How to keep business running smoothly amid M&As in the oil and gas industry
Product demands in the oil and gas industry have been rising exponentially recently, and there doesn't appear to be any slowdown in sight. As oil prices continue to linger around the $100-plus/bbl price, mergers and acquisitions (M&As) in the sector have been pushed to a three-year high, as well as private equity deals that may experience a record year. While the first half of 2021 witnessed the lowest oil and gas activity in the past 10 years, it began rebounding in the second half. And now, investors' hesitancies about the sustainability of returns in O&G seem to be subsiding. This can be seen in the $2.1 billion of M&A deals announced in May.
It's an exciting time of opportunity, but with each roll-up strategy comes challenges. For example, sticking with the same standardization of tools, solutions and technologies across all operations can cause a significant loss of time and resources. To navigate M&A, company leaders should invest in technology that is specifically suited for oilfield service providers, allowing for the easy migration of data and processes, post-acquisition, to help companies achieve the business results they desire during times of consolidation.
By investing in digital transformation, acquiring companies can better manage multiple business units, with different processes, through one system when bringing new organizations into the fold. These businesses also can be integrated quickly at a low cost. By creating a technological environment, the post-acquisition processes and data migration become more simplified and financially sound. They offer domain-specific functionality to suit each entity's unique needs while enabling them to communicate openly with each other. Ensuring business processes remain adherent and financially viable during the flux period guarantees the ability for maximum communication, when it comes to all aspects of running each business.
By utilizing an end-to-end field service management (FSM) solution, companies can easily solve typical digital transformation problems like business process workflow, knowledge transfer and user adoption, and field and back-office change management. Miscommunication issues can be solved easily by streamlining communication between accounting, field operations, and office management, all with the touch of a button.
Implementing change management
Implementing change within a workforce post-merger or acquisition is a very delicate process. Digital transitions and technology shifts must start at the top. From the top down, every employee must be on the same page. It's up to the top-level executives to ensure that everyone in their labor force understands the reasons and benefits of changing operations. Once everyone is in sync with change management procedures, it leads to fewer errors and a more productive working environment. Engaging employees builds a rapport that helps them understand and trust the process.
Training workers on a new platform is the next step in full digital integration. The focus should be on onboarding the user with tools and programs to assist them in the digital transition. The faster and more efficiently that the user can adapt to the new systems, the quicker the company will see ROI on its digital investment.
Several oil companies are struggling to upskill their laborers and adapt to a customer base that is more and more tech-savvy. To combat this, oil and gas companies can utilize configurative educational content to assist with the software learning curve. E-learning solutions are available to teach workers how to navigate digital platforms, complete with interactive tests that help train employees. Employees will quickly adapt and understand how to use the software and have a deeper understanding of how it simplifies their daily tasks and enhances their day-to-day work functions.
Putting it all together
Amid mergers and acquisitions in the O&G industry, implementing FSM solutions can help companies navigate and scale layers of newly acquired technology, helping create full transparency and open communication in all aspects of running each entity. Companies planning to shift to digital solutions must also be sure to see change through their workforce, implementing a strong change management plan and ensuring oilfield service providers can achieve the business results that they desire during fast-paced times of consolidation.
About the author:
Matt Danna is the Senior Director of Product Strategy at ServiceMax and has worked in software for over 25 years. Mr. Danna's background brings a depth of knowledge in software engineering, sales engineering, and product management. He primarily works with customers, key stakeholders, implementation managers, account executives, and developers to ensure alignment across all parties.