The Retrofuturist Chronicles: Oil and Water

Learning to Compete as an Ecosystem

In episode 3, we once again see how one of Miranda’s projects (bath bombs this time) is the launching point for one of Aunt Natalie’s factually suspicious but entertaining trips down memory lane. One thing is certain: both aunt and niece have boundless energy. And speaking of energy (awkward segue), Aunt Natalie’s efforts trying to build a working water engine highlight how alternative energy sources are nothing new. But oil and gas producers have little to fear from Aunt Natalie, at least for the time being. A more immediate concern is the inherent unpredictability of energy markets — and how to continue to innovate and thrive, despite that volatility.

On April 20, 2020, the price of West Texas Intermediate crude dropped by almost 300%, trading at around negative US$37 per barrel. In essence, sellers were paying buyers to take the oil off their hands. The negative price was unprecedented for the industry, but unpredictability isn’t. An isolated event from a weather forecast to a report on consumer confidence can send prices reeling.

Despite Aunt Natalie’s failures with water-powered engines, real-world renewable alternatives are becoming more attractive and affordable. We’re also seeing significant improvements in fuel efficiency. At the same time, demand for reliable, accessible energy continues to grow in emerging consumer economies worldwide. So, how can operators continue to thrive in an industry that has to juggle unpredictable demand, strict regulatory compliance requirements, and complex global supply chains?

Competing as an ecosystem

One strategy is to learn to compete as an ecosystem—to closely coordinate resources, information, and effort throughout a network of partners to improve forecasts, streamline production, and increase agility and responsiveness. All of the companies involved can benefit from seeing and acting based on shared, end-to-end insights across the ecosystem.

The lines between “traditional” oil and gas companies and alternative energy companies will continue to blur—and this evolution will coincide with greater collaboration across the partner ecosystem. As companies throughout a value chain recognize that one partner’s challenges affect the entire network, operators will push the boundaries of automation and AI to improve their own safety and productivity, and they will seamlessly share data with ecosystem partners to work together to ensure that they meet production, profitability, and safety targets.

Through closer collaboration and the seamless exchange of data, companies can also better address supply chain challenges such as integrated business planning and secondary cost reduction. Each partner benefits from managing projects collaboratively across the entire project lifecycle and ecosystem. They can also improve the customer experience for transactions and services that cross company boundaries.

Becoming an intelligent enterprise

To create a collaborative ecosystem, companies must evolve to become intelligent enterprises. In an intelligent enterprise, teams can anticipate events and collaborate on solutions because they capture real-time operational data on customer transactions, supply chain, manufacturing, spending, and workforce activity. They can easily access that data through reports and dashboards. And they can mine that data to identify trends and predict what will happen next.

But to influence what happens next, companies also need data on the way customers interact with their business and their products. This experience data offers insight into beliefs, emotions, opinions, and perceptions — helping companies understand “why” something is happening, not just “when” it happens. And when companies know the root causes of market events and customer choices, they can make informed decisions on the best response.

More oil and gas companies will soon begin using advanced technologies such as augmented reality and robotics to improve safety and productivity, and they’ll collaborate with their ecosystem partners by sharing the data these solutions generate and the best practices that emerge. Companies will also work together to meet production, profitability, and safety targets. And as they master the convergence of IT and operational technology, they’ll develop better asset intelligence and make shared use of the performance data that will fuel smarter collaboration.

In a more connected and collaborative world, no company succeeds by itself. By working closely with their ecosystem partners, oil and gas producers can develop and maintain the innovative solutions and business practices that will ensure their joint competitiveness, despite the volatility and disruptions they face.

For inspiration on how SAP solutions can help you and your partner ecosystem compete more effectively, visit inspirethefuture.com/oil-gas. To see where you are in your journey toward becoming an Intelligent Enterprise, complete the self-assessment today.

SAP and Capgemini:

Helping oil and gas innovators adapt to a volatile market

Energy companies face a level of disruption not seen in decades. New, cash-rich competitors are disrupting the market. Renewables prices continue to ratchet downward. New energy-storage technologies are rapidly becoming industrialized.

Capgemini is purpose-built to guide energy companies as they master these market shifts and tech-triggered trends—and to help them use SAP to do it. Our 16,000 energy experts work with you and SAP to create a vision and chart a path to digital transformation.

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