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Collaboration in the Oil and Gas Industry


Posted by on March 29, 2010

I recently came across a report from Microsoft which talks about how the oil & gas industry is really starting to focus on collaboration and social media.  We’ve already established that collaboration has a great impact on overall business performance and now we’re seeing giant companies such as Shell (which employs 150,000+ people) making collaboration a high priority.  As I mentioned before, collaboration is at the heart of every single business and with a 36% impact on overall business performance, it’s hard to not make it a priority.  There are still issues and hurdles that companies need to overcome in order to make successful collaboration possible and it’s great to see giant companies such as Shell paving the way.

According to Johan Krebbers, Shell’s group IT architect:

“Eighty percent of our teams are global teams, with members in multiple locations around the world, we must offer world-class collaboration capabilities so that our people can work at a global level.”

Most enterprise size companies (and even small/mid size companies) have multiple areas internally where they can access information, and by multiple I’m talking several dozen.  This means dozens of sign-ons, usernames, and passwords for every employee.  Not a very efficient and a very convoluted way to get things done.  However, all of these processes are legacy and have been around for quite some time.  They are a part of how the company used to operate, and that is where we are starting to see change.  Companies such as Shell are moving into single collaboration environments where they have access to all of the information and people they need to get the job done.  According to the report, collaboration in the oil & gas industry is centered around three areas (read the report link above for more detailed information):

  • Office PC
    • Using a desktop PC to find the right information at the right time.
  • Mobile
    • Effective and efficient ways for people in the field to communicate with those in the office
  • Operations Center
    • Make and share complex visuals and data in real time among engineers, and scientists make decisions

When you think of collaboration you usually don’t think that mega-companies such as Shell would be at the forefront of adoption, but ironically they are.  Shell is turning itself into a more agile business.  It’s interesting to see mobile as a key area of collaboration, but it makes perfect sense.  Any industry that has employees “out in the field” is going to have to rely on mobile as a key method of collaboration and communication and this is why we’re starting to see companies such as SocialText deploy mobile app versions of their software.  As it was defined in the article,

“Social media becomes business communications.”

I think that quote speaks volumes about what we are starting to see and will continue to see in this space.  Companies with a global reach and presence need a way to get everyone on the same page; to effectively operate as a single entity instead of as a fragmented organization.  You can’t manage 150,000 employees with multiple managers and email as a source of communication.  New collaboration tools and strategies are making this form of unified communications possible.  If Shell, with it’s 150,000 employees is trying to make it happen, then I find it hard to believe that smaller and perhaps more agile companies can’t.  Microsoft also pointed out that the recession and current economic conditions are not making things pleasant for the oil & gas industry and that is precisely why companies in the space are turning to collaboration to help turn things around.  For those of you that are curious, Shell is using the Microsoft Azure platform as its foundation for collaboration.

In a separate study conducted by Microsoft and Accenture:

“Nearly 75 percent of oil and gas professionals see value in using social media and collaboration tools at work — an 83 percent jump from responses in last year’s similar poll — but corporate wide endorsement of these tools continues to lag behind, according to a Microsoft Corp. and Accenture.”

And then there’s this quote from Craig Hodges, Microsoft General Manager, Manufacturing & Resources Sector:

“More than three-quarters of the respondents said they spend up to four hours a day collaborating with co-workers. Half said they need improved communications to coordinate multinational activities, to meet increasingly stringent regulatory requirements, and to better manage their changing work forces. Yet company policies actually stand in the way of the adoption of social media, a source of new collaboration tools our survey shows to be in strong demand.”

Again, the issue comes back to people, not technology.  Technology is always going to evolve and change at a faster rate than culture, which is why it’s so important to focus on this area.  Hutch Carpenter from Spigit also wrote a great post on the two year lag that we are seeing between new technology and companies adopting that technology.  So how do companies deal with the lag?  I believe a part of the answer deals with the ability to collaborate, innovate, and stay agile.  Successful collaboration strategies need to be a part of how the company operates.  Deploying a tool and throwing out a few guidelines is not good enough (as we can see from the above quotes).  The following quote from  Craig Heiser, Accenture senior executive in the energy industry group’s management practice, sums everything up perfectly:

“The survey shows that companies are not realizing the strategic benefits from their collaboration tools investments such as increased work-force performance, improved sharing of knowledge or skills across the work force.”  To realize the full potential of collaboration investments, companies need to change work processes and individual roles while training their employees on how to achieve improved business performance through collaboration.”

I highly recommend that everyone read both of the reports mentioned above and let me know your thoughts

  • munishgandhi

    Jacob,

    I enjoy your focus on collaboration and ROI. Since you like visuals,

    - I can imagine one where the golden path from social media to ROI passes through improved collaboration. There are many other possible paths, but the productivity improvements through internal and external collaboration seems to be an easy one for companies to take.

    - Or, another one in the style of a Venn Diagram. Activities relating to Social Media form one circle, activities relating to Collaboration form another circle. At the intersection of the two lies ROI.

    Regarding this particular study, did you see any numbers showing ROI?

    Regards,

    Munish

    • http://www.thefutureorganization.com jacobmorgan

      Hi Munish,

      That sounds like an interesting visual, something like going down the yellow brick road. I didn't actually see numbers referring to specific ROI but I am reviewing another more current report done in 2009 which I will put up soon.

      • Anthonywlaw3

        I am mr Donald Austine general manager of texaco oil and gas in Uk england london here. if you are interested in the supply and manufacturing of oil and gas to any part of the world just call me immediate so that we can discourse on the modalities
        Tel.+447011152350CEO.Texaco oil and gas..

    • Anthonywlaw3

      I am mr Donald Austine general manger of texaco oil and gas in Uk england london here. if you are interested in the supply and manifacturing of aol and gas to any part of the world just call me immediate so that we can discoyrse on the modalities

      Tel.+447011152350
      CEO.
      Texaco oil and gas..

  • kirkbartha

    We're at a critical mass in global communications technology… I'm currently CEO of a small oil and gas co. with a global vision. Not only will we leverage collaborative tools, we will rebuild them with greater capacity… governmental, legal, financial, managerial, remote teams… all-in-one tools, signatures, processes… black swan, non zero, common wealth, how much can you fill into one app, one window, one guild, one consortium… the key to effective global collaboration is the personal willingness to become a generalist schooled in interdisciplinary studies and linguistics. If you're a specialist tell us what we need to know and we'll get it done together… no room for greed, so 2000 and late.

    • http://www.thefutureorganization.com jacobmorgan

      Hi Kirk,

      Would love to chat with you a bit more to hear what you guys are doing and how it is working. Sounds like you are touching on all the right key issues with governance and process which is something that is oftentimes overlooked. Let me know if you want to set something up.

    • Kalpeeshh

      hi ..
      I am in line with your thoughts and yes we are building something like this, I need to get in touch with you , please tell me how and when. I know this is an old post but still ..

  • kathyherrmann

    Hi Jacob,

    It not at all surprising oil companies are making efficient online collaboration a priority. It's right in line with the industry's traditional collegiate work environment where in-person collaboration has always been a priority. Additionally, the oil industry has always been cutting edge in terms of technology.

    If anything, I'd expect the oil industry to lead other industries in terms of demanding, implementing, and spurring development of collaborative tools.

    However, expect oil execs to favor private social channels that are avaiable inside the firewalls rather than outside. This expectation aligns with the typical proprietary view of data most oil companies hold. Exceptions may occur within inter-company partnerships, of course, but these would still be private communities.

    • http://www.thefutureorganization.com jacobmorgan

      Hi Kathy,

      Thanks for your thoughts. The oil and gas industry is obviously extremely heavily regulated so it's always interesting to see how such an industry responds to collaboration and social channels.

    • Anthonywlaw3

      I am mr Donald Austine general manager of texaco oil and gas in Uk england london here. if you are interested in the supply and manufacturing of oil and gas to any part of the world just call me immediate so that we can discourse on the modalities
      Tel.+447011152350CEO.
      Texaco oil and gas..

  • mikecassettari

    There’s no doubt the oil and gas industry's initiatives to improve energy efficiency and reduce emissions are dependent upon collective innovation. It's encouraging to see Shell adopting a more unified approach to collaboration, and Jacob, your perceptions reflect similar needs we see from our customers in this space.

    We’re seeing a couple drivers fueling the need for more effective collaboration and knowledge management solutions. One, employees need to be able to collaborate more closely and rapidly on internal energy research and development. And two, the growing number of partnerships between governments and industry, and between knowledge producers and knowledge consumers, are bringing disparate organizations and teams together that must now collaborate on enterprise content.

    This is naturally engendering what we call “knowledge communities” focused on critical issues. And like most business objectives and processes, technology will play a key supporting role. Enterprises need a tight integration between business and IT to achieve their business goals of collaboration.

    More importantly, they also need a collaborative organizational culture. Collaboration is not just a business process, nor is it just a set of technologies. It’s also a cultural mindset created by management and pushed out through the organization.

    I think instilling a culture of collaboration enterprise-wide is really what will reduce the “lag time” described by Hutch Carpenter. That’s what will help companies “cross the chasm,” to use Geoffrey A. Moore’s words, and move into mainstream adoption of collaboration and Enterprise 2.0.

    Mike Cassettari
    http://blog.inmagic.com

    • http://www.thefutureorganization.com jacobmorgan

      Hi Mike,

      First off thanks for your comments. It's interesting to hear your thoughts and you touched on something that wasn't mentioned in the report and that was collaboration between governments and industry. A tight integration between IT and business units is definitely ideal but I'm currently working with a client where this nowhere near the case. IT is a tough hurdle to cross. Culture is of course important as is senior level management buy in.

      • mikecassettari

        Right, the trick is finding the right mix for one’s own organization. It will be an interesting thread to follow. Thanks for sparking the discussion.

        Mike

  • machwan

    The oil industry is much more advance and sophisticated than other industires. It finds more-n-more new aspects of the industry. I would expect the oil industry to lead other industries in terms of demanding, implementing, and spurring development of collaborative tools.

  • mikecassettari

    Right, the trick is finding the right mix for one’s own organization. It will be an interesting thread to follow. Thanks for sparking the discussion.

    Mike

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