Digital-Transformation-in-Oil-and-Gas

Digital Transformation in Oil and Gas Industry

The oil and gas business is a volatile one, prone to volatility due to global fuel prices or regular regulatory changes. Furthermore, it is continuously confronted with unpredictably fluctuating demand and supply. In this business, digital technology, particularly ERP systems, assist in gaining insight to critical processes and gaining access to remote portions of the supply chain by offering a bird's eye view of all processes, operations, and tracking the availability of resources in real time.

From the oil well to the gas station, the digital framework is a critical link in the global operations and supply chain. As a result, many digital projects have a huge potential for increasing efficiency and lowering expenses. Individual digital initiatives, on the other hand, will not provide significant results. Oil and gas firms require a solid core ERP system. The oil and gas business is huge, and it is impossible to lump it all together under one large roof. It is necessary to assess the sub-sectors within the oil and gas business in order to better grasp the digital transformation.

Oil and gas firms have long used technology, both physical and computational, but they have been slower to accept the latest wave of digital transformation than corporations in other industries. Many companies lack a comprehensive digital strategy, key competences, and precise action plans. Oil & Gas digitally changes businesses by collaborating with them to create more linked, smart systems that harness data and enable their frontlines to make a big, long-term effect. We provide cutting-edge solutions with world-class digital strategy, processes, tools, and skills that help energy firms succeed now and in the future.

Upstream Oil and Gas Industry

Upstream Oil and Gas is concerned with the drilling of crude oil and the transportation of crude oil to refineries. This is an asset-heavy industry with operational challenges of extreme and often hostile work environments. Companies operating in the upstream Oil and Gas sector require an ERP that can cater to various scenarios of fixed asset management and procurement, as well as accounting treatment, which includes ensuring the accounts reflect the appropriate book value based on a variety of depreciation methods.

Second, because upstream Oil and Gas companies lease assets, they should be able to comply with the new lease accounting guidelines and its local variants. An ERP with the functionality to support these scenarios is critical for the upstream oil and gas industry's digital transformation. Several activities in the sector are project-based, and these project activities adhere to a well-defined "Authorization for Expenditure" or AFE process in which every project-related cost is tracked against a specific AFE . So, what companies in this industry require is an Oil and Gas ERP system that includes features such as multi-stage budgeting, item and service level planning, budget approval workflows, capitalization of AFE, issuing materials to wells, managing item conditions, and much more.

Downstream Oil and Gas Industry

Downstream Oil and Gas is responsible for transporting the various products and byproducts of the crude refining process from the refinery to the end customer. This segment of the Oil and Gas value chain is focused on blending, terminal operations, distribution, and retail, all of which necessitate the use of an ERP system capable of supporting these processes. Inventory visibility across the supply chain from retail outlets to terminals is one of the most critical aspects of the downstream Oil and Gas industry.

A downstream Oil and Gas company would require an ERP that can support various terminal activities ranging from providing visibility on terminal inventory while accounting for variations in product volumes due to ambient temperature to managing bills of material and recipes for various blending operations. Finally, pricing, billing, and managing customer loyalty programmes are critical processes in any downstream Oil and Gas business, and the ERP should be able to support all of these processes through a comprehensive pricing module, which enables companies to perform complex calculations and publish pricing based on a variety of external factors and statutory or taxation requirements.

Digital Strategy in Oil & Gas

Digital is projected to upend traditional business models by radically altering the scope of operations and their economics, as well as allowing new companies to emerge. The competitive dynamics of the relevant ecosystems will be altered as a result of this disruption. Companies often struggle with the complexity of these developments, according to our work with leading firms. Companies must do the following to reap the benefits of digitization, mitigate dangers, and capitalize on disruptions:

Examine how they'll fit into the digital ecosystem.

Determine which partners they will need to collaborate with.

Determine and learn the skills they will require to be successful.

Oil & Gas combines industry knowledge with a systematic approach to help leaders ensure how digitalization is changing the industrial ecosystem and determine the best course of action for their specific scenario. DoFort assists in defining the digital vision, developing new products and services, transforming core companies, and laying the groundwork for full-scale digital transformation. When establishing an organization's road to digital success, we use a comprehensive knowledge of digital transformation to guarantee that all needed elements are covered and no stone is left unturned.

The oil and gas business is a newcomer to the digital transformation arena. Whether in the upstream or downstream sector, the industry has been under constant pressure to join the digital revolution bandwagon, and it's only recently that they've begun to open up to emerging technologies such as Artificial Intelligence (AI), drones, Robotic Process Automation (RPA), Machine Learning (ML), and the Internet of Things (IoT). Both divisions of the industry will be able to benefit from the use of cutting-edge technologies.

In the aftermath of the pandemic and with oil prices at an all-time low, businesses have had to rely on their digital assets to stay afloat. Within the oil and gas industry, there is a growing push to improve sustainability. When this is combined with the desire to increase profitability, improve decision-making capabilities, and maximize workforce productivity, a robust digital framework incorporating RPA, IoT, and ML, as well as the use of drones, becomes an unavoidable requirement.

Summary

Accepting new technology is no increasingly more accessible; rather, it has become the norm. While the oil and gas industry has had a sluggish start, the time has come to act. This is an opportunity for organizations to scale their operations and make a market impact. With technology becoming more affordable, all these businesses require is a clear road map to make the implementation process less time-consuming and more efficient. DoFort ERP offers all of this and much more to Oil and Gas companies.

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