LINKAGE Q1 (2022) - BREAK THE BIAS
by Stanley R Wharton
The opportunities for digital transformation were highlighted recently in three virtual meetings on the importance of technological solutions for industry in the Caribbean region (Wharton, 2020, 2022). Countries and businesses alike are challenged to embrace industry 4.0 technologies—how to democratise and use technology—to derive added benefits for profitability, sustainability and growth. Many businesses that have not considered introducing technology owing to the lack of knowledge of the industry 4.0 revolution, are unaware of the benefits derived by early adopters. We can explore, therefore, why and how technology can be implemented within the countries, and a business, using Digital Twin technology.
The impact of the global COVID-19 pandemic encouraged businesses to introduce innovative technologies for collaboration when workers were confined to work at home. Many businesses that embraced new collaboration and connectivity tools realised improvements in growth through increased efficiencies. The dynamics and disruption by the global industry 4.0 technology initiatives allowed companies and industries to pivot towards new ways of conducting business. Technologies include innovative use of data—Big Data and analytics—to drive analysis and decision making, cloud computing, smart sensors, robotics, internet of things, augmented and virtual reality. Industry 4.0 is described as the ongoing automation of traditional manufacturing and industrial practices using modern smart technologies. The advent of the COVID-19 pandemic saw many companies adopting and leveraging these technologies to digitise their businesses, improve efficiencies and increase resilience.
Initially, few industries adopted the use of modern technologies. Even before the onset of the pandemic, a study by Cornelissen, Barkawie and Fansa (2019) showed that industries such as travel, hospitality and leisure, telecom, banking, retail and distribution, had embraced technology implementation into their businesses.
Interestingly, the oil and gas industry, with capital intensive and data-rich sectors along their Value Chain, in comparison showed the lowest average digital maturity.
The current scenario for industries is that standing still is not an option and with the tremendous challenges in industries, early adopters of technology implementation reaped the benefits. In a survey on COVID-19 impacts, the top priority for energy firms was to digitise their business activities, with two-thirds stating an intent to accelerate digital action plans (World Energy Council, 2020). There appears now to be a commitment to refocus on innovation for the years ahead with 42% reporting plans to increase R&D spending.
What does the energy industry landscape look like? For energy companies, many international energy companies have embraced and implemented innovative industry 4.0 technology solutions to increase efficiencies, resilience and sustainability. If we compare international companies with local companies, however, there appears to be contrasting will, abilities and expertise in adopting modern technologies. International energy companies operate within a different competitive environment and demonstrate agility, where decision making within upper leadership is concerned. These oftentimes possess bigger budgets, R&D departments, and critical capital infrastructure worth maintaining. Decisionmaking is usually top-down based on the company’s mission and vision, or with a renewed focus on strategy for renewables as for bp, Total Energies and several others.
For countries, investments are linked to development, and capital projects may be funded publicly, privately or through public-private partnerships wherein budgets for infrastructure are linked to wealth, borrowing capacity and vision. Two comparative cases are presented here. In the United States, the government committed a whopping US$550 billion in new federal investment for America’s infrastructure to focus on infrastructure and spending a once-in-a-generation investment for infrastructure (Probasco, 2022). In Guyana, our new oil and gas producer in the Caribbean and South American region, the government committed GY$96.1 billion [US$459 million] for fast-tracked infrastructure development which is part of a GY$552.9 billion 2022 Budget allocation [US$2.64 billion]. The two contrasting examples are for infrastructure capital allocation, but the allocation of big budgets for development can be related to individual businesses as well. Vast opportunities exist for countries and industries, particularly along the growth pole in the Caribbean region—Guyana—, but also CARICOM countries and the northern South American region, to embrace innovative technologies to support growth and sustainability for all participating members.
How do we adopt digital transformation in our countries or businesses to create efficiencies? On a governmental scale, countries have adopted e-government programs to better serve the public and for increasing economic growth and development. At the business scale, opportunities exist for quicker adoption of digital transformation in fields such as manufacturing and supply chain management. Digital transformation may be described as the process of using digital technologies to create new or modify existing business processes, culture and customer experiences to meet changing business and market requirements (Salesforce, 2022) through changes in practice and behaviours or change management. It considers how products, processes and organisations can be changed through the use of new digital technologies (Wikipedia, 2022).
In the process of digital transformation, a “Digital Twin” may be used as an enabler to help model digital processes and be used for decision making. The Digital Twin is described as a virtual representation of an object or system that spans its lifecycle, is updated from real-time data and uses simulation, machine learning and reasoning to help decision-making (IBM, 2022). It is not merely a 3D visualisation model! There is a responsibility within industries, however, to consider where in the business there can be efficiencies, and how to develop a business case for implementing innovative technologies.
Regarding big budgetary allocations for development, opportunities exist in “smart” infrastructure, where infrastructure management is realised through digitalised site information systems. New, during and after-construction phases for infrastructure projects can be digitised and managed in extended-reality metaverse platforms. Similarly, built infrastructure from upstream and downstream oil and gas sectors and cultural heritage assets can utilise Digital Twins. To manage disasters, and maintenance of aged and neglected infrastructure, the Digital Twin can be essential. Other key areas for application include civil, construction and geotechnical engineering, surface and subsurface resource extraction, geohazard and environmental engineering, land and asset management, energy and utilities, and archeology and cultural heritage.
Implementation of Digital Twin processes requires the development of a business case for innovation and collaboration, and for driving productivity by removing silos. These processes rely on people and on new ways of communication with the goal of realising value in operations. Digital Twin technology is expected to drive industry 4.0 initiatives through various processes as it offers a platform for measurement and control, especially for capital projects. Senior leaders may also have an opportunity to directly manage capital cost and delivery through Digital Twin collaboration platforms. End users and operators, team leaders and managers alike can be part of the overall implementation process.
The establishment of a Digital Twin technology into an organisation remains a process, hence many companies may struggle initially with its implementation. Some fail but many succeed by learning from their failures. Cyber security also becomes an important part of the process, especially for cloud computing but with the right security protocols, the risk can be significantly reduced. Digital Twin technologies can also be implemented in any industry that manages aggressive goals for the National Determined Contributions as they relate to the Paris Agreement.
CERDiT - The Center for Energy Resources and Digitalization Technologies. Contact: email@example.com or www.cerdit.biz
Cornelissen, B., Y. Barkawie and Y. Fansa, 2019. Standing still is not an option. Perspectives, Deloitte, Middle East.
IBM, 2022. What is a Digital Twin? What is a digital twin? | IBM.
Probasco, J, 2022. Understanding Infrastructure Legislation. Understanding the Recent Infrastructure Legislation (investopedia.com).
Salesforce, 2022. What is Digital Transformation? Why Is It Important - Salesforce.com
Wharton, S, 2022. Digital Twin Technology, an Enabler in the Digital Transformation Journey. 3rd Annual Guyana International Petroleum Business Summit. GIPEX 2022.
Wharton, S, 2022. Management of Caribbean Infrastructural Assets using Digitalized Technology Solutions. Caribbean Oil and Gas Virtual Summit. CARIVS 2022.
Wharton, S, 2020. Importance of Technology amidst the changing dynamics of how the upstream, midstream and downstream work. Caribbean Inaugural Virtual Oil and Gas Conference. CARIVS 2020.
Wikipedia, 2022. Digital transformation - Wikipedia.
World Energy Council, 2020. A vital transformation of global energy systems is underway. World_Energy_Council_-_Covid_2nd_Global_Survey_Results_-_FINAL.pdf (worldenergy.org).
Stanley R Wharton is the CEO of CERDiT – Center for Energy Resources and Digitalization Technologies
62 Maraval Road,
Newtown, Port of Spain
T: (868) 622-0340, 622-4466,
F: (868) 628-9428
Email AMCHAM T&T
P.O. Bag 150, Newtown,
Port of Spain
Trinidad and Tobago.
HSE Excellence Awards
National Youth Productivity Forum
Copyright © AMCHAM T&T