Crisis and opportunity are two sides of the same coin. As digital transformation in the oil and gas sector takes center stage amid the coronavirus (COVID-19) outbreak, everyone must rethink their business models. In this regard, one must wonder: is COVID-19 actually fast-tracking digital transformation? Egypt Oil & Gas interviewed Hoda Mansour, Managing Director of SAP Egypt to shed light upon the business trends emerging in the face of a pandemic.
The world is navigating through an uncertain period. How is SAP coping with that?
In the wake of COVID-19, Egypt’s energy firms are developing short-term mitigation strategies and rethinking long-term perspectives with increased automation. Energy companies need to be extremely agile, flexible, and responsive to challenges such as forced shutdowns and reduced output.
Fortunately, the energy and natural resources industries in Egypt and the Middle East are used to pricing and demand challenges. As Egypt’s energy firms continue to digitally transform, they are well-positioned to navigate the current era with high scrutiny from a health and safety perspective, and production challenges through labor issues. Regarding SAP, the company is already prepared to deal with the lockdown where we are leveraging our technologies to support our employees, customers and partners during these situations.
How do you think the coronavirus is affecting business trends?
We see five main areas where oil and gas companies can adapt the power of digital transformation. The first one is supply chain; where energy players need risk-based and simulation tools to evaluate plant risk and respond, and enable risk mitigation strategies, particularly for mission critical infrastructure. The second one is procurement; where companies are looking at Supplier Risk Management to evaluate supply disruptions of raw material, critical spare parts, and to develop risk mitigation procurement strategies. Third is finance and treasury; where companies need to model impact scenarios ranging from complete shut-down to minimum production in order to understand and cater for cashflow and other constraints, as well as to be ready to respond and keep contingent cash. Then developing human resources by planning for a full-time employee shortage and determining critical minimum employee requirement and skills. And finally, training and education; where companies will look into other platforms to conduct its employee training and education. These platforms will have to be cloud-based and mobile-friendly, such as SAP’s Learning Management System or SAP Litmos.
We have also seen an acceleration in digital transformation plans that started already in the past two years as more companies have realized that they must be digital in order for them to survive and thrive in challenging times.
What do you think are the biggest challenges to digitally transform your business in such an era?
Once the world emerges from the coronavirus crisis, the Middle East, and especially Egypt, energy and natural resource firms will need to meet a surging global energy demand, which is set to grow by 80% by 2050.
Aligned with Egypt Vision 2030’s economic growth goals, energy firms are looking to real-time planning, forecasting, and modeling. Oil and gas companies need a digital transformation agenda that outlines how technology can meet business goals. Energy firms should drive outcome-based engagements, provide energy as a service, and flexibly source talent. Firms need to reengineer and automate business processes, and establish real-time digital cores.
How does SAP facilitate remote working?
The ongoing development of coronavirus is forever changing the way we work, including in the oil and gas field. Individuals, teams, and entire companies are choosing to work remotely — and organizations are scrambling to adjust.
SAP is seeing strong Egypt and Middle East interest in Qualtrics having launched the Remote Work Pulse solution, which provides a live barometer for organizations to understand how employees are working from home.
There are three things every organization must do immediately, and the order you do them matters: ask employees if they feel okay, ensure that employees have what they need, and act quickly to help employees stay productive.
Our employees remain our top priority and we have been holding regular business and even social meeting sessions to keep our employees motivated, informed and entertained.
Unprecedented change confronts the petroleum industry. How should oil and gas companies reinvent themselves?
With one recent YouGov survey showing 96% of regional firms are prioritizing customer experience in 2020, the companies that put customer experiences in the center of their strategy and weave together formerly siloed processes, intelligent technologies, and real-world data will develop new business models and revenue stream.
We have identified four strategic priorities that will keep oil and gas companies relevant and thriving amid and beyond the crisis; extending beyond the barrel – breaking free of the traditional energy demand and price curves to capture new value and provide new customer experiences. Digitalizing production and delivery – disrupting the value chain by managing physical deliveries across the network with the help of the Internet of Things (IoT) and machine learning, without owning or operating the inventory or hiring the resources. Competing as an ecosystem – using a network of business partners and customers to foster predictive supply chain planning and to manage projects collaboratively. Unlocking value with technology – delivering operationally ready assets by using automation and machine learning for more accurate exploration and effective asset design and constructability.