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Creating a cognitive enterprise

20th June 2019

Janet White, UK & Ireland Oil and Gas Industry Leader at IBM, talks about the impact creating a cognitive enterprise will have on the industry in the future

Janet White, UK & Ireland Oil and Gas Industry Leader at IBM, talks about the impact creating a cognitive enterprise will have on the industry in the future

Janet White, UK & Ireland Oil and Gas Industry Leader at IBM
Janet White, UK & Ireland Oil and Gas Industry Leader at IBM

What impact do you think Cognitive Enterprise will have on the oil and gas sector?

The upstream oil and gas sector is experiencing a time of unique change, with the need to increase production at a lower cost and reduce environmental impact. In response, business imperatives have shifted to efficient asset portfolio and maintenance, operational reliability and safety, intelligent access to reserves, efficient execution of capital projects and driving sustainability towards decarbonisation with natural gas and renewables. The need to respond rapidly to these industry imperatives is driving the pace of digital convergence in oil and gas.

The next wave beyond digitisation has begun and the penetration of new technologies – including AI, blockchain, the Internet of Things, robotic process automation, virtual and augmented intelligence and others – is teeing up another era of business change. We define the result of such revolutionary change as “The Cognitive Enterprise”.

The industry will see enterprise-driven transformation with new ways of working and digital technologies embedded in processes at a level that will enable new workflows to leverage 80 per cent of unstructured data assisting more pilots to move to production at scale.

This enterprise-driven transformation will need organisational readiness in terms of agility, inquisitiveness and talent to succeed.

At IBM, cognitive technology is at the very core of our business and it is interwoven in our software, service offerings, hardware and research. We have built cognitive AI systems based on decades of experience in production and engineering knowledge.  It is incumbent upon us to help oil and gas companies to succeed and become cognitive enterprises.

What will be the biggest benefits to the sector?

In my view the biggest benefit to the sector will be to deliver the energy we need to the planet we desire! 

  • Address the dual challenge of growing energy demand and lower carbon through new business models and diversification into natural gas, renewables etc
  • Meet the relentless productivity and efficiency issues of refinery and chemicals' businesses by enabling new workflows leveraging AI, IoT and big data
  • By 2024, 60 per cent of production asset maintenance decisions will be made by AI operators with no human involvement. AI systems will help in planning drilling operations, analysing completion reports from adjacent well in minutes, highlighting relevant events and lessons learned in seconds rather than days and improving accuracy of drilling execution through guided drilling in reservoir to maximise economic production of a well
  • Move oil and gas to an “incident free” sector leveraging automation, AI (our own IBM Watson), smart wearables and IoT. Bring in more intelligence and connectivity and envision the future workplace.
  • Address the human capital challenge in industry, leveraging augmented Intelligence towards areas which have undergone significant loss of industry talent

IBM is already assisting a number of organisations with their AI enabled solutions to achieve these benefits and become cognitive enterprises.

 

Where do you see it taking the industry in 10 years’ time?

Oil and gas will become a composable sector in future in keeping with other industries. What do I mean by that?

It is clear that as platform-centricity becomes more widespread, many organisations will end up having to leverage other more dominant platforms to survive. Even the most successful players are likely to seek to leverage other organisations’ unique skills through platforms which will complement their own business models.

A cognitive enterprise will therefore be composed of multiple platforms – some owned, some bought and some borrowed. All platforms will be capable of some learning.  Organisations best able to orchestrate their family of platforms should be well positioned for success.

The energy sector is seen as the next frontier for blockchain development. Blockchain is critical to unlocking the efficiency potential of distributed energy generation and will disintermediate public and private utility companies. 

All systems and hardware platforms will be seamlessly connected across the various fields of operation, integrating exploration, drilling and production facilities and ultimately delivering useful data and video streams to a central location, allowing operators to make better and quicker decisions creating smart oilfields.

The oil and gas ecosystem will create open standards to help achieve operational efficiency and deal with complexity, adopting digital technologies - common technologies that can help them balance requirements for uptime, security, and safety through digital innovation. This safe path to digital will make process automation pervasive across oil and gas.

All this requires access to a new skill pool – recruited, created or accessible through platforms – that naturally identifies, absorbs and leverages new data and technological developments. This may well become the most critical constraining factor for future organisational eminence and the industry will also see more flexible workers brought in for specific projects.

 

How do we address the issue of skills shortage so that we have people in place with the expertise to fill future jobs which may not even exist yet?

This one of the things our CEO, Ginni Rometty, is most concerned about.  Her view is that “we build these technologies, so we have a responsibility to prepare society for these technologies”.

In a world where it is expected that artificial intelligence will impact every existing job, business leaders have an important social, corporate and economic responsibility to help high school students develop skills for what we call “new collar” jobs at the intersection of business and technology - think cloud and cyber careers.

The digital transformation, commonly called the Fourth Industrial Revolution, is projected to generate $100 trillion in value over the next decade, according to the World Economic Forum. The Pathways in Technology program, or P-TECH, focuses on STEM education covering the fields of science, technology, engineering and mathematics.

P-Tech is an educational model, co-developed by IBM in collaboration with educators and policy makers, which teaches soft skills as well as hard skills

The curriculum provides a six-year pipeline for students to complete high school requirements and gain an associate degree in high-growth, “new collar” positions. The program targets youth in under-served communities that have been left behind by technology. About 125,000 students are involved in P-TECH, which offers mentorship, internship and job opportunities so “every child can succeed,” says Rometty. There are 500 business partners in the network including Canon, Ford and Sprint, that students can engage with outside the traditional college route.

Now in its seventh year, this is an example of a new model of education, which provides opportunities for young people who may not have college degrees and companies need to change their mindset and hiring policies to accept these “new collar kids”. It's an education model which addresses both supply and demand as well as corporate responsibility.

Ultimately, the “lifelong learner” will become the new model for education and development and it is incumbent on us all to not simply excel but thrive in this exciting new frontier.

 

Is the requirement for new skill sets and increased opportunities for onshore working likely to have an impact on the gender imbalance in the industry?

Just 15 per cent of the oil and gas workforce is female. This needs to change and we have a huge opportunity in this digital era to do that. While technology is exponentially reshaping society, we need to ensure women are not left out. This is a great opportunity to ensure this an attractive career option for women.

The industry can expand the talent pool it draws from by taking steps to increase women's participation in STEM programs. It can enhance its attractiveness to women as a career choice by promoting the wide range of jobs available and making career paths more flexible, working with governments to remove structural barriers that make it difficult for women to work in the industry, and increasing the number and visibility of senior female role models.

IBM’s P-TECH program is intended to help establish an inclusive environment with the “new collar” job. Alongside the focus on education and skill development, there is a third pillar, returnship, which focuses on building confidence in people, especially women, who have been out of work to help them return to the workforce. A commitment to gender balance needs to be part of the corporate strategy, and that commitment needs to be led by the CEO.