Posted: March 23, 2020
We knew that 2020 would start by challenging energy companies with new regulations imposed by IMO 2020. Yet no one expected the sudden fall of oil prices, creating a degree of uncertainty markets have never faced before, almost bringing us to our breaking point. As companies grapple with how to respond to unexpected changes, digital technology can offer means to enable work, connect people, promote interaction , and spread information across homes, countries, and organizations. We see examples everywhere! Some small references like my six years old daughter taking a dance class using a video-conference platform during quarantine, and others with impressive results, like BP saving 70c/barrel from commercial optimization by moving the planning platform to cloud.
What can you do to help your company´s bottom line?
While oil prices fluctuate hour by hour , companies are losing value. This means you must optimize your economic model, but there are obstacles to doing this:
- Lack of transparency leads to duplicate efforts across the supply chain
- It is difficult to make agile decisions to benefit your business
- Disconnected processes, people, and tools
In this extremely volatile environment, digital technology can help you build risk-based scenarios and define the “RISK SPACE” that your business can safely operate within. This agile approach is founded on clear value chain visibility , and it’s becoming a key differentiator for energy companies.
Today planners are running against the clock as opportunities open and close within minutes. But when their processes and platforms are integrated with data from your trading team, better collaboration means they can more quickly evaluate crude options, identify robust solutions, and spot sensitivity cases. In all, your team together can make better decisions that manage risks.
As mentioned before, BP is an excellent example of how digital technology improves work and business. The BP team improved margins across the global downstream business, cutting crude purchase decision time from two days to less than two hours . Beside significant improvement in margin, they have:
- Produced more robust and lower risk plans
- Increased the pace of communications and decision-making
- Removed the technology limitations, allowing BP to focus behaviors and training to drive further process improvements
“Believe it or not, for the same data set, the same crude and feed stocks, the same units, what used to take us seven hours to run now takes just over three minutes. I have to admit I didn’t really think that we’d get that out of cloud, so it has been quite revolutionary for us.
Claire Dickson, CIO of BP Downstream
If you want to learn about the strategies and solutions to tackle the current economic challenges and have the capability to optimize your entire value chain, watch the webinar: Value Chain Optimization - How Digital Strategies Can Drive Enterprise Collaboration and Unlock Additional Value to the Business .