In a paper developed by the IBM’s Institute for Business Value on ‘Essential tactics to foster innovation in oil and gas’, industry leaders emphasised the importance of innovation within the sector.
It is a space that’s facing numerous challenges around infrastructure, revenue, operations, budgets, regulations and shifting market dynamics. The same challenge lies within the mining industry.
Dr Nkosi Kumalo, managing executive of sales for mining at BCX
Both sectors are facing incredibly complex market demands, difficulties around infrastructure and access to raw materials, and new dynamics around power generation solutions. These industries are expected to juggle everything from compliance to environment to skills to disruption within tight constraints and with increasingly limited budgets.
There are questions that both sectors must however answer. Do they need to innovate around power? Do they need to invest into different types of gas, biofuels or hydrogen? How can they manage the disruption that’s taking place around traditional solutions within the sector? The answer to all these questions lies in innovation.
Innovation is more than just investigating new technologies, fuels and alternatives to existing solutions. It’s also investment into skills that allow for industries to reshape their approaches to resources and infrastructure. The sectors must find ways of invigorating themselves and building a strong skills pipeline that will enable longevity around production. Within this lies the need to build the skills required to leverage technology so that it can change how companies within this industry manage systems and processes.
Organisations can’t afford to ignore the impact that technology can make on key areas such as operations, cost efficiencies and revenue. Technology can use data and analytics to gain insights into consumption patterns and to provide forecasting that can transform investment and strategy. This is critical to any business, but particularly those in the petroleum and mining sectors.
If a company can gain granular insight into user patterns it can potentially visualise how these will play out over the next six months and then it can use this data to change the way processes are optimised. It can align systems and spend with analytics to refine how it approaches different markets and how it manages cost efficiencies. And, perhaps even more importantly, it can help the legacy business become more agile and adaptable in the face of disruption.
There’s a number of diverse start-ups entering this space, start-ups that are digitally native and capable of digging into customer needs and delivering very targeted results. This is a difficult hurdle for many stalwarts in the industry to deal with. They’re dug in, their processes are rigid, and they struggle to embed the culture and agility required to pivot and innovate.
On top of this, the industry is grappling with finding space for innovation. The IBM paper points out that there are four types of innovation that can fundamentally shift the balance within the petroleum (and mining) sectors: product innovation, service innovation, process innovation, and revenue innovation.
These areas are key to the long-term, sustainable growth of the industry. Companies must look to the future to shape their product offerings, their service delivery, and how their strategies are aligned with visionaries like Elon Musk – leaders who are changing the shape of the industry as a whole.
While this may seem a daunting list of challenges and hurdles that have to be vaulted, the truth is that there is immense potential for both industries. It is one that sits on the cusp of change that can allow for innovative shifts in focus and solution and that can potentially change the dialogue around the future. What’s needed, to fully support the sector as it embraces technology and innovation, is partnerships that understand the landscape and the unique needs within it.
Partnerships are key to the future. They can help organisations determine what type of innovation is relevant to them, what areas require investment, and how to leverage technology to create holistic ecosystems for sustainable results. Now is the time to collaborate and create solutions that will redefine the industry alongside the right partners. This is how the sector can innovate and recreate the narrative that currently limits its potential.
About the author
Nkosi Kumalo is the managing executive of BCX Exa. In this role, he is tasked with building capability in advisory and consulting, digital software development, digital integration, data science and insights, robotic process automation and cloud migration services for BCX.
Prior to joining BCX, he worked in strategic business development and marketing roles for leading multinational brands within the FMCG and ICT industries. Kumalo is a well-rounded senior IT professional with strong experience across all technology stacks including Public Cloud, Datacentre, Oracle and Microsoft Licensing, Printing and Imaging, and Endpoint Devices.