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Energy

Innovate to renew the energy of oil and gas.

 

E.G. Nadhan, Chief Technology Strategist (Central Region), Red Hat

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.

Simplifying technology to energize the business.

E.G. Nadhan, Chief Technology Strategist (Central Region), Red Hat

Perhaps it is with good reason that Super Bowl 51 was held in Houston, Tex., the nerve center of oil and gas companies with several key enterprises that drive the dynamics of the energy industry at large. The manner in which the game took a different turn all the way into the third quarter is quite symbolic of the ups and downs experienced by oil and gas enterprises over time.  “Who is the winner,” you ask? Well, in the Super Bowl of oil and gas, the winner is the company who has a laser focus on the business of oil and gas while taking steps to simplify the underlying technology infrastructure. Every company might be a technology company – but technology is not the core, differentiating competency of the enterprise.  Remember the call to action not that long ago: “Houston, we have a problem! Let’s innovate IT!?” Building upon the concepts outlined by Geoffrey Moore, it behooves oil and gas companies to grow the context (IT) by leveraging innovative technology solution providers while innovating the core business of oil. In other words, it is time that this industry simplified information technology to energize the business.

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In this blog post, Red Hat business development manager Dave Montana asserts that containers can help energy, oil and gas companies accelerate adoption of cloud-based, high-performance computing. At the same time, Montana is also advocating leveraging the solutions that are already available to inject the right level of automation to simplify the construction, validation, deployment and ongoing management of the enabling infrastructure. Simplification is a fundamental tenet as well, through ruthless modularization of the technology components.

Going back several decades, there was a time when goods used to be shipped in all shapes and sizes without any standardized “containers” which made the manual loading, unloading and distribution of these goods chaotic, to say the least. And then came this wonderful concept of standard rectangular shaped containers that simplified — and automated — the same process. Packaging companies cared more about what went inside the containers while the distributors standardized and automated their own process. It did not matter to the distributors what was inside the containers whether it was by land or sea.

When Montana says that “containers can help accelerate adoption …,” that is exactly what he is referring to. Except that in this case, the goods being distributed are software code segments. The inherent complexity of these code segments simply does not matter anymore to the technology teams — whether they are the application developers or the operations team. They can also easily stand up or decommission these “containers” as needed to address varying business demands.

If containers simplify the underlying technology, what does that allow oil and gas companies to do? They can focus on the insight generated by the data using the high-performance computing environment. They can strategize and analyze various scenarios for increasing efficiencies in their core business of bringing oil from rock to pump.

Not that different from how the New England Patriots quarterback Tom Brady adjusted his own strategy in the third quarter. I am no quarterback but it was clear that the shifts that Brady exercised made all the difference. While continuing to retain his laser focus on his own business of charging ahead 10 yards at a time, he initiated changes that positioned the Patriots to make the historic comeback. Competitive oil and gas companies looking well ahead into the fourth quarter (long-term) can make the strategic timely choices to simplify their technology platform.  Other companies may perceive some short-term gains only to experience business disruption in the end zone by … you said it … technology!!

Victory in football, for sure, can be very sweet in Houston! Just ask Brady! And about simplifying those technology shifts, just ask Montana!