Is oil and gas digital transformation all about the money?

Hexagon PPM delves into the drivers behind industry modernization

Hexagon PPM

You’ve been telling us for the past 12 months that digital transformation is a hot topic so we wanted to find out more. Not about the technology (we already know about that!) but about the broader industry setting, the challenges and the drivers as we move into 2018.

We’ve spent the past couple of months surveying our customers and the industry and we’re pleased to be able to give you a progress update. Some interesting themes are emerging, which we’re going to explore in greater depth in an upcoming report, to be released in February 2018.

But for now, we hope this article gives you a broad snapshot of the conversations we’ll be having with you in the coming year. Don’t feel like reading? For a quick summary, download the infographic.


Get Your Free Oil & Gas Digital Transformation Infographic!

Industry threats and organizational challenges


The oil price is likely to be the biggest threat to the industry in 2018, according to a snap poll of our Twitter followers conducted in November 2017. It recorded nearly twice the votes of any other answer.

Thankfully, emerging digital technology is not really seen as a threat. Digital transformation may seem overwhelming if you don’t have a clear roadmap, but we’re making it our mission to help you turn it into an opportunity!


We also wanted to know about organizational challenges and it was no surprise that managing costs was the leading response, with just under two-thirds of respondents to our recent survey listing it as one of their top three challenges.

Managing people, systems and processes was not far behind, with half of all respondents listing it as one of their top three. While we knew this was a challenge for many organizations, we were surprised it returned such a strong result, above factors such as “efficient project delivery” and “driving growth”.

Does the oil and gas industry understand digital transformation benefits?

Yes, as it turns out – the benefits of digital technologies such as big data, the Internet of Things and advanced analytics are well understood. More than 85% of respondents to our survey said people within their organization understand the benefits at least moderately well.


Go to Tweet

So what’s the problem? Why is the oil and gas industry lagging in the adoption of digital technologies? We’re not the only ones who think so, by the way – Deloitte and many others agree.


There’s a very clear problem, as it turns out. We asked our survey respondents for their single largest challenge in adopting digital technology and 60% of them named issues relating to people and processes (let’s call it internal readiness) – they’re either underdeveloped or too complicated, or there’s no support from senior management to change. Cost (or perceived cost) barely registered.

Internal readiness – is it really a barrier to oil and gas digital transformation?

While our own industry experience suggests internal readiness has a huge part to play in how well an organization embraces digital transformation, we wanted to test the theory with an expert.

We asked Dr Huck Poh – former vice president of Downstream Technology Services at Shell Centre in Amsterdam, and now a senior advisor and consultant to other leaders in the oil and gas industry – for his thoughts on the topic. Watch the video below to find out what he said.

Don’t have time to watch a three-minute video? Here are the highlights of what he had to say on the topic of internal readiness:

“In my experiences of leading or participating in major change programs for big oil and gas companies, the decisive X-factor that determines the ultimate success and failure transcends the technology. It’s about leadership, it’s about culture, it’s about the attitude of the workforce.”

Manage internal readiness with a digital transformation ecosystem

You’ve spoken, and we’ve listened. You don’t need to hear about the benefits of digital technology for the next 12 months. You need help with the internal readiness factors that are unique to your organization. This is how we’ll be partnering with our customers in 2018.

Experience has shown us that oil and gas companies can build an ecosystem of skilled partners who will help to manage organizational complexity and costs on the path to digital transformation. Follow us on LinkedIn to secure your advanced copy of our Digital Transformation Ecosystem report – coming in January 2018.