Simon Montague

Laying the Foundation for Digital Business Transformation

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The market is moving quickly, and we are constantly being tasked with improving on performance to drive better results and justify our positions.  To do this we need to bring in digital technologies to facilitate every aspect of the business, and gather data for analysing performance and finding areas to improve.  This goes for everything in your business eco-system: supply chain, customer journeys, back-office support functions, processes, IT estate, and all cross-functional activities.  Your competitors are working on this, to varying degrees of success, and you also need to.

With so many projects to work on, and potential investments to make, how do we make sure our digital transformation is successful?  And provides the quick results that shareholders and stakeholders demand?

Here’s three steps you can do to lay the foundations for successful digital transformation.

Understand your current landscape and digital technologies

Before bringing in new digital tech, you need to know what you have already, where the gaps are, and what options are available.  Each functions’ digital requirements will be evolving constantly, and some can be met with the existing set up.  Accurately document your enterprise architecture starting with the IT and process landscape and ensure there is alignment with organisational goals.  This will provide visibility on the areas for improvement and the impact of bringing in new digital technologies, and allow you to plan for training programs and transformation activities.

Identify key areas for digital transformation

Digital solutions should support the exchange of information between all people and “things” in the business eco-system.  All productive processes should therefore be digitally supported, be an organisational part of the enterprise regardless of geographic location, and the ability to exchange information in execution of a process should be available at all times and in all places.  Customer journey maps, capability models, and gap analyses developed as part of your enterprise architecture will enable you to identify key areas for digital transformation.

For example, the new “Digital Hospital” in Denmark has used its enterprise architecture to understand how all people and “things” should link up.  The digital hospital has visualised the elements required to support core services such as treatment of patients, and non-clinical logistics,and mapped the knowledge that needs to be transferred at each step.  The correct digital technologies to support the knowledge transfer can then be identified and introduced.  In this case, it includes the introduction of robots in storage areas to ensure that delivery of correct materials is never more than 20 metres from physicians, and mobile registration for log books.

Create a Collaboration Platform

Digital transformation requires buy-in and cooperation from people spread across all areas of the business.  The main reason for failure in transformation projects is lack of commitment from stakeholders. Everyone needs to understand the impact of digital transformation, and how to ensure it aligns with overall goal of the organisation, reasons for change, and what they need to do to contribute.  A simple web-platform that provides this information in an easy to consume format, with alerts for outstanding tasks can ensure that people stay on top of transformation tasks and remain committed to the end result: a modern digitally enabled enterprise.

These steps will allow you to optimise the use of current resources, mitigate risks in digitalisation, and ensure cross-functional teams collaborate on your digital transformation.

How IT Can Enable Oil & Energy Firms to Survive the Oil Price Slump

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Many firms in the oil sector are struggling due to the steep drop in oil prices.  Across the sector there has been a reduction in investment, and in many cases downsizing.  Planning for the future in these times can be tough, and changes need to be made in order to survive.  However, some firms are not only working on surviving but also putting themselves in a strong position to capitalise on opportunities when oil prices eventually rise and stabilise.  Furthermore, these firms are also making big changes towards digitalisation, and modernising the way they do business in spite of the slump.

Oil & Energy firms, both upstream and downstream, are typically highly complex.  Equipment, assets, process, systems, applications, broad webs of suppliers and customers, and a large and varied workforce are integral to keeping everything running at a profit.  Regulatory requirements are not getting looser but tighter, this all adds the huge running costs which do not get lower as the oil price does.

However, there are opportunities to be exploited.  The big question is how?

Align Business & IT

Oil & Energy enterprises will typically have thousands of applications, and the associated infrastructure to run and host these systems.  Therefore you should start by creating a common enterprise model accurately showing how IT systems support business processes and identify the need for process information and data.  From there, you can define the key applications for development and maintenance, and importantly, identify redundant and overlapping applications to be phased out.  This allows the enterprise to focus investments in the right areas.  Through this process, we’ve seen oil & energy enterprises save millions of dollars annually in support & maintenance costs.  Furthermore, it will allow you to focus important resources on developing a modern, digital enterprise architecture.

Adapt to New Digital Technologies

The downturn has brought forth many new technologies designed to improve efficiency and reduce costs. And they have already started making an impact.  Your firm will be looking into or already implementing new automation technologies, exploiting big data, or bringing in customer focused technologies such as multichannel marketing platforms.  Capital projects will still be a large feature, and ensuring all these projects run on-time and on-budget is not simple.

In order to bring in these new technologies successfully, different stakeholders and cross-functional teams will need to see how the solution fits with the current organisation, the changes that need to be made, understand the impact of change to mitigate risks.  Take your enterprise model and publish this to the web so everyone can see it.  Ensure those involved in change can access all the information they need to facilitate the transformation, and provide a platform for all parties to collaborate.

Set up for Rapid Reaction to Market Change

If the oil market picks up in the next 12-18 months, you need to be in a position to react rapidly to changes.  A well-defined company architecture, aligned to corporate goals will allow the organisation to react quickly when the time comes. This should include each employee having access to all the information they need to do their job, get trained, and understand how they fit into the wider context.

With the slump in oil prices continuing and no concrete timeline for when it will improve, can you afford to sit tight and hope for the best?  Or is it time to visualise the changes you need to make, and work together to transform your business?

Take a look at how Statoil save millions of dollars in annual IT maintenance, support and development costs through aligning IT and business.  Also at GKN/Volvo Aero, the savings were in excess of $1.5million a year.