Study Shows Digitization is a Leading Indicator for Downstream Energy Growth
The downstream oil and gas industry is at a digital crossroads. As with any industry involved in complex, interdependent supply chains, change can be slow and sporadic. But a new commissioned study conducted by Forrester Consulting on behalf of DTN shows how dramatic the impact can be for downstream oil and gas organizations that are slow to move from manual to digital.
While that move may seem overwhelming, two-thirds of industry decision-makers agree that failing to invest in digital modernization is a “significant risk” to the future of their company. The study points to three key areas of digitization that can drive the most impact on revenue and growth as well as protect business continuity along the downstream oil and gas supply chain.
1. Reverse the impact of manual offline tasks and disconnected data
Digitization can connect disparate data and remove operational inefficiencies from manual offline tasks. With each partner in the downstream energy ecosystem using different people, processes, and technologies, inaccurate data can domino delays throughout the entire supply chain. Nearly 70% of downstream oil and gas decision-makers agree that manual offline tasks and disconnected data have a negative impact on profit margin. For those leaders, the study shows that industry digitization means prioritizing better sharing and distribution of data and driving real-time operational improvements from data analysis.
2. Improve communication along the supply chain
The right information at the right time is critical, and with a digitized approach to data sharing and delivery, that communication can reduce risk to profits and help protect revenue. Business success relies on seamless collaboration and communication across the supply chain, but incorrect manually entered data or missed notifications to partners can cause disruptions and delays across the ecosystem.
Along the downstream supply chain, there are very specific details to be shared in a timely way with very specific stakeholders about both product and product status. Consider the impact of a miscue when an outage message arrives while the tanker is en route to the terminal, but in fact, the product is available for lifting. Based on a mistimed message, the driver diverts — and takes that revenue opportunity with them. A holistic and timely view of local fuel demand can help organizations capitalize on opportunities — not just by the day but often by the hour.
3. Better facilitate operational efficiency
Sixty-six percent of respondents agreed that operational inefficiencies from manual offline tasks and processes cost them valuable profit margins, so the need for digitization to help facilitate better decision-making and improve business results is not surprising. In fact, 76% of downstream oil and gas leaders agree digitalizing offline processes is crucial to driving operational efficiencies. It’s no surprise then, that real-time data and market analysis were ranked as the top two digital improvements that can have a positive impact on the bottom line, followed closely by market and weather data.
Initial investments in digital modernization can pay off quickly. Yet, with so many moving parts, downstream oil and gas supply chain partners will need to modernize together. Of those who have invested in digital modernization efforts, nearly half reported improved insights on emerging supply trends, as well as better operational efficiencies. These early successes should help incent other organizations to begin their journey.
Dive deeper into industry digitalization trends
To take a closer look at the in-depth commissioned study conducted by Forrester Consulting on behalf of DTN, which surveyed downstream decision-makers about their current challenges, priorities, digital modernization, and operational intelligence, as well as some initial recommendations, download the study today.