil companies need to act fast.
Transformation is the name of the game—and that’s best achieved collaboratively. By harnessing the power of an ecosystem of partners—whether through joint ventures, alliances, or working closely with other third parties—oil companies can leverage technologies to release the power of data and a new digitally enabled workforce that is equipped with the skills and behaviors to thrive.
Collaboration is key
In 2018, as part of our multi-year Technology Vision research, Accenture asked 100 C-level respondents from oil and gas businesses “how can you unleash an intelligent business to harness new technologies?” Currently, to fast-track their intelligent enterprise, the oil industry is making investments into many new technologies and is piloting projects in key technology areas, such as the Internet of Things (IoT), Artificial Intelligence (AI) and blockchain. And partnerships are on the rise—in the oil industry, the Tech Vision research revealed that more than one-quarter of oil companies said that the number of partners they had worked with over the past two years had doubled.
The traditional oil industry value chain is changing as many companies adopt “as-a-service” business models to embed energy or create a wider set of offerings. Think of the successful companies of the new digital era—such as Amazon, Google, Apple, Microsoft or Facebook—that position data and the services associated with it rather than products at the heart of their offerings.
New technologies are essential to make this change—to stitch systems together so that data and the information from it can be flexible. For instance, where operational technology has not been networked traditionally with digital, oil companies can bring together technologies like cloud, analytics and blockchain to enhance the existing business or develop completely new businesses. It means they can be nimbler and provide new ways of working which could mean also serving customers in the utilities business and connections to homes and cars.
Scale up and supercharge AI
So which technologies are fundamental to new ways operating? AI is a prime example and there is some evidence that the oil industry has woken up to its potential. In the 2018 Technology Vision we found that, generally, although the oil industry has greater concerns about its pace of AI adoption than other sectors, oil companies have a higher focus on leveraging AI for IT support, operations, security, production and purchasing over the next two years than other industries (see figure 1).
Figure 1: In which of the following areas is your organization planning to apply artificial intelligence solutions over the next two years?
Source – Accenture – Technology Vision Research 2018 © 2019 Accenture
*Responses included only where the oil industry was significantly higher than the global response
AI can both supercharge humans and provide intelligent automation to reimagine human tasks. Applied to upstream, it might result in making better decisions, drilling faster, and improving safety; for downstream, it can impact safety and reliability, through greater plant automation and monitoring. Other industries, such as healthcare, are showing the way and are using AI to automate many routine tasks such as blood testing as well as using AI to screen for cancers and other common diseases like diabetes or improving the effectiveness and administering of medications.*
Plan of action
As the energy industry changes and new competitors move in, oil companies’ survival depends on a swifter shift in the type of innovations and digital adoption being considered. Partnering with third parties to deliver technologies such as AI could help oil companies to capture the full potential of AI.
Oil industry incumbents need to:
- Commit to data-driven insights:Â Transform the way they treat and value data in their company, ecosystem and with their investors (oil industry data-driven insights might even be classified as an asset and added to the balance sheet).
- Develop a frictionless business:Â Harness their ecosystem to make sure they are engendering partner and consumer trust. For example, smart contracts and blockchain are driving the evolution of transactional methods and enabling digital trust in the industry. Such partnerships will be vital to exploit these new technologies and enhance the customer experience.
- Supercharge their workforce:Â Recruitment and skill building has been an ongoing issue for this industry for decades and is now being complicated by digital. New technologies such as AI can support humans to do their jobs faster and with more insights. Current siloes can be reinvented with an AI platform to scale and empower the workforce in new ways.
By addressing these changes oil companies can speed their journey toward becoming new energy businesses, with more flexible service offerings, tailored to a changing consumer who they now understand better than any of their competitors.
