Advanced Analytics Drive Digital Transformation with Minimal Capital Investment

Summary

Uncertain economic conditions and geopolitical concerns frequently cause industrial manufacturing organizations to exercise restraint when it comes to new spending. However, this does not change shareholders’ expectations of increased returns on previous expenditures, even while enterprises cautiously moderate spend in the face of challenging market conditions.

One way that industrial organizations can ensure these returns is by implementing digital transformation solutions such as advanced analytics, which leverage existing equipment and assets to produce insights and improve production outcomes. These initiatives improve both operational and business workflow efficiency with minimal upfront capital cost by empowering engineering and data science teams with key decision-making data, helping them solve age old problems in innovative ways.
 
This article will describe the three key phases of digital transformation—evaluation, implementation, and scale and optimization—and explore real-world cases where advanced analytics helped drive better business outcomes.
 

Defining digital transformation

According to Deloitte, “digital transformation is all about becoming a digital enterprise—an organization that uses technology to continuously evolve all aspects of its business models (what it offers, how it interacts with customers, and how it operates).”[i] In the world of analytics, this often means taking tasks that require significant manual efforts, such as data aggregation and cleansing, and automating them. By reducing the manual burden, this provides teams with more time to actually dig into data, and identify operational issues and areas for improvement.

Recent findings from an ARC Advisory Group[ii] survey found most manufacturing companies have made progress on their digital transformation journeys, but only about a third report substantial progress, with a focus on optimization and business-level improvements. This translates to great opportunity for increased revenue from assets, driven by digital transformation projects.

When beginning these efforts, organizations often make the mistake of believing they first need a fully designed and implemented IT/OT architecture, but modern solutions can deliver almost immediate value regardless of prior digital maturity (Figure 1).

 
Phase 1: Evaluation

It is easy for organizations to fall into one of two traps when entering the evaluation phase of a digital transformation project. The first is letting prior failures hinder future decisions. Many companies have been jaded in the past by technological implementations that failed to provide the value promised, which can discourage or impede future adoption.
 
The second is getting stuck in pilot purgatory, failing to ever make a decision that empowers teams to move from test-drive to run mode, where true business value is realized. Fortunately, there are many ways to combat these common traps and progress projects effectively from evaluation to implementation.
 
First, project leaders must engage the correct cross-functional stakeholders from the outset, including a mix of technical and management personnel, which helps ensure the project adequately addresses specific business needs with a workforce at its back. By breaking out of organizational silos, evaluation teams can determine the highest-value use cases, leading to quick wins for the team, while building confidence across the broader organization.
 
Second, teams should look for a software solution that delivers efficient access to data, integrates easily into existing homogenous enterprise architectures, and can be implemented quickly—as in days instead of months.
 
Evaluation case study: Chevron Phillips Chemical
A recent article in Forbes described Chevron Phillips Chemical’s experience in the evaluation phase of a digital transformation project, where they chose Seeq, an advanced analytics solution, to deliver self-service advanced analytics for the organization. The article states, “Upon completion of the proof of concept, users were able to learn the potential value of using Seeq from trusted colleagues. Seeq was easy to use and solved a massive number of problems quickly. The time to return on investment (ROI) was weeks rather than months or years. The problems that they were able to solve using the technology were problems that the workers did not previously know how to solve”[iii] (Figure 2).

Phase 2: Implementation

Once a team determines an ideal solution in the evaluation phase, it is time for implementation. To do this successfully, leaders should focus on quick wins that can be broadly deployed for business value and identify changemakers who can champion progress among various branches of the organization.
 
As companies move into the implementation phase, many try to advance too quickly and solve the most difficult problems first. Instead, focusing first on the “low hanging fruit” helps build momentum, accelerating the time to ROI while also bolstering end-user confidence. Demonstrating a series of quick wins can rapidly decrease innate resistance to change, which in turn helps break down project barriers.

Additionally, changemakers—the individuals who influence and motivate others—become evident during this phase, and project leaders must lean on them to garner organization-wide support. Changemakers’ preestablished rapport in their areas of the business can help build confidence in and show employees the value of a new solution. When changemakers’ energy is amplified appropriately, it can rapidly accelerate buy-in, increasing speed to real results experienced in the scale and optimization phase.
 

Phase 3: Scale and optimization

When teams enter the scale and optimization phase, they must remember that while digital transformation projects have defined end conditions, digital transformation itself is a journey, not a destination. In top companies, each digital improvement is a building block for future efforts.
 
Accordingly, a continuous improvement and sustainment plan is a key deliverable of digital transformation initiatives. This plan helps teams remain focused on value delivery while continuously evolving to meet the ever-changing needs of the business.
 
It is also important for teams to remember that the scale and optimization phase is about ensuring those tasked with adopting modern technology are given the right tools for success. These include proper training, use case support, internal knowledge sharing, and a feedback mechanism for further improvement.
 
The project team must be agile enough to receive feedback and adjust direction quickly to ensure issues are addressed. The group must also maintain focus on end users and business units, defining appropriate measures for success, along with projecting and identifying issues before they occur. Successful scale and optimization ease adoption efforts and accelerate the time to value of digital transformation projects.

Scale and optimization case study: Marathon Oil

At Marathon Oil, teams are tasked with monitoring and ensuring the stable operation of nearly 4,000 wells. Recently, the company implemented an enterprise advanced analytics solution to ease this considerable task.
 
Staying up to date on well status and implementing alerts is essential to the business because it enables operational teams to keep wells online, and it limits deferred production. During the scale and optimization phase, the selected advanced analytics solution provided workflows that reduced the time required to create new alerts from months to hours.
 
“Using Seeq improves scalability for Marathon Oil by connecting production data from across all its wells. The company has over 50 employees using the solution with 170 workbenches in Seeq Workbench. It generates 1,500 tasks and over 1,500 notifications a month. What was being manually identified in the past is now automatically generated. Overall, by using Seeq, Marathon Oil is looking to increase production by proactively identifying issues to increase uptime.”[iv]
 
Marathon Oil increased production and achieved faster scale by placing curated technology in the hands of its front-line personnel, empowering them with notifications and insights to operate more efficiently.
 

Keeping people and business value at the core

With such great industrywide digital transformation potential and the recent improvements of analytics tools, we will see many organizations enter the scale and optimization phase of their projects in the coming years.
 
No matter where an organization is at on the digital transformation journey, project teams must keep people and business value at the forefront of their efforts by continuously asking two essential questions:

1. Are people still the priority? This is a simple question, but far too often, project teams become caught up in daily minutia and lose track of actual end-user needs. Successful adoption and cultural shifts occur when people are kept at the center of each initiative. This requires soliciting feedback from end users and equipping them with the right training to communicate the realm of possibility, thus empowering the workforce to achieve maximum ROI.
2. Is this project being value driven or technology driven? Projects must cater to business outcomes, providing tools that deliver true business value. Losing sight of this purpose and implementing technology for its own sake knocks initiatives off course and undermines the value originally intended.

 When it comes to digital transformation, two key words to remember are “continuously evolve.” It is not too early or too late to begin these efforts; the time is now. In every phase at every stage, companies must continuously evolve and improve to maintain value-driven cultures, remain competitive, and get the most out of assets and data.

_{[1] https://www2.deloitte.com/content/dam/Deloitte/za/Documents/digital/za-Deloitte-Digital-Digital-Transformation-v3.pdf
[1] https://www.arcweb.com/industry-best-practices/arc-industry-forum-executive-keynotes-highlight-sustainability-digital
[1] https://www.forbes.com/sites/stevebanker/2023/01/16/chevron-phillips-chemical-embraces-cultural-innovation/?sh=3f7ec9f713e2
[1] https://aws.amazon.com/partners/success/marathon-oil-seeq/
 
All figures courtesy of Seeq}