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The Process Centric Oil Company?

"Data trapped in silos" can mean insightful data derived from a function’s processes does not flow to the next function.

As software investors focused on the Energy Industry, we regularly are exposed to the notion that the industry’s data is trapped in silos. In this context the word silo refers to “functional silos” such as land acquisition, drilling, production management, etc. which in turn reflects the notion that the industry’s general organizational structure is functional.

In a functionally-structured company, the operating functions are geared toward objectives of the individual function groups which are eventually coupled together by senior management. Outputs of one function become inputs for another function. Another inference of the phrase…..“data trapped in silos” is that once functional output occurs, the operating data of a function’s processes does not flow to the next function - just the conclusions. This is what we see at the technology level and so many times the hand-off vessel is the spreadsheet or some ad-hoc database.

If we can agree that technology structure (i.e. communication structure) tends to mirror organizational structure, then we can pragmatically affirm that the Energy Industry is functionally-structured. However, if we all understand that a good part of the Energy Industry’s push toward “Big Data” includes the push toward a single place where all data is stored, accessible by all parties across the entire enterprise, then we must recognize that the seedlings for a differently structured company exist. In the context where the capabilities/data of each step along the way is deposited on a conveyor belt of assembly and feedback, when then see the green chutes of a process-centric organization. Based on this foundation of communication structure the Energy Industry will be drawn naturally to this state of being.

A current search on LinkedIN for employees working at oil companies (and oil service companies) with the words “continuous improvement” or “process improvement” in their job titles reveals a significant increase in population compared to that same search two years ago - another clue to a transforming industry. These types of folks are trained to look across the organization at corporate outcomes and an aggregation of sub-processes that manifest those outcomes. This means that software as a communication medium for the enterprise will be evaluated through a different mindset than has historically been the case. Process managers will need to know how new software folds into the larger communication map (across the organization).

Ten years ago there were two ways to understand and then influence innovation: process change or org change. Today, data provides a third way. Successful vendors will embrace this because innovation and pace are driving every business decision today, and data provides new insights, and is incredibly fast to harvest and interpret.

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