Lately, when I go to the gas station to refuel my vehicle, I am pleasantly surprised by the price and love the numbers I see—as a consumer. However, falling gas prices have obvious implications on the oil and gas industry, as reflected by the stocks going “downstream,” so to speak, in recent times. While the economic pundits work out the global market forces, what can oil and gas companies do to re-energize and rejuvenate this sector? Innovate. Of course, for innovation to be effective, it should have proper context and tangible business benefits.
Based on this insightful article, “Data as the New Oil?” in Offshore Engineer, let me share a couple of thoughts on how innovation can effectively renew and reinvigorate the oil and gas industry.
- Innovate to save costs. Economic downturns like the one being experienced in this sector are fantastic opportunities to innovate ruthlessly to save cost. Even simple steps like reducing paper and going mobile to collect and transmit data can introduce levels of automation that can result in tangible cost savings—especially savings on cost incurred due to compromised data quality and integrity. Environments with legacy technologies are fertile ground for technological innovations that drive competitive differentiation.
- Innovate the ecosystem. Technology is just one aspect of innovation. Technological innovation must be continuously nurtured through a thriving ecosystem that fosters a culture of innovation. Drupal founder and project lead Dries Buytaert shares his first-hand insight in this article on how the open source model helps solve the innovation problem. In the article, Buytaert explains to a Chief Digital Officer (CDO) of a large mobile telecommunications company how a global organization such as hers should think about organizing itself to maintain control over costs and risks while still giving it the freedom to innovate.
The freedom to innovate fosters a culture of innovation. It behooves oil and gas companies to take such simple but powerful steps today to be ahead of their competition tomorrow. In the end, it really comes down to two options:
- Maintain status quo and keep the lights on waiting for the market to correct itself; or
- Combat the downturn in the market with innovative cost savings today while building a sustainable ecosystem for the future.
What say you? Are there other steps that oil and gas companies can take to be competitive enterprises of the future? If there are, please let me know in the comments section below. I am sure the oil and gas companies would be interested too!
Meanwhile, back to the pump. As a consumer, I still want the gas prices to be low, as does my spouse. But then, that is what purposeful innovation is all about. It has to directly improve the quality of life for the end consumer—both you and me. May the innovation begin to renew the energy of oil and gas.