Speaking at the Reuters online Petrochemical Development USA 2020 event, Shell’s Claudia Zuluaga who is principal digital product manager, outlined the impact of the fourth industrial revolution that is transforming how companies operate. The oil and gas industry is undergoing a double transition, both digital and energetic. Navigating both of these in the context of corona is particularly problematical. Corona is now the single biggest catalyst for digital transformation which is ‘no longer an option’. Now more than ever, companies need to adopt digital even faster.
Zuluaga offered three critical success factors for the digital transformation. Number one is ‘connections’ with customers/teams/groups. We are all creatures habit with our own ways of doing things. People need to be convinced that they will benefit from the transformation. Shell uses a ‘customer-centric’ approach as opposed to the traditional product-focused method. This has the advantage of being harder for others to imitate and preserves Shell’s competitive advantage. Next up is digital literacy. The lifetime of digital skills is getting shorter and shorter. Today’s ‘university of life’ can teach as well as traditional schooling. Training engineers in digital literacy creates a level of understanding that eases the transition and reduced burn out. Finally, leadership by leaders who are prepared to put themselves in other peoples’ shoes.
The methodology leverages what we have seen elsewhere described as ‘agile’ with minimum viable products developed in months at a cost of thousands of dollars. These are rolled-out until a ‘tipping point’ of take-up signals viability. At which point, major resources (in the million-dollar range) are devoted to develop a sustainable product and to embark on a multi-year journey. The whole process can be iterated, ownership handed over to business leaders, and the new tool baked into the digital transformation.
In the ensuing Q&A Zuluaga offered some more observations on the digital transformation within Shell. There are some obstacles. Connections can be hampered by resistance, by a lack of data infrastructure, and by poor support from leadership. Budgetary support is sometimes an obstacle. Hence the importance of educating people in digital literacy, with trainings for all, from operators to execs. Shell has also developed a rigorous process for project selection and deployment. All transformation initiatives require an economic model to be built demonstrating expected monetary benefits. Without demonstrating the potential value of a project, ‘perhaps it would be better not to do it’. This has created consciousness within Shell on cost preservation.
Zuluaga was asked how Shell handles customers who may not have a high level of digital literacy. Zuluaga has customers in finance, retail and across the supply chain. Some are eager to start, others less so. An extensive conversation is needed. The ‘What’s in it for me?’ question can be hard to answer. Developments can pivot into something very different from what was envisaged. Flexibility to pivot quickly is a good thing. The old product-centric approach may make this seem easy. Our customer-centric technique may be harder, but it is worth it. Automation requires new skills and new ways of working in a knowledge-rich environment. Zuluaga did not envision any job losses resulting from AI and machine learning, ‘people are more enthusiastic to embark on the journey - across all levels in the company’. Execs and operators are trying to understand the basics of coding in Python. Operators and engineers need to be a central part of a digital development. Subject matter experts need to be at the center of a project, and they can learn the new ways of working on the job. But a new mindset is required for rapid development. A minimum viable product should be developed in 3 months. Things are not going to run at the same speed as in the past.
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