Oil Companies Demand Digital Their Way.

The oil industry’s rush to capitalize on digital change has scrambled relations with service providers big and small, giving the oil companies a greater say in the process.

February 15, 2021, By Stephen Rassenfoss, Journal of Petroleum Technology

Oil industry executives surveyed last year ranked the potential positive impact of big data analytics at the top of the list of trends, higher than even changes in oil demand.

That bold conclusion was from a survey by accounting firm Ernst and Young (EY), putting big data analytics among the top trends that could aid business growth in the next 3 years, even above the demand swings that move oil prices.

The survey may have reflected the mood last summer when the outlook for oil consumption looked so weak that cost saving was the only path to better results.

“The survey speaks to a high-level ambition across the operator community to use digital as a mechanism to drive down costs,” said Toby Summers executive director for EY. The promise there is that digital can allow them to scale up operations with fewer hires in good times and scale back with fewer layoffs when the cycle turns down.

These projects also cost less than other cost-cutting options.

“Digitization is one of the cheapest ways to get the business more resilient,” said Patrick von Pattay, a vice president for Wintershall Dea, a Germany-based independent, and chairman of the Digital Transformation Committee of SPE’s Digital Energy Technical Section.

Process changes supported by digital analysis can cost a couple hundred thousand dollars; that is not a lot of money in a business where a single offshore well often costs hundreds of millions.

What is not obvious is who does the work.

The rush to digital has scrambled traditional relationships with oilfield service companies and brought in new players, from Silicon Valley giants to a flurry of startups in the oil business, a few of which have become established players.

As a result of the change in the technology, and the business models of the upstarts, oil company technical teams can and do play a more active role in digital technology development and use than in the past.

Changes began in 2014, when the sudden end of $100/bbl oil forced oil companies to drop their long-time reliance on owning their own computer systems. Oil companies finally joined the decade-old shift to buying data storage and processing as a service from giants such as Amazon and Google. That facilitated digital innovations by centralizing their data, eliminating splintered storage systems that hindered analysis.

The giant looming over the service business now is Amazon Web Services (AWS). The cloud storage arm of the online retail and logistics giant has grown exponentially, doing everything from selling an array of digital tools to promoting a list of preferred energy providers.

Digital newcomers disrupted relations with service companies that had built software solutions and sold equipment programmed using proprietary coding.

Increasingly user-friendly tools for visualizing and analyzing data, plus the ability for smaller companies to buy data capacity, allowed engineers to do more and allowed midsized companies to act like big ones.

“There has been a shift now; the independents have access to the same tech as the big guys,” Summers said.

Those big players, as well as smaller names from the tech and oil sectors, eagerly courted oil companies, selling things based on widely used software languages such as Python.

“What we get from young fresh companies with a great vision, with a great drive to deliver, they are giving us the opportunity to grow beyond the classic service companies,” von Pattay said.

No Commute, But a Worsening Sense of Isolation – New Data from Steelcase Shares the Highs and Lows of Working from Home and Its Impact on the Future Workplace

95% expected to return to the office in some capacity as engagement, productivity and innovation suffer when workers unsatisfied at home

New data released from Steelcase today on the status quo work experience of 2020—which featured the majority of office employees working from home for most of the year—shows just how much it’s costing some businesses in terms of lost productivity, engagement and innovation. According to the report, 41% of workers who work from home frequently are dissatisfied with their work-from-home experience while only 19% are fully satisfied. Experiences and affordances at home vary greatly from worker to worker, which may explain why the data finds 95% of workers expect to return to the office in some capacity. As many companies begin to plan their future work experience, this data can be used to design the future.

The research from Steelcase includes findings collected throughout the pandemic in as many as 10 countries with more than 32,000 participants, including business leaders and real estate decision makers who represent millions of workers. The findings show when people are dissatisfied with their work-from-home experience, it results in a 14% reduction in engagement, 12% drop in productivity and 6% decline in innovation—factors that can hurt a company’s bottom line. Many workers also reported a drop in quantity, quality and consistency of work. These impacts could equate to a 5% average reduction in profits for large companies.

“The pandemic has reshaped many aspects of our lives, including where and how people want to work,” said Gale Moutrey, vice president of workplace innovation, Steelcase. “Their experiences working from home, and what they face when they return to the office, have influenced what they want and expect to see in the workplace going forward. Our data shows the majority of workers want to return to the office and their experiences during the pandemic will provide the guidance for a new, better work experience.”

Steelcase’s research uncovered several benefits and challenges among people currently working full time from home, including the following in the U.S.:

  • 37% report a worsening sense of isolation
  • 20% report a drop in their productivity
  • 20% report a drop in their engagement
  • 35% enjoyed not commuting
  • 25.7% liked the ability to focus
  • 20% are experiencing a worsening speed of decision making
  • 16.5% have worsening work-life balance

Poor work-from-home setups are among the many factors contributing to unsatisfactory work-from-home experiences. For example, 36% of workers lack a place free from distraction and 28% do not have a physically comfortable workspace—instead toiling from their bed or couch. Nine percent of workers consistently work from their beds. All workers are not facing the same challenges, however: 75% of directors or above always or almost always work at a desk and 46% have an ergonomic chair. Among individual contributors, however, just 48% work at desks and 24% have ergonomic chairs.

“Our research shows that people want and expect to go back to the office, but they want a space that is safe, comfortable, inspiring and productive. They also want more control over where and how they work,” said Moutrey. “This data will help leaders design workspaces that are flexible, resilient and support the new ways people want to work.”

As organizations consider the future work experience for their people, more flexible policies appear to be the norm. Only 5% of organizations expect to work from home full time, up just slightly from 3% before the pandemic. Nearly a quarter will name the office as the primary work location, while the vast majority, 72%, plan to take a hybrid approach of working from both home and office with greater flexibility. Many organizations are also exploring satellite or coworking spaces closer to where workers live, which may be in response to positive reactions to a lack of commute.

Additional data from the Steelcase report will be released in the coming weeks and contain data on workers’ new needs and expectations, four major workplace shifts on the horizon and new principles for the future of office design. 

About the Research
Since the onset of the pandemic, Steelcase has committed to conducting ongoing research to help organizations understand what is really happening to their workforce and the impact it is having on their business. The Steelcase data includes findings from eight qualitative and quantitative primary research studies. This work was designed to measure the impact the COVID-19 pandemic has had on work, workers and the workplace. The studies were conducted in as many as 10 countries and have included more than 32,000 participants around the world using methodologies based in the social sciences.

About Steelcase
For over 108 years, Steelcase Inc. has helped create great experiences for the world’s leading organizations, across industries. We demonstrate this through our family of brands – including Steelcase®, Coalesse®, Designtex®, Smith System®, Orangebox® and AMQ®. Together, they offer a comprehensive portfolio of architecture, furniture and technology products and services designed to unlock human promise and support social, economic, and environmental sustainability. We are globally accessible through a network of channels, including over 800 Steelcase dealer locations. Steelcase is a global, industry-leading, and publicly traded company with fiscal 2020 revenue of $3.7 billion. For more information, visit www.steelcase.com.

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