Given Gartner’s report that 80 to 85% of all AI initiatives fail, where is the disconnect occurring between sourcing, buying, and implementing a solution?
What is the benefit of building an analyst solution map if you can’t ask your selected providers pointed and timely questions beyond the general “industry speak” of features, functions, benefits, new client wins, and making someone’s Top Ten list – mine included.
This post’s format is simple – I will list the Top Challenges specific industry sectors face and ask the providers to succinctly and effectively tell us where they can address these challenges directly, indirectly, or not at all.
I will email the link to this post to each solution provider requesting a response and share the results in a “sooner rather than later post.“
Today, we look at the oil & gas industry.
5 Challenges Facing the Oil and Gas Industry (Source: Travelers)
Oil and gas companies often operate in a challenging risk environment. Financial risks, such as higher costs and fluctuating energy prices, together with safety concerns and other ongoing factors have the potential to impact a company’s bottom line. Identifying industry challenges and having an effective risk management program in place to address them can help minimize exposures and keep your company ahead of market changes. Below are five significant challenges facing the oil and gas industry today.
Litigation Trends: Societal trends such as social inflation can increase the risk of an oil and gas company facing a lawsuit. Changing views toward increased litigation and evolving plaintiff attorney tactics are among the factors contributing to more lawsuits and higher jury awards. The average jury verdict in the National Law Journal’s Top 100 Verdicts more than tripled, from $64 million to $214 million.
The Shifting Energy Landscape: Geopolitics, global market disruptions, changes in the mix of energy sources and a focus on transitioning to lower-carbon energy systems will likely alter the future of the oil and gas industry across the planet. As demand for renewable energy continues to grow, oil and gas companies may need to plan steps toward meeting carbon-neutral and climate-affecting goals.
Supply Chain Impacts: Supply chains are increasingly complex and subject to a number of variables, such as price increases, equipment shipping delays and weather events. Aspects of drilling exploration, extraction and production may experience increased costs, as these supply chain disruptions that began during the COVID-19 pandemic could be an issue for the foreseeable future.
The Labor Shortage: One of the biggest challenges facing the oil and gas industry is a steady decline in the available workforce over the past 10 years. Fluctuations in the industry, coupled with sometimes difficult work conditions in remote areas, has caused some workers to leave the oil and gas industry for more stable positions.
Market Volatility: World events and natural disasters can disrupt otherwise smooth business operations and affect bottom lines across the oil and gas industry.10 During times of volatility, it is helpful to have a strong business plan in place, with attention to capacity and reserves, and develop a comprehensive risk management program and a current business continuity plan. These strategies can help to secure operations amid business changes and help companies adjust to a cyclical market. Should an event such as a critical equipment failure, cyberattack, fire, flood or earthquake transpire, solid planning can help restore operations quickly.
EDITOR’S NOTE: If I missed any challenges that should be on the list, let me know, and I will get back to you with an answer(s).
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Procurement Insights
Are Solution Providers Solving The Right Practitioner Problems?
Posted on May 28, 2024
0
Given Gartner’s report that 80 to 85% of all AI initiatives fail, where is the disconnect occurring between sourcing, buying, and implementing a solution?
What is the benefit of building an analyst solution map if you can’t ask your selected providers pointed and timely questions beyond the general “industry speak” of features, functions, benefits, new client wins, and making someone’s Top Ten list – mine included.
This post’s format is simple – I will list the Top Challenges specific industry sectors face and ask the providers to succinctly and effectively tell us where they can address these challenges directly, indirectly, or not at all.
I will email the link to this post to each solution provider requesting a response and share the results in a “sooner rather than later post.“
Today, we look at the oil & gas industry.
5 Challenges Facing the Oil and Gas Industry (Source: Travelers)
Oil and gas companies often operate in a challenging risk environment. Financial risks, such as higher costs and fluctuating energy prices, together with safety concerns and other ongoing factors have the potential to impact a company’s bottom line. Identifying industry challenges and having an effective risk management program in place to address them can help minimize exposures and keep your company ahead of market changes. Below are five significant challenges facing the oil and gas industry today.
Litigation Trends: Societal trends such as social inflation can increase the risk of an oil and gas company facing a lawsuit. Changing views toward increased litigation and evolving plaintiff attorney tactics are among the factors contributing to more lawsuits and higher jury awards. The average jury verdict in the National Law Journal’s Top 100 Verdicts more than tripled, from $64 million to $214 million.
The Shifting Energy Landscape: Geopolitics, global market disruptions, changes in the mix of energy sources and a focus on transitioning to lower-carbon energy systems will likely alter the future of the oil and gas industry across the planet. As demand for renewable energy continues to grow, oil and gas companies may need to plan steps toward meeting carbon-neutral and climate-affecting goals.
Supply Chain Impacts: Supply chains are increasingly complex and subject to a number of variables, such as price increases, equipment shipping delays and weather events. Aspects of drilling exploration, extraction and production may experience increased costs, as these supply chain disruptions that began during the COVID-19 pandemic could be an issue for the foreseeable future.
The Labor Shortage: One of the biggest challenges facing the oil and gas industry is a steady decline in the available workforce over the past 10 years. Fluctuations in the industry, coupled with sometimes difficult work conditions in remote areas, has caused some workers to leave the oil and gas industry for more stable positions.
Market Volatility: World events and natural disasters can disrupt otherwise smooth business operations and affect bottom lines across the oil and gas industry.10 During times of volatility, it is helpful to have a strong business plan in place, with attention to capacity and reserves, and develop a comprehensive risk management program and a current business continuity plan. These strategies can help to secure operations amid business changes and help companies adjust to a cyclical market. Should an event such as a critical equipment failure, cyberattack, fire, flood or earthquake transpire, solid planning can help restore operations quickly.
EDITOR’S NOTE: If I missed any challenges that should be on the list, let me know, and I will get back to you with an answer(s).
30
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