The Legacy Software Stranglehold: How to Break Free, Shrink Costs, and Do More with Less – Part 3

Part 3 – Putting a Value on Data and Building a Data-Driven Culture

W Energy Software has teamed up with the Novus Consulting team to bring their voice of authority to the upstream oil & gas C-suite.  Through this blog series, we’re going to talk candidly about the lack of innovation in the back office, and why old legacy technology is holding upstream companies back –  just as much as an entrenched mindset and culture of doing things the way they have always been done. Some leading organizations are afraid of making the change that will ultimately allow them to operate more efficiently, build business resilience, and unleash the potential of their workforce, by eliminating the data and cultural ‘silos’ that are holding them back. They are choosing instead to maintain the status quo, and kick the can down the road exposing them to the risk of being at the mercy of market fluctuations, and of being out-performed by their peers who have modernized their accounting, land, and production systems. In this blog series, Chevy Thomason, a founding partner at Novus Consulting, discusses how to navigate and close the widening technology chasm with unified upstream solutions built on the cloud, and even more importantly how to navigate change, and create a data-driven culture that will increase business performance, unlock agility, and save your team millions.

By Chevy Thomason, Founding Partner at Novus Consulting

How do you put a price tag on data?  One way is to calculate the cost of acquiring it.  Take well logs as an example.  Oil & gas companies can spend millions of dollars on wireline work to log their wells.  This data is very valuable but like so many oil & gas data types, it’s stuffed in a physical or digital filing cabinet, accessible to a few and limiting its value to the entire organization.  That’s just one of the hundreds of data types drilling, land, production, and accounting teams work with on a daily basis.  And the worth of these data assets far exceeds the mere cost of acquiring or creating them, underscoring the need for robust data management and methods to maximize data consumption across teams.

In my last blog, I talked about the mishmash of legacy energy software that creates data silos and impedes the free flow of information in the petroleum enterprise.  Today, I would like to talk about “cultural data silos,” people and processes that create information bottlenecks and data delays.

Data Management Defines Success in the Digital Oilfield

Right now, millions of dollars hinge on making the right decisions in the field, land department, accounting, and other areas of your organization.  Those decisions are only as good as the data at hand and all too often multi-million-dollar decisions are made with inaccurate, incomplete, inconsistent, or multiple versions of data.  Look at it the other way – what decisions are not being made because of data silos?

Here’s a simple example.  Your team continuously receives notices and hefty fines from the State of Texas because HSE isn’t reporting perforated zones in a timely manner.  Geology has the data but it’s in unstructured PDFs, out of reach for many, except for a few specialists.  Breaking down these types of data silos requires the right technology approach but, in my experience, 90% of all data access and quality issues result from cultural data silos. As an industry, our appreciation and understanding of the impact of data have not kept pace with its accelerating volume, variety, and velocity.  For energy professionals working on different ends of the value chain, this lack of education limits the perceived value of data for unrelated workflows, even if these staff sit across the hall from each other.

Creating an open and accessible data culture starts with shifting the mindsets of all departments to treat data as an asset whose value extends across the entire organization.  Legacy oil & gas software and a fractured, poorly connected application ecosystem can also hold your team back.  A unified ERP platform or software suite with robust integration across functions provides a foundation for creating a single and centralized version of the truth (master data), which in turn enables a free flow of data across teams.  People and processes are required to ensure data integrity.

Master data management and continuously cleansing multi-disciplinary datasets depend on sustainable data governance with the overarching strategies and policies defined at the enterprise level and execution at the departmental level.  Governance requires your entire team to pull together in one direction.  Creating and enforcing asset naming standards, for example, can falter if staff doesn’t perceive the value of normalized data and continue to use the well names, they are familiar with.

Your information technology (IT) team is critical to highly effective data governance, but at the end of the day, it is the business and subject matter experts who must own data quality.  IT is the partner who can facilitate and maintain the technology that drives your governance strategy forward and, importantly, ensures those systems evolve as business users take on ownership and responsibility for data assets.

Data volumes are increasing within most E&P’s, both structured data (think production volumes and financials) and unstructured data (think PDFs and scanned invoices).  Does your team have the right strategies in place to manage this flood and ensure decision-ready data is always at hand?  Adding data management complexity are increasing regulations and customer expectations for on-demand reporting while technology and market changes outpace the ability of many E&P’s to respond.

Checklist: Establishing Sustainable Data Management Governance

Rather than taking a reactive approach, oil & gas companies who embrace digital oilfield transformation to eliminate data silos and siloed thinking, have the opportunity to inform strategic decisions with the best information, leading to a more agile workforce, lower G&A costs, and competitive advantage.  The following checklist provides proactive strategies to put your organization on the right data management track.

1. Create the right blend of People, Process, and Technology to enable the organization to leverage data as an enterprise asset.
2. Centralize enterprise strategy with decentralized execution, including the development of standards, policies, and procedures.
3. Focus on specific data sets at the business unit level and their relationship with enterprise data.
4. Enable business stakeholders to take ownership of data with IT as a partner to maintain systems and data management tools.
5. Evolve your processes and tools to advance data consumption as the business takes increased ownership for data integrity and quality.

Over the course of this blog series, I’ve covered a lot of ground, from the 7 signs that your organization is ready to modernize the back office and the cost of doing nothing to software and data management best practices.  For many E&P’s, getting started down the path of digital oilfield transformation can be the biggest barrier.  In my final post, I’ll offer pragmatic strategies for organizational change management, successfully breaking away from legacy software, and sustaining digital transformation.

Chevy Thomason, has over 17 years of experience in data & information management, spending 15 years with Chesapeake Energy, building and expanding enterprise data management disciplines.  During his time, he held various positions from Director – Well & Facility Information Management to Advisor – Enterprise Data Strategy where he was responsible for developing and expanding a data management footprint allowing data to be turned into valuable and trusted information.