In September, I spoke at The Financial Executives Networking Group (FENG) Houston Chapter meeting on ways various business functions can work together to speed and improve technology deployment in industries. The financial executives I spoke with had great feedback on how and why deploying new technologies in industries such as the energy industry is not as simple as mandating changes and requirements.
The reality is that it’s a supreme challenge to tie new technologies into industry decision making.
There are risks with anything new, and it’s work for engineers and operations professionals to assimilate new solutions into what they do. For example, incorporating composite materials into products requires changes in manufacturing, testing, assembly, operations and maintenance procedures.
With anything new in industries, it’s the collective effort of people pointing each other in the right direction that constructively leads to success. At the meeting, there were many positive ideas and messages expressed by the executives for business functions to generate greater results working together.
Greater Returns from Technology Deployment
The oil & gas industry can generate greater returns by speeding and improving technology deployment, which brings with it significant reliability and safety demands. The following is a quote from a senior executive expressing the difficulties of technology deployment in the oil & gas industry.
“We all want to make money and it does us no good to develop leading edge innovation if we can’t deploy it.”
– Lloyd’s Register Energy, “A focus on technology deployment, Oil & Gas Technology Radar, Houston Executive Briefing,” 2015
This isn’t surprising. The oil & gas industry has a very challenging combination of:
- Innovation & change
- Lots of people, functions & specializations
- Many different types of companies
- Many different types of equipment and structures
- Many different suppliers and service providers competing
- Major construction projects
A technology manager I know in the oil & gas industry has stated that injecting new technologies into oil companies is the biggest battle in the industry. The reality in engineering and operations departments is that there are all sorts of tasks, changes and resources people are responsible for.
Employee positions have many specializations, so mandating change is difficult. For example, you typically can’t just say all mechanical engineers in a company need to have all the skills necessary to run a certain piece of equipment. With new things comes uncertainty and people asking the question, “Will our employees be able to constructively tie this into their decision making and resources used for the benefit of the company?”
People Impacting Success – 6 Stages
Executives express a lot of concern over whether or not solutions will play out successfully based on people challenges from engineering to operations.
In fact, there are really “6 Stages” we discussed that dictate how successfully an industry solution is deployed, and these “6 Stages” require multiple contributors from various functions:
1. Determining how functions/groups impact productivity and avoid problems
2a. Keying in on how and why solutions will play out successfully
2b. Building out what should become part of managers’ decision making
3a. Determining the best ways to assimilate solutions
3b. Tying solutions into company/industry
3c. Improving the utilization of solutions, resources and cross functional support
Just consider all of the varying contributions it takes to get composite materials reliably incorporated into engineering designs. At first, departments are reluctant to use composites, and many problems are caught in test labs and elsewhere. The following are just some of the functions that play a role in both increasing productivity and avoiding costly problems as they make their contributions.
Insights from Financial Executives
Considering that companies look at both ROI (Return On Investment) and how and why solutions will “play out” successfully, I posed these questions to the financial executives,
“How can we strengthen your convictions that solutions are good?”
“How can we shine a light on the effectiveness of solutions in your mind?”
“How is finance best involved in the above ‘6 Stages’ of solution deployment?”
Their insights were very significant as they key in on ways finance can help improve technology deployment in industries. The following is some of what was recommended.
Contributions Improving Technology Deployment
Engineering workforce challenges and company processes are intertwined. As decisions and resources improve, finance can better track data, success and failure stories, and resources while improving their understanding of investment choices. This can then feedback into improved design processes, operations processes and investment decisions.
Engineering departments have “stages” for their design processes along with “gate” meetings for getting to the next “stage.” As various functions such as finance constructively contribute to workforce solutions associated with technology deployment and spread successes, they can improve the effectiveness of engineering design processes throughout the “stages” and “gates.”
It was also said that accounting has process and workforce challenges similar to engineering. As oil companies spread their solutions to these challenges, various departments can increase their contributions to both improving productivity and avoiding costly problems.
This makes technology deployment more successful for all of the “6 Stages,” and as the “6 Stages” improve, so do speed, reliability, safety and the effectiveness of the financial function. In turn, money gets allocated to the right resources, projects and companies more easily, and greater returns are generated with less risk.
This is good for everyone.