Thanks to the digital transformation (more on that in a moment), you’re already awash in data; what’s to discover? Maybe a submarine is the better metaphor, but for now, think of your company as sailing on a river of uncharted data, trying to find the tributary that leads to your business goals.
Or something like that. Anyway, this industry already produces data as efficiently as energy, and, in the opinion of the World Economic Forum, digitalization is a new era for oil and gas. So says their recent white paper with Accenture on the subject, which observes:
“A wave of digital oilfield initiatives swept through most of the industry in the 1990s and the early part of this century. However, for most of this decade, the industry has not taken advantage of the opportunities that derive from using data and technology in a meaningful way. A single drilling rig at an oil field, for example, can generate terabytes of data every day, but only a small fraction of it is used for decision-making. As other capital-intensive industries (such as aviation and automotive) have revolutionized their business and operating models through a holistic application of digital technologies, the opportunity for the oil and gas industry to leverage the transformational impact of digitalization has become more evident.”
Show us the money. The paper includes a value analysis that identifies the benefits of digitalization to the industry, its customers, and society more generally, over the next decade (2016–2025). Key findings include unlocking approximately $1.6 trillion of value for the industry, its customers and wider society.
Beyond the potential to create around $1 trillion of value for oil and gas firms, digital transformation in the industry could create benefits worth about $640 billion for wider society. This includes approximately $170 billion of savings for customers, roughly $10 billion of productivity improvements, $30 billion from reducing water usage, and $430 billion from lowering emissions. Environmental benefits include reducing CO2-equivalent (CO2e) emissions by approximately 1,300 million tonnes, saving about 800 million gal of water, and avoiding oil spills equivalent to about 230,000 bbl of oil.
But wait, there’s more. This total estimated value from digitalization can further increase to $2.5 trillion, if existing organizational and operational constraints are relaxed, and the impact of “futuristic” technologies, such as cognitive computing, is considered (although the paper notes that there is insufficient evidence to make a definitive value assessment at this time).
That’s a lot of money in anybody’s neighborhood. So, how does one get from spreadsheet to bank deposit?
The answer is obvious. Actionable intelligence has to be extracted, of course. Not quite as obvious is exactly how. But, not to worry; clever companies, working in their own extraction industry, are riding to the rescue, with visualization tools for just that purpose. “Discovering data” is a term used by one of them to describe what they do. In the past decade or so, data visualization has gone from the 3D bar charts of Excel infamy, to highly sophisticated tools, practically off the shelf and in a shrink-wrapped box, usable by those with no more than a learner’s permit in data analytics.
TIBCO Software describes its visualization tools as offering a colorful collection of capabilities, such as “AI-driven data mashup” (text-mining algorithms to automatically discover and infer hidden relationships among tables, documents, concepts and sentiments in data), “data wrangling” (a term that conjures images of William Gibson’s “console cowboys”) and the ability to search and find new data “auto-magically” (in byte-head patois).
Tableau Software is another company that wants you to spread beyond the spreadsheet, whose deficiencies are noted in the company’s own recent white paper: “For many, Excel is the go-to analysis tool of choice. As useful as it can be, for delivering real insight from big data, spreadsheets simply won’t provide all of the answers you seek. Trying to use spreadsheets for advanced, responsive analytics, or analyzing large volumes of data, is using the wrong tool for the job. Too often, mistakes are made at the expense of efficiency, accuracy and hours of lost time.”
It goes on: “In today’s marketplace, the basic, built-in charts and graphs are just table stakes, and the real data wins are found in multiple types of advanced visuals.”
Nicely put. And, we go on, by adding another company to this far-from-comprehensive roster. Qlik offers a suite of data analytics tools that include what they say is the world’s most powerful associative data indexing engine. One of its capabilities is claimed to be analysis of “data in gray”—data that isn’t related to a current analysis, but which may offer additional insight.
As McKinsey & Company recently noted, “One hot term gaining traction in the analytics world is ‘democratization.’ Getting analytics out of the exclusive hands of the statistics gurus, and into the hands of a broad base of frontline users, is seen as a key building block for scale. Without needing to know a single line of coding, frontline users of new technology tools can link data from multiple sources (including external ones) and apply predictive analytics. Visualization tools, meanwhile, are putting business users in control of the analytics tools by making it easy to slice and dice data, define the data exploration needed to address the business issues, and support decision-making.”
This subject bubbles up regularly, because it’s a big deal, and not just for big companies. The costs of storing and manipulating data are falling fast, which is leveling the playing field in many industries. Think of Big Data as the shale play of information technology.
We live in interesting times.
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