Issue: If we share data, other companies will know what we do
This is at the heart of every digital transformation conversation had in every Energy business worldwide. If we let suppliers share anonymised data, won’t people work out it’s really us and have a competitive advantage?
It’s the most circular and often frustrating argument because it doesn’t go anywhere. It’s never said explicitly of course; it’s dressed up in all kinds of corporate bland speak but in essence, each oil and gas company believes that it does something unique and that if those things are shared, it will compromise its operational and corporate USPs.
Other industries, of course, notably the automotive and aerospace industries, have been benefitting from digital transformation and their suppliers having access to multiple sets of client anonymised data for years, which has improved CAPEX and OPEX and is seen as leading the world in good digital practice.
The energy industry is also a close-knit community and people tend to stay in the industry for life. This means that the workforce is continually switching from one of the Big Six to a smaller player, back to another one of the Big Six and so on. There are a large number of contractors in the industry who one day might be working for Repsol and then a few months down the line, are working for Baker Hughes – and so on. Each business will have its own culture and its own nuances, but people also bring their way of working with them too, so there’s a lot of common ground and crossover in working practices. With highly skilled people rarely leaving this industry, thousands of engineers, inspection teams, health and safety practitioners and commercial managers (to name a few) have a really good insight into how lots of their competitors’ work.
It also means the mindset in the industry doesn’t get shaken up a lot – it can be really hard to break into the industry and introduce new ideas. Aberdeen is like a village and if you didn’t grow up here, that can also be a real challenge, although not impossible if you join the industry young.
Equipment and people sharing is the norm; so why is data different?
There are a myriad of Joint Ventures in our industry and that’s done to spread risk. JVs inevitably mean a sharing of people, kit and systems. It seems incongruous that in this respect energy companies are prepared to share risk but feel that sharing anonymised data would somehow compromise their businesses.
Sharing intelligence over common parts is rare. It is hard to understand why businesses wouldn’t want to have the ability to understand whether component ‘A’ works better in cold or humid climates; whether business ‘B’ still needs component ‘Y’ because it has a warehouse full of them, while business ‘C’ is going through that component at a rate of knots but can’t access them through the supply chain. This would benefit both businesses and the others involved in data sharing but is currently just the stuff of blogs!
This lack of data sharing and pooled understanding of the life cycle of different resources is creating huge operational inefficiencies for many. They could be resolved cleanly and efficiently - and improve cash flow, productivity and HSEQ - by sharing anonymised data. By having the big picture on equipment and suppliers, the industry would possess compelling information for improved decision making, enhancing the Oil & Gas industry’s overall financial performance and reputation, supporting carbon reduction and other critical challenges the industry also shares collectively.
The Arnlea model – a secure, contemporary solution
Arnlea offers an all-encompassing service. Before the pandemic, in seven years at Arnlea, I’d had one enquiry about data security. In 2020, I’ve had at least seven. The whole climate created by the Cambridge Analytica scandal and other data hacks has driven those questions. Our data storage is world-class; we use the same providers as most global banks; and so our security is as good as it gets, but this year is a first as people are starting to think more comprehensively about the value and protection of their corporate data in the hands of their suppliers and partners. Who handles their data seems a reasonable concern, which can be understood better if we recognise that not all data is equal. Operational data is far less commercially sensitive than data pertaining to innovation and discovery, for example. Creating a hierarchy of data that can be shared and data that can’t is an obvious way of determining how to take business forward and having a realistic vision of that hierarchy is also vital.
From our perspective, we have no interest in our clients sharing commercially sensitive data. We’re focused entirely on operational data, which is rarely sensitive because it pertains to which components and pieces of equipment are longer lasting or fail more frequently, which is a matter of productivity and expenditure rather than the price of contracts or the latest oil discovery or technical innovation.
If Oil Company ‘A’ has a piece of equipment that’s failed 15 times in three years and Company ‘B’ has the same equipment with similar failure rates, and both are using it in the North Sea but Companies ‘C’ and ‘D’ use it in the Gulf of Mexico with only four failures in three years between them, that’s operational data that suggests the equipment in question is more suited to warmer waters than the cold climate of offshore Aberdeen. That information is valuable to procurement teams who can decide how to solve this issue and both ‘A’ and ‘B’ may take a different approach; either way it’s valuable to both businesses and will impact their bottom line but isn’t particularly commercially sensitive. You may think businesses A and B would know this independently, but this type of analysis is not always prioritised within individual organisations; whereas their inspection software provider, like Arnlea, would be able to provide this as an added value service if each business permitted anonymised data sharing for their operational data.
Summary - It’s time for change, in fact, it’s long overdue.
It’s time for energy businesses to make partners of their suppliers rather than have traditional master/servant relationships and allow their partners to have other partnerships that will also benefit them.
In short, this approach means everyone wins. Technology is more powerful when shared than when used in isolation. Data privacy has to be respected but we don’t need a blanket approach to every piece of corporate data. There needs to be an intelligent and diligent approach that respects the hierarchy of the data – operational or commercial - and allows relevant data to be shared as well as protected. We also need to see the Big Six take that lead and to become pioneers in this area – at the moment, everyone is waiting for someone else to blink first, to the detriment of the industry’s digital transformation ambitions.
The big question is, how long will we have to wait – or has the global pandemic started to shift thinking because of the sudden reliance on tech to make daily business life more manageable? Only time will tell, but make no mistake; the clock is ticking…
Arnlea, the global leader in industrial mobile software for tracking, inspection & maintenance for the global Oil & Gas industry. Learn more about Intrinsix at: www.arnlea.com
Read the latest issue of the OGV Energy magazine HERE.