Digital Transformation Starting with "Why?"

Searching ‘digital transformation’ on the internet returns >400 million results. Yet many organizations find it difficult to put a finger on it, with senior stakeholder feedback that it is incomprehensible to start and arduous to execute. The responsibilities of leading the transformation often falls on the shoulders of the Chief Digital Officer (CDO), the role itself relatively new and already in danger of extinction as reported in some emerging studies.

So why is digital transformation so complex (if indeed it is)? Shouldn’t digital make things easier, not more difficult? We, at Schlumberger, have had the privilege to work with multiple and diverse groups of oil and gas firms and their CDOs in their digital transformation journey. Our observations thus far?

It really starts with “Why”. 

Articulating (and believing in) the rationale for digitalization is not easy. Our industry is founded on the exploration and commercialization of economically viable hydrocarbon reserves. With uncertain market conditions and the dual energy challenge, it is critical to understand and ask questions on the changes required to be successful in an uncertain future.

The answer all companies invariably arrive at is “digital”. Not “digital” for technology’s sake (as most technology is already available) but the use of data with digital advancements to better: 

  • Find, evaluate and invest in prospects quicker and with more confidence than the competition
  • Determine and pursue the most economical scenario to develop the field(s)/well(s) given the myriad of existing and new potential options leveraging innovative concepts/technologies
  • Extract the most value from producing assets safely and efficiently under potential business scenarios
  • Provide resilient and agile operating models and ways of working to exploit market changes

The list goes on. Leading companies intrinsically understand this and are able to commit resources for digitalization. If you have not arrived at this conclusion, check each function’s (operating and supporting, e.g. exploration, development, production, supply chain, finance, etc.), aspiration, and strategy and invariably you will find data and digital as a central component to the improvements. If not, ask how much more can they deliver if the potential data is truly unlocked in their domain workflows.

Part of the digital transformation value is to elevate these individual digital initiatives in a holistic program—to inject, challenge, fund and drive synergies across the value chain and investments in data.

We’ve seen companies obsess over a single number for the business case, companies which take the visionary approach towards all innovation and technology, and even companies which take the cautionary threat of “transform or wither” as a mantra. What is undeniable is once each understands and internalizes the “Why” and value digital brings in tandem with their business, there is no turning back.

Creating the momentum for digital starts with “Why”. "He who has a why can bear almost any how" Friedrich Nietzsch.

Does your organization have a compelling, consistent and internalized narrative for “Why”? It is often the front-line staff that intrinsically understands the need for digital more readily. Senior management often requires more time to understand the business imperative and middle management to learn and appreciate “what digital can and needs to do” to ultimately lead and execute the transformation.

This process is not discreet (i.e. not a onetime event). It is an evolving journey to adapt the organization and ways of working to leverage data in the delivery of corporate goals. We will share some perspectives of the “How” in this journey in the next blog series, including the need to steer, drive, and enable from a user and CDO organization perspective.

Author Information: Alvin See is known as the keeper of trivia and obscure stories to his friends and colleagues. An engineer and business consultant, his passion is in the digitalization of the energy sector and the house he is living in.