November 1, 2023
As the oil and gas industry continues to evolve, it is important for companies to focus on stabilizing and maturing the critical data and processes that have been historically managed inconsistently, in siloes or have been pushed together through acquisition and divestment (A&D) transactions. This is critical due to the tight timing constraints and cyclical dynamics that oil and gas companies face.
It is essential to practice good data management on an ongoing basis to ensure high quality data is available for decision making. Data models and data science outputs are only as good as the data that is inputted. There are no shortcuts when it comes to good data and therefore, good data management must be consistently practiced to achieve differentiating value from data.
Data integrity is vital for organizational success, and this is achieved by fixing problems in a business domain, communicating the successes, rinsing, and repeating. It is important to note that data governance should not be overbearing but rather, just enough. Focusing on collective priorities "what problem does the business need to solve” should be prioritized before “what individuals might want to have”.
Data must be operationalized to be used effectively in organizational processes. By operationalizing the data, organizations can identify and focus on critical data issues that have the potential to directly impact financial statements or business operations.
In addition, it is important to have the right people, alignment, and an effective operating model. C-suite sponsorship, a cross functionally advisory/decision making board, dedicated resources focused on the continuous improvement efforts and business facing SME’s who know the data in and out are essential for success.
Cultural change is also a crucial factor and can be a heavy lift. For assorted reasons, it is often grossly underestimated and under planned for. Changing behavior takes ongoing, intentional focus and TIME to evolve and flourish. Think about it from the lens of two types of change: first order change (what we do) and second order change (who we are). The first order change is a behavior change only and is reversible and temporary. The second order change is an internal change and is permanent.
First-order change is like putting a band-aid on a bleeding wound. It is superficial, just addressing the surface-level issues without really digging deep.
It is like rearranging the furniture in your office or giving your website a fresh coat of paint. It may make things look different for a while, but trust me, the underlying problems are still lurking around. Now, second-order change is where the real magic happens. It is all about those transformative shifts. We are talking about changing deep-rooted beliefs, systems, and processes. It is like reconstructing your whole office building from the ground up, or completely revamping your business model. It takes guts, time, and a willingness to challenge the status quo. As for how long it takes, it depends on many factors, such as the change's complexity, the size of the organization, and the resistance from the individuals involved.
It is essential to have clarity about what needs to change, how the changes align to the other high priority initiatives/projects, how to sequence changes and to measure success along the way.
Setting realistic timelines and expectations upfront and understanding that the journey never ends is key too. It evolves as the rest of the business does.
To sum up, it is important for oil and gas companies to focus on stabilizing and maturing their data and processes to ensure organizational success. This is achieved by practicing good data management, operationalizing the data, having the right people and alignment, and undergoing cultural change.
We have extensive experience with building and sustaining data governance and management programs and initiatives. We share and apply our collective critical lessons learned with our clients to ensure they are set up with a comprehensive roadmap and execution plans that match their company’s unique needs.