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Beyond the Gas Stations: Digital Transformation in Oil & Gas companies

By Vishvajeet Saraf, Principal Technology Architect, Infosys


Disruptive changes are coming to the downstream Oil and Gas business as the demand for gasoline is beginning a dramatic shift. There is an increase in demand for alternate fuel vehicles across globe. Few countries are planning to put ban on IC engine to reduce carbon emission. More than 30 Chinese cities have plans to reach 100 percent electrified public transit by 2020 (For complete news click here).Emerging countries like India are in the process of building policies to promote electric vehicles. Advance technology in electric vehicle manufacturing has started showing better results in terms of efficiency and speed. Car sharing economy is seen as bigger shift than electric car advancements. All this will impact profitability of Oil & Gas companies.

Yet, oil & gas companies are at right place to convert these challenges into opportunities. Leaders in this domain own prime real estate at significant places within cities and along key travel routes. Leaders like BP, Shell  have transformed their business model to provide new services to customers like car charging facilities, car washing stations, retail convenience stores.

This broader business model involves a core business transformation to change to a consumer centric approach. Focusing on end consumer oriented services increases the need to provide convenient, personalized and true Omni channels experience to customers. Hence oil & gas companies are looking for an efficient and appropriate digital ecosystem while investing in these consumer services. 


Seven Steps to Successful Digital Transformation

Oil & Gas companies need to adopt 7 major steps to successfully strategize and execute Digital Transformation program to achieve the desired goals. 

Step 1. Build a new Organization Structure/Spin Off & Associated impact assessment- Build a new organization focusing on consumer services to have measurable KPIs and revenue targets. The new team will focus on key initiatives to achieve the transformation. Digital transformation needs a culture to respond to market changes and find opportunities to innovate. But for large, incumbent organizations with complex systems, it is not always easy. As several of them embark on their digital transformation journeys, the opportunity to transform into agile, responsive entities, at enterprise scale is a compelling opportunity. In other words, the need to become a Live Enterprise - that continuously evolves, learns and innovates, becomes an imperative.

 Though this is a key business strategy to achieve higher efficiency, impact assessment on systems and architecture is an important aspect. Unaddressed impact could lead to integration issues, duplicate systems and costs related to them, inflexibility and lack of agility leading to financial losses. A detailed assessment of the applications, dependencies would help in creating a view of the systems that need to collaborate with the parent entity. On the back of the above needs, a defined process & architecture strategy should drive the architecture definition and implementation.

Step 2. Understand & redefine the future customer experience - This includes understanding customer personas in different geographies and their expectations about overall experience while consuming various services or buying products. The experience expectations of an existing loyal customer (who comes to gas station for refueling her car) will be completely different when she considers the Gas station as consumer service hub providing services like convenience store, car washing center & electric car charging station. Use cases like click and book (book car washing service), click and collect (pre-order breakfasts and collect it while on the gas station), or showing personalized offer on digital signage based on customer identification is different experience for customer.

A "Know Your Customer" exercise should become the basis for defining experiences on various customer touchpoints (e.g. POS, car charging station, gas station, convenience store, mobile app, digital signage) and prioritizing new capabilities for end customers. This investment is needed at the start of transformation program. A formal survey should be conducted to capture personas and key expectations. Key principles driving experience, experience maps and key future user journeys are the starting point of this transformation. These will define the scope and boundary of next steps.

Step 3. Build the next generation capability model - Customer experience maps and user journeys highlight the need for new capabilities. This can include capabilities to enable campaigns, create and publish new products, provide self-service, identify & reward loyal customers, provide convenient ways of payment, show personalize offers, any-time/ anywhere fulfillment, actionize on instantaneous feedback, and real time customer interaction. Defining next generation capability model is key to building a digital architecture.    

Step 4. Develop the digital architecture blueprint - Digital transformation journey depends upon the well thought foundation of digital architecture and decisions. Let's discuss few important aspects of digital architecture.

a. Master Data Management / Importance of master data while introducing new services (avoid silos of master data) - Since ERP is a key system in the Oil & Gas retail business, customer data resides in ERPs. However, that is not the only system with customer data.  In the event of introducing new services like Car charging solutions and retail convenience stores, customer data also resides in silo systems. A single view of customer data is important in digital architecture. Integrating customer data on a single Master Data platform should be treated as key initiative of digital transformation. Building an identity model which supports single customer view is also one of the key success factors.

b. Consumer IoT & real time event processing - Use cases like sending relevant, personalized & real time offers based on customer identification (e.g. Car's Number Plate) at gas station, offering discount on Car washing services based on condition of the car, offering the real time discount based on customer's location in the convenience store will make Oil & Gas companies focus on end customer experience. This will drive the need for a consumer IoT ecosystem and real time event processing capabilities. An IoT gateway, sensors, and a real-time event processing framework should be integral part of digital architecture.

c. Role of Data & Analytics - Real time personalized offers as described above need a strong foundation of historical transactions data, social media data, and real time events data. This requires a data platform to support scale, velocity and variety. Analytics capabilities like augmented analytics and self-service analytics will play important role in realizing key use cases. 

d. Omni channel enablement /Anytime-Anywhere - Consumer services would need convenience of buying (potentially including online purchase), fulfillment (receive at store), payment (pay with mobile), and return (potentially at a partner store). Intuitive experiences are important to attract and retain customers. Tools & processes for business to launch new products and services including combination of third party product/service should be considered while developing the architecture. Federated order orchestration, components to enable convenient and new ways of payments, intuitive UI frameworks to enable mashups, efficient content and experience management systems to enable business user autonomy are few components which should be evaluated carefully while defining architecture components for omni channel enablement. Open APIs to support partner ecosystem is also being considered by various companies to support use cases like collect or return at partner store.   

e. Loyalty-Campaign-Offers -  Consumer services also demand strong loyalty engine, campaign management, and machine-learning-based offers management components. The capability model will help guide the sub systems / components. Most Oil & Gas companies have implemented fuel card and associated loyalty point processes. These need to be leveraged while building campaigns, loyalty and offers in a broader customer-facing context.

f. Connected & event driven architecture - None of the listed components and platforms produce the desired output in silo. An API based, loosely coupled architecture enabling unified presentation, unified customer view and unified access should be your goal. Using an API based architecture for ease of integration and multiple channel enablement is the new normal. This should leverage real time event driven architecture to achieve benefits like processing high volumes of high velocity data, such as IoT streams.  Relevant features would include real-time processing with minimum time lag, complex event processing, such as pattern matching or aggregation over time windows, and highly scalable and distributed and subsystems to have independent views of the event stream.

Step 5. Decide Technology Stack - Making a decision on the future technology stack is always a tricky situation. Oil & Gas companies are predominantly enabled by COTS software products because of the inherently low-margin nature of their businesses. Digital architecture may demand light weight, open source and scalable software components. The perfect blend of these two to achieve next generation digital architecture should be carried out carefully by providing pros and cons. The architecture community will need to consider aspects like NFRs, support in specific geography, TCO, earlier contracts with existing product organisations, and future changes. Building a formalised framework to project quantitative analysis will be required. Don't forget organizational change management: Adoption of new capabilities and technologies creates anxiety. This can be managed by arranging demos using show & tell sessions for key user journeys before getting buy-in on the new technology landscape.

Step 6. Roadmap & Initiatives - Building an implementation roadmap coinciding with the business plan is not a new thing in Digital Transformation initiatives. Make sure you cover the following aspects:

a. Defining Value:  Associating incremental value which can map to CEO vision is key to build successful roadmap. Securing senior management commitment and budget is the success criteria of a good roadmap.

b. Foundation comes first: Its necessary to have strong foundation before we built great experience. Foundational initiatives like consolidation of master data & single view of customer should be given priority as these are necessary for consistent experience.

c. MVP / Lighthouse projects / Build small, Test Quickly and scale for success - Identifying a MVP use case /project requires effort. This MVP will get priority in the roadmap. Business and IT can work collaboratively to prioritize use cases and decide the scope of MVP which can potentially create a positive wave. This should be a project with significant reward but manageable risk. Consider enabling the MVP for selected few / loyal customers who can become brand ambassadors of new initiatives.

d. Skills & change management - Major transformation needs core skills for successful implementation. Initiatives to upskill, retrain and hire should be seen as a separate measurable initiative. Change management is a vast topic but it should not be ignored in the event of building new digital enterprise. Empowering people to work in new ways is mantra for success.

e. Roadmaps are built to evolve - Evolvability should be a key characteristic while building roadmaps. Tracking, room for changes and impact analysis should be estimated and communicated to senior management while building the roadmap.

f. Operating Model & Governance - Creating a "digital way of working" requires top down communication, incentivized initiatives and appropriate tools and techniques. Governance should not be seen as red tape but as an accelerator for this transformation.

 

Step 7. Build Digital Delivery team - Building the digital delivery team is the last phase of strategy work of this transformation. This will have all roles and responsibilities defined that are needed to build future capabilities and implement & operate the new architecture. Key tenants to build a Digital Delivery Organisation are digital leadership, tools, DevOps, distributed agile, communication and agile way of working.  


Infosys Strategic Technology Group (STG) has played pivotal role in digital transformation journeys of leading Oil & Gas companies. Infosys can help accelerate the adoption of these seven steps by leveraging our accelerators, frameworks and experienced strategists. 


 

Seven Steps

Infosys accelerators & experience

1

Build a new Organization Structure

Infosys brings its own experience of building Live Enterprise. This addresses the challenges of agility, speed, curation of behavioral data, security, velocity of ideas and responsiveness to market forces across eight dimensions. (Hyper Productivity, Competitive Advantage, Responsiveness, Networked, Sentient, Smart Workplace, Agility & Speed).

2

Understand & redefine the future customer experience 

 

Infosys Digital Studio team with its vast digital agency experience leverages design thinking to come up with Customer Experience maps, UX, Interaction Design, personas. Whether it is a partnership to fashion a new UX or modernize the core or prototype a new digital offering, we take a holistic view of their transformation journey, find the allied problems worth solving and help them navigate their transformation from that point onward, more purposefully.

3

Build next generation capability model

 

Infosys STG - Enterprise Architects have built Industry specific detail capability models to align with consumer services. This will act as a quick start to complete capability model exercise. 

4

Develop digital architecture Blueprint

Infosys STG - Enterprise Architects have a vast experience in implementing transformation programs across industries and have built Digital Enterprise Architecture (I-DEA) for defining architecture blueprint. This will act as reference architecture to build the blueprint details.

5

Decide Technology Stack

Infosys brings with it a vast experience of having worked on multiple products across open source and commercial spectrum. Infosys can bring their expertise for product assessment to shape Digital technology stack selection process.  

6

Roadmap & Initiatives

Infosys has built roadmap & initiatives framework for executing Digital Transformation programs for several clients. Infosys brings with them a vast spectrum of large program transformation experience which can aid in accelerating and adapting the roadmap to customer needs. These artifacts can be quickly customized to adopt the context.

7

Build Digital Delivery Team

Infosys Digital team has built successful Digital Delivery organizations for various clients. This experience has translated into reusable artefacts for building organizational prerequisites, operating model, process. Infosys DevOps Platform (IDP) is a centralized, web based platform for continuous integration (CI), continuous delivery (CD), and continuous testing (CT).

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