Now that oil prices are rising and energy companies are renewing exploration operations, it’s time to re-evaluate what you, as an oil and gas service company, can do to get your fair share of the profit.
We’re seeing oil and gas service companies focus their time and energy in 2018 in these 4 areas:
1. Innovation and Differentiation
The best way to fight the profit squeeze is to offer something your competitors don’t – and can’t easily replicate. Technology, particularly IoT, predictive analytics, machine learning, and dashboard reporting through tools like Power BI, can be used to create unique service offerings and analysis of your business drivers that provide your energy clients with more visibility of their wells, jobs and production equipment. By providing more value and helping your clients increase uptime and lower downtime maintenance costs, you make it harder to displace your services and avoid the low cost provider from taking your business.
2. Developing a Digital Transformation Roadmap
There’s no question – the future is digital. The pervasiveness and ease of cloud computing, software as a service (Saas) solutions, and mobile apps have made digital transformation initiatives a priority across many industries, but especially in oil and gas services.
Because your business model is complex and your resources are spread across remote regions of the country, you may have found it challenging to collaborate effectively. Where do you invest? In field services software? In expanding your ERP software? You have a lot of choices - and challenges.
As a first step, we recommend building a digital transformation roadmap. You can’t do it all today, but with a solid strategy in place, at least you’ll keep moving in the right direction towards your business goals. Along the way you can invest in hiring and developing a digitally-savvy workforce who can help your business grow in this direction.
3. Invest in IT Assets that Provide Agility
The oil and gas companies who survived the plummet in oil prices either had enough reserve cash to keep operations going or were agile enough to change their business as needed. Although we’re on the other side of that dip, you never know when another economic change is coming. Agile IT assets like Dynamics 365 for Finance and Operations provide you with the flexibility to:
- Change business processes without custom programming
- Add/remove/change job roles & software licensing as needed
- Add or remove functionality to support multiple lines of business
- Gain greater insight into your business to become more proactive in changing market dynamics
- Easily absorb an acquisition or parse out a divestiture from your business.
4. Strengthen Your Relationships
At the end of the day, business-to-business is really human-to-human. Strengthening your relationships with employees, vendors, partners and clients keeps your business healthy, both culturally and financially. By providing personalized customer experiences, like sending clients texts about job statuses, or providing unique customer dashboards, you increase customer loyalty. By improving collaboration with suppliers, you can gain greater flexibility in delivery and credit terms. Tools like improved oilfield rental billing and tracking and field service software can help with the mechanics, but it begins with the leadership team embracing a relationship-centric philosophy.Other articles you might be interested in: