Gotta love the old saying “if you always do what you’ve always done, you’ll always get what you’ve always got”. This saying is something the Oil & Gas industry is simply not tolerating. Those companies that embrace this philosophy, or simply do not take a proactive approach regarding the adoption of technology and process improvements, will quickly lose market share. The service companies that are taking strides to improve performance and provide their customers with real-time operational data equating to faster and smarter decision-making will ultimately win.
With the advancements in hydraulic fracturing in the US shale plays, the oilfield is innovating at a record pace. We are also seeing operators assemble innovative groups to digitize and automate the oilfield. These groups will be pushing these technological advancements down the value chain to their service companies. We see the forward thinking service companies reaping the benefits of their innovation and embracing the inevitable transformation that is coming of age in the Oil and Gas space.
It’s 2021 folks, it truly fascinates me when I visit with executives from significant size service companies and they claim they are too busy to implement process improvements or technologies that will help their business immediately. Back in the early days of my software career, we’d spend months researching and building a return on investment case for a software sale and implementation. We would have to dig deep into our customer’s business and find each and every value point we could to justify the expenditure; literally hours upon hours of painstaking research to prove our case.
Today in the oil field services space and with the evolution of quality software companies, you can find ROI in a month or two, which is unheard of. So… you ask how’s that possible?
Ok, here we go….first question I ask is how many and where are your assets? How do you account for these assets? How do they move around your business and to your customer? How many of them do you have? Where are they located? What’s the history of these assets? Can you with any certainty tell me if an asset or a component of it COULD possibly fail or if it would not be a good idea to introduce it to a specific environment where it’s almost certain to fail? This is the type of information that is easily trackable and will eventually be the standard and not the exception.
In most cases I get, “well we’re just too damn busy to track that stuff or Joe was handling that until he quit and we’d need to pull up Excel and see where we’re at”. When I listen to these responses I see a dog chasing his tail spinning round and round and essentially going nowhere, and the more he turns the dizzier and more confused he becomes. To compound this, there is usually an incident or failure on the job site and the company demands answers which create more spinning and time wasted when the information could have been at their fingertips in real time.
That is just one example. I won’t get into the reality that companies in this space can track bids, jobs, and personnel. We don’t need to include the reality that you can run your survey program in the same web-based platform and did I mention that web-based software is readily available in the industry? I’m not talking about old school software that you spin up on a server in your utility closet and hire three full-time experts to run; No, I’m talking about software as a service that leverages billions, yes BILLIONS of dollars of infrastructure to scale and securely house your specific data. You don’t have to stretch too far out there to realize we can have all of our operational data from our price book to our end of well reports in one system which will flow through like the operations of your business. Just think about what it would be like in this scenario when the company requests this information and you had taken the time and investment to embrace technology. This is not futuristic stuff; this is today and soon will be the standard. The service companies that are here today will certainly have a competitive advantage until others can catch up….. if they do.
The operators out there will continue to press the service companies on margin and for increased performance. In a market where pricing is inflexible for periods of time, those who operate more efficiently will end as the winner.