Digital technology should make life easier, not more complicated.

If industries want to survive, the time has come to play catch up.

ARTICLE · 6 min read

It’s no secret that we’re living in one of the most exciting periods of human history.

 

Built on the shoulders of the Third Industrial Revolution (which began in the 1960s with the invention of electronic and IT systems), the Fourth Industrial Revolution (4IR) began in the 1990s when the Internet opened up to the entire world.

 

Some of the biggest drivers of the Fourth Industrial Revolution include artificial intelligence, machine learning, robotisation, automation, and the Internet of Things (IoT). This looks like interconnected devices (of which there are already 7 billion), automated and electric vehicles, biological breakthroughs, and more.

 

The Fourth Industrial Revolution will continue to blur the lines between what is digital, physical, and even biological—and the implications of this advancement are going to be enormous.

 

The political gap between countries that embrace the technologies of the Fourth Industrial Revolution will continue to grow. And so is the gap between companies that make smart investments. The businesses that invest in 4IR technologies—traditionally larger firms with a digital-first mindset—are zooming past competitors who can’t change fast enough. 

If industries want to survive, the time has come to play catch up.

 

The pain of embracing change

There are a few reasons digital transformation has stalled. In fact, Gartner identified six key barriers. One of the biggest roadblocks? A company’s mindset. Digitisation requires tremendous investments of time, energy, and money. “Digitisation” is also an obscure goal, and the return on investment isn’t always obvious. Unlike “increase revenue by 10%” or “improve operational efficiency by 5%”, “embrace digitisation” doesn’t have a measurable way to prove success.

 

There are also practical reasons it’s hard to embrace a digital transformation. To start, GSM and mobile networks only cover 10% of the world, making it difficult for companies in remote areas to even connect to the Internet, let alone make efficiency improvements with interconnected devices. Then there are the devices themselves, which are often produced by different companies and which don’t operate with each other. As you build, you need to find four or five companies that can work together, which can ultimately be a technical nightmare.

 

Finally, for many companies there hasn’t been a “pressure” to digitise (that is, until a global pandemic forced the world to go digital overnight). Because of the complications of building digital solutions, the benefits of digitisation haven’t stood out against the necessary investment. These factors, combined with the fact that there’s no deadline for transformation, mean that 4IR implementation often gets shoved to the side as a project companies will tackle “someday.” 

“McKinsey estimates that connective technology has the power to add as much as $250 billion of value to the oil and gas industry by 2030 alone. Of that sum, as much as $180 billion could be realised with existing infrastructure, even in remote areas.”

 

What is the Global Lighthouse Network, and why is it important to the Fourth Industrial Revolution?

 

Despite the challenges to adoption, the Fourth Industrial Revolution is on its way. And because the implications of this industrial revolution are so massive (and the global need for a sustainable economic revolution), the World Economic Forum saw a need to encourage innovation across all industries. The Forum’s solution was a special distinction called the Global Lighthouse Network (GLN).

 

The Global Lighthouse Network is a growing selection of 54 companies who have leveraged 4IR technologies successfully and seen massive improvements in productivity, sustainability, and agility. These companies are not just leaders in their respective industries—they are true powerhouses that are pushing the boundaries of what’s possible with technology today.

 

Look at Henkel, a chemical and consumer goods company based in Düsseldorf that has over 30 manufacturing sites and 10 distribution centres. To improve overall operational efficiency and hit its goal of being “climate positive,” Henkel built a data platform that connects all of its locations worldwide to a single ecosystem in real time. In 2019 that single source of truth let 6,500 employees gather insights on roughly 3,500 sensors that measure electricity, fossil fuel, water, compressed air, and steam consumption.

 

The results? Henkel lowered its energy consumption by 38%, and water consumption by 28%. Henkel also decreased logistics and processing costs by 12% and 10%, respectively, while improving operational efficiency by 30% and forecasting accuracy by 20%.

 

 

And that’s just one of many success stories. 

 

What makes the Lighthouses different

What makes the Lighthouses stand out is the way these companies approach problem solving and passionate support from C-level executives who know that the ROI of 4IR technology isn’t immediately apparent, but who push for it as a priority anyway. These executives know that the true value of digitisation is not just a 5% improvement in efficiency—instead, they’re looking at overall corporate resilience.

 

When you run a digital operation, you improve not only efficiency. You also make sure your company can withstand difficult conditions or dramatic global changes. It’s easy to restructure your business if there are political demonstrations in London, explosions in Beirut, or supply chain disruptions in Wuhan. Whether you just need to reroute your supply chain or completely reorganise your business in a politically calmer city, 4IR investment makes handling challenges much easier.

 

This resilience will be a key competitive advantage in the 21st century in a world of pandemics, protests, and other disasters, both natural and man-made.

The future of well monitoring

It’s okay to admit it: “digitalisation” is a buzzword. Largely because it’s such an abstract concept. Say the word in a 12-person meeting, and you’ll have twelve different ideas pop into twelve different heads.

 

That abstraction is part of the problem. We tend to turn digitalisation projects into overcomplicated overhauls of our business operations. The payoff can be enormous, of course. But the cost and hassle of hiring consultants, building new technology platforms, integrating it all into your system, and training your team on how to use it? That’s enough to give us a headache, just thinking about it.

 

Instead of thinking about the ever-evolving “digitalisation”, modern oil companies are thinking on smaller, more practical scales. They’re looking for easy-to-install, easy-to-use solutions that solve an immediate problem with digital technology. 

  • Bad weather? There should be a well monitoring solution for that. 
  • Salty environment? Shouldn’t be a problem. 
  • High-theft zones? That should be easy to handle. 
  • Expanding monitoring systems? Easy. Or it should be.

The oil companies of the future are looking at digital technology with fresh eyes. After years of use in our modern, consumer lives, we’ve become accustomed to how easy technology can make our world, no matter the use case. And smart oil companies know that the same should be true for their well monitoring. 


New satellite options

Satellite technology will have widespread implications for remote oil and gas worksites where there is no connectivity. The new satellite technologies will bring limited connectivity to these areas of the world and allow companies many of the same conveniences that connected sites can use to their advantage. 

 

McKinsey estimates that connective technology has the power to add as much as $250 billion of value to the oil and gas industry by 2030 alone. Of that sum, as much as $180 billion could be realised with existing infrastructure, even in remote areas. And companies that use these technologies can capture an additional $70 billion worth of value for the industry.

 

Well monitoring is an excellent example of the application of new satellite technology. well monitoring. New digital technology such as low power, wide-area networks and low-orbit satellites open up doors for wellhead monitoring from remote locations. Where it was previously impossible to connect to wells, advanced sensor technology allows companies to connect wellheads to a network, and advanced satellite technology allows those sensors to be monitored from anywhere in the world. 

 

Making things simple with end-to-end solutions.

The second major innovation that’s reshaping oil and gas (really, all manufacturing) is the rise of end-to-end digital solutions. End to end solutions are a complete package solution that includes hardware, software, and connectivity. It’s everything you need, wrapped up in one box. There’s no complicated wiring. No expensive IT personnel to build an entire system. Instead, an end-to-end solution just works. After the initial setup, the solution will typically be easy to use.

 

End-to-end solutions offer a number of advantages over traditional digitalisation projects, including:

  • Ease of installation
  • Cost reduction
  • Simplicity
  • More powerful insights

We’ve already established that most digital transformation projects involve expensive consultants, specialised talent, and long, frustrating installation periods. But as the cost of producing IoT technology decreases, the number of companies that build complete systems and ship them to market will grow.

 

What this ultimately means is that your business will have access to easy solutions to big problems. If you need to monitor something, you can buy a kit in the mail that your team can install, set up, and start using in a matter of weeks

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