Are we making the most of the age of the Industrial Internet of Things?

Are we making the most of the age of the Industrial Internet of Things?
We may earn a commission from links on this page.

In industries that revolve around unlocking new resources and plumbing new depths, the finer points of back-office operational efficiency can get pushed aside. They pale in comparison to the more exciting work in the field on the precipice of what’s next, whether it’s a fresh reserve or an inventive technology. That’s especially true when demand and prices are soaring.

But that prioritization means that a slowdown hits hard. In the oil and gas industry, a post-financial crisis uptick in demand made prices spike and companies scramble to find new sources of supply. The rush spurred well-known breakthroughs from horizontal drilling to hydraulic fracturing, and from deepwater wells to ambitious pipelines. Then, the days of $100-per-barrel oil gave way to prices below $50, and the falling demand left a glut of stockpiles.

In survival mode, it’s time to circle the wagons—or the wells, for this industry. The adoption of new technology has made many rigs more efficient, allowing producers to reduce active rigs with a surprisingly small effect on supply. Retiring outdated equipment and improving efficiency helps a great deal, but a shift in digital resources could be crucial long-term. Instead of a focus on drilling discovery, digital can open up the productivity of the people and information supporting every stage of the operation. More and more companies are embracing this approach: The days of 10-20% digital penetration in the sector are over.

A new Cisco report points out that many oil and gas companies have made investments in the Industrial Internet of Things (IIoT), but they’ve yet to fully realize their potential. Devices all along the supply chain collect terabytes of data daily, which then end up fragmented and unused. A fully digitalized flow could allow instant access to this data, whether it’s from cameras or sensors or satellites, through virtualization. It could cut computing delays in data transfer and enable faster and deeper analytical insight, which in turn could drastically improve decisions, safety, and production. It could even help prevent catastrophic and even fatal losses in an emergency.

Such a shift requires new skills from those helming the IIoT network, as well as the incorporation of people from specialized fields like data sciences. Employees would need to be comfortable in collaborative environments and breaking down barriers like that between Operational Technology and Information Technology, for example. Equipping staff with tools like web and video conferencing can enable companies to maximize the reach of their top experts, enhance training, and improve monitoring.

Eventually, the automation made possible by an IIoT transition could significantly reduce manual work. Production adjustments, maintenance, and the business day-to-day could all be transformed by removing human error and delay. It could also reshape the world of HR, especially with more advanced robotics and artificial intelligence (AI) on the horizon. Managers could explore new ways to evaluate performance, maximize productivity, and maintain workplace harmony.

The potential benefits of an IIoT-powered overhaul continue on, from robust cybersecurity to agile development. According to the Cisco study, it all adds up to a very concrete result—companies could see profits rise 11%, and GDP might enjoy a 0.8% boost. It’s a result that might have been unthinkable just a few years ago, when reducing wells was generally seen as disastrous for the bottom line.

In a down market, it’s tempting for industry players to slash costs, discourage innovation, and wait for old trends to resurface. Those who look inward, who keep pushing to operate smarter and faster with the modern tools at their fingertips, may not just weather the storm. They may outthink and outrun it.

EY’s Better Questions series asks some of the tough questions faced by today’s global businesses. Better questions. Better answers. Better working world. Discover more. #BetterQuestions

This article was produced on behalf of EY by Quartz creative services and not by the Quartz editorial staff.