The Legacy Software Stranglehold: How to Break Free, Shrink Costs, and Do More with Less – Part 4

Part 4 – Successfully Starting and Sustaining Digital Oilfield Transformation

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

There are two big organizational hurdles your team must overcome to achieve the prize of a digitally enabled culture capable of hitting higher targets with a lean team and lower costs.  Recall that CFO I talked to in my first blog?  She walked away from a proven playbook that could have saved her team millions while simultaneously boosting business performance.  That first hurdle is the entrenched mindset at many E&P’s that the timing for a digital transformation initiative is never good because of the lack of enthusiasm in the back office and a workforce that prefers the road even if it means doing things the old, manual, and painful way.  That workforce has been hit time and again with bust cycles.  The last thing that they want is the uncertainty, disruption, and additional workload that many believe will result from digital transformation and process improvement.  For energy companies that can overcome this resistance to change, the final organizational hurdle is managing that change and understanding that digital oilfield transformation is not a project, it is a continuous process that must be built into your organization’s operational DNA.

In my final post in this series, I’d like to present several strategies for effectively starting and sustaining the technology and organizational transformations that together transform the business and the way your team uses and thinks about software and data.

Owning the Digital Transformation Playbook

I can’t just walk into a board room and throw down a playbook for modernizing your technology and data management and expect success.  That playbook has everything your team needs to know specs for a unified application architecture that encompasses land, accounting, production, and regulatory, plus a roadmap for rapidly delivering quality datasets to decision-makers.  To succeed though, your team must own the digital transformation strategy with executive sponsorship in the journey that does not falter.

There are many misconceptions that digital transformation is just about a technology upgrade, a one-off project.  The train never stops moving through and neither should innovation and process improvement (evolution is a more apt term) to continuously transform the business and open up new opportunities for cost and operational efficiencies.  Digital transformation is indeed business transformation, which impacts an organization’s culture, business and technological processes, business applications, and content (structured and unstructured).

The digital transformation journey starts with an enterprise vision to ensure trustworthy and higher quality data to make quicker and more informed decisions. For example:

VISION = As we continue to grow our company, we are focusing on our ability to scale the business, eliminate redundant costs, and increase cash flow

Execution is everything.  To grow you need to leverage technology and automation to scale the organization and create turnkey future acquisitions.  Your team must embrace data as a strategic asset and be able to access, use, understand and trust data across every business function from the C-level to the front line.  Ensure accountability/ownership for data assets and eliminate time spent duplicating data entry so that time is spent on more valuable tasks.

Failing to effectively manage your team’s knowledge is just as bad as failing to manage capital allocation.  E&P’s have become disciplined with the latter and as an industry, we need to shift our mindsets that there is also a reservoir of intellectual capital that must be carefully maintained for organizations to succeed in the digital oilfield.  This includes continuously refreshing digital skillsets and ensuring that every member of your team knows how to get the most out of their software and data.

Checklist: Setting Your Team Up for Business Transformation Success

Organizational change management is the top success factor for delivering the business results the energy C suite expects from digital transformation, i.e., the ability to grow and outperform peers with lower costs and a lean team.  In my experience, however, change management is almost always the first budget to be slashed when digital transformation initiatives fail to show early results.  Stay the course.  Center your digital oilfield transformation around change management along with the other strategies listed below.

  1. Assemble a dedicated team of people to manage the roadmap and organizational change.
  2. Ensure that your change management team and super users have dedicated time to the transformation.
  3. Provide quick wins along the way to show incremental and steady progress against bigger efforts.
  4. Establish KPIs at the enterprise and department level and measure progress to link value to specific activities.
  5. Keep an eye on the ‘prize’ through continuous innovation, data governance, and executive sponsorship.

Standing Still is the Fastest Way to Move Backward

I began this blog series with a checklist of 7 warnings signs that your E&P organization is ready for digital and business transformation, including hidden software costs, poor support from your vendors, and waiting on data that is plagued with inconsistency, inaccuracy, and multiple versions of the truth.  Then there are the wakeup calls, the proverbial hair the broke the camel’s back.  Your team might find yourself in the midst of a major acquisition only to discover that your current oil & gas software, data management, and processes are limiting growth.  Or perhaps you have an existing, somewhat outdated ERP and the vendor is forcing you to upgrade to a different version that entails massive capital outlay and long project timelines.  There are many ways your team can suddenly have an awakening that change is needed, but don’t let it turn into a 9-1-1 call.

Be proactive and confident in your team’s ability to successfully move forward with a modern technology stack and data management best practices.  A down market is good timing to invest your time and resources, ensuring that a solid digital foundation is in place and positioning your organization for growth on the upswing.

Over the course of my posts on breaking free from legacy software, I have offered additional checklists for knowing what to look for in a modern, unified oil & gas software platform and the data governance best practices that will set your team up to achieve higher performance, efficiently scale, and reduce technology and G&A costs.  Now it’s time to put those strategies into motion by getting started with your own business transformation and, most importantly, sustaining the benefits into the future. I encourage you to reach out with any questions you’ve had during this series.  And if your team needs help, the Novus Consulting and W Energy Software teams are here to simplify and accelerate digital oilfield transformation.

Chevy Thomason, Founding Partner, Novus Consulting Chevy Thomason, 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.

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