A recent article in New Technology discusses digital oilfield technology and the ways in which vendors of are overcoming the perceived high-cost barrier of its implementation.
Despite studies showing significant cost-savings as a result of their adoption, digital oilfield technologies are remaining a hard sell for many oil and gas companies at this time of weak prices – budgetary constraint being cited as the most common barrier. Notably, according to the article, technological readiness is not considered not a major barrier. This has led some vendors to adopt new business models in order to get the technology into the field.
For example, vendors are moving towards ‘try-before-you-buy’ models, such as trials and pilots. Companies are also able to offer levels of performance, rather than selling their product outright. These business models allow the technologies to be implemented in the field so oil and gas companies can experience the return on investment generated by the technology – without the initial financial burden.
According to Accenture, industrial companies are increasingly turning into customer service companies, as “product-service hybrids […] enable companies to create hybrid business models that combine product sales and leasing with recurring income streams from digital services. These digital services will also enable firms in resource-extraction and process industries to make better decisions, enjoy better visibility along the value chain and improve productivity in other ways,”
To read the full article in New Technology, click here.