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IoE-Powered Business Transformation Boosts Agility and Efficiency for Oil and Gas Companies

This week I’m attending CERAWeek, the premier international gathering of energy industry leaders, experts, government officials, policymakers, and innovators. While this is the 34th annual CERAWeek conference, the mood is definitely not “business as usual.” The disruption and uncertainty created by plunging oil prices and shifting market dynamics has created the urgency throughout the industry to rethink strategies and adopt connected technologies to spur operational efficiencies.

But disruption can also create opportunity. Forward-thinking oil and gas (O&G) firms see today’s turbulent market as an opportunity to gain competitive advantage by harnessing new technologies. For example, in the Eagle Ford region in North America, improved drilling technologies are now enabling oil rigs to produce 18 times more efficiently than in 2008, and 65 percent more efficiently than in 2013.

A new study by Cisco highlights the opportunity to achieve even greater efficiencies through transformed business models and digital technologies powered by the Internet of Everything (IoE)—the networked connection of people process, data, and things.

With IoE, oil and gas firms have the opportunity to make IT services a commodity in the business, creating the potential for dramatic cost reduction and improved operational efficiency. The illustration below shows several ways O&G operations can benefit from connected technologies. To achieve these benefits, however, they will need to bring together both the IT and the operational technology (OT) sides of the business. Our survey indicates that oil and gas firms have a long way to go in breaking down the barriers between IT and OT. In fact, only 41 percent of respondents “completely” or “somewhat” agreed that their firms’ IT and OT strategies are aligned.

OandG_Digital_Tranform_01

Source: Cisco, 2015

Here are some examples of how IT-OT convergence can impact the areas of data, collaboration, and cybersecurity: Read More »

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Summary: A New Reality for Oil & Gas

An excellent post from Mike Riegel talks about how things have changed between the Tech industry and the Oil and Gas Industry over the past 20 years. The conversations he once had with his father-in-law who was at Mobil Oil have changed dramatically since the nineties. Oil companies are now  ‘Digitizing':

  • The Digital Age has come to the Oil industry, and despite the current downturn, the most visionary companies  will have the opportunity to transform their business models for future growth.
  • The recently released report: “A New Reality for Oil & Gas – Complex Market Dynamics Create Urgent Need for Digital Transformation” makes it clear that the move to a Digital Business and the adoption of Internet of Everything is the way forward for the industry and for the global economy.
  • IT and OT (Operational Technologies, sometimes called Automation Control Systems/ACS or Industrial Control Systems/ICS) need to become more aligned out of their silos.
  • Biggest issue the industry faces is the ‘data-deluge’ – there’s a need to do deal with sensor and other data both in real-time at the source (usually the edge of the network) and that stored away in huge historians. Analysis of historical and real-time data is an imperative.
  • The US is well positioned to be the ‘swing-producer’ in the market as a result of their agile adoption of IoE, and the successful companies will take advantage of the market dynamics to invest, whilst others will cut costs, investments and retrench, falling behind. This week at CERAWeek we’ll hear from Marcel Cappetti about that (Wednesday at 11:20 AM).

Check out the full post from the IoE Blog channel here:

20 Years Hence – What Do Oil, Dating, Digital, and Analytics Have In Common?

Mike will no doubt get feed back from his father-in-law this weekend and hopefully we’ll get a report back!

As always, let us know what you think!

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A Turning Point for Oil and Gas: Managing Through Turbulence to Digital Transformation

This is a big week for the global energy industry, as thousands of energy leaders, experts, technologists, and policymakers gather in Houston, Texas, for the 34th annual CERAWeek conference, the premier international event for the industry. As a corporate sponsor of the event, it’s also a big week for Cisco.

Just last week, Cisco released a new report focused on the need for digital transformation in the oil and gas industry. Based on a survey of oil and gas executives, analysts, and consultants in 14 countries, the paper validates CERAWeek’s “oil day” theme, “Turning Point for the Oil Industry.” For forward-thinking oil and gas companies, the price volatility and turbulence in the market could represent a turning point toward true digital transformation. Read More »

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Focus Magazine Explores the Future of Energy

If you could look into the future and get information about when your car might break down, or your water heater leak, you would probably find it very helpful. The information would allow you to take care of any potential problems before they actually develop. Many industries are now taking advantage of this kind of predictive knowledge, made possible by sensor technology, which allows for remote monitoring of assets. Read More »

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Manufacturing Customer IoE/IoT Globe Trotting: Part 1

From my home in North Carolina to San Diego, to Atlanta and all the way to Greater China—Shanghai, Shenzhen and Taipei—throughout April, I am presenting at several Manufacturing industry, Supply Chain executive, and Internet of Things (IoT) regional events, along with visiting all types of manufacturing customers. Earlier this month, I was at a customer advisory where we met with industrial thought leaders eager to share experiences (see Tony Shakib’s blog, “The Digital Factory: Real Solutions and Real Outcomes”). In the meantime, several of my colleagues exhibited Cisco industrial solutions this past week at Hannover Messe in Germany. Across the globe, manufacturers are wrestling with how to capture the opportunity and value associated with IoT and Internet of Everything (IoE) strategies. The good news is that the industry is thriving, alive and well and at the forefront of IoT adoption.

At the IoT Regional Forum in Atlanta last week, I had the opportunity to meet some manufacturing companies from the region and hear first-hand the challenges and address questions they had regarding automation and networking and the convergence of IT and OT, from technology to culture to organization. What I hear repeatedly are questions on how to tie together the various islands of automation and information that exist throughout most factories and across manufacturing enterprises. In addition, the lack of one integrated view results in delayed decision-making and responses to issues and problems that arise, and inhibit the introduction of new products and business models.

Often, we will assist our industrial customers with this IT/OT convergence by recommending a pilot or proof of concept approach to adopt wired-and-wireless networking architectures for use cases that demonstrate quick results and impact, and then more broadly adopt the technology across that and other plants within the enterprise. Interestingly, ARC analyst Greg Gorbach recently wrote up a blog proposing a “Let’s Just Try it” approach in profiling our customer Stanley Black and Decker.

Read More »

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