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Enabling rational decisions through digital oilfields

Published by
Hydrocarbon Engineering,

Hemant Kumar, Wipro Ltd., explains how the concept of a digital oilfield (DOF) can be optimised to increase productivity.

DOF (Digital Oil Fields) is a widely practiced initiative in the upstream oil and gas industry. The industry broadly defines DOF as a business improvement program aiming at developing organisations’ capability for faster and better decision making through a combination of collaboration enablement, workflow automation, and information management and decision support system implementation.

Implementing DOF is a serious business, however. First, multiple value drivers in the organisation are targeted, with each value driver presenting scope for a number of capability-improvement opportunities across people, process and technology dimensions, requiring various types of skills. Secondly, the organization needs to make significant resource commitment for implementation over a long period of time.

At the same time, selecting and prioritizing the right improvement opportunities in the DOF scope is crucial to success. We have seen many DOF programs struggle to deliver value due to poorly defined, misaligned or over-ambitious scope, resulting in lost opportunities and value erosion. A robust opportunity-framing methodology is a must for organizations embarking on their DOF journey to generate maximum value out of it.

This article explores a decision-based opportunity-identification framework that can be applied to develop the right scope in new DOF programs or ascertain if the right opportunities have been included in existing DOF programs. Framework has a simple explanation to it. It identifies the key business decisions underlying business value drivers and then identifies key capabilities that need to be developed to improve these decisions. These capabilities are finally translated into opportunity statements that are used to build DOF scope.

It is not the intention of this article to claim the superiority of this framework vis-à-vis other methods. At the same time, we believe that having this framework is highly useful in three aspects.

  • Since it uses value drivers and decisions as starting point of scope development, it can comprehensively uncover opportunities
  • It makes it easy to build and communicate the DOF business case in the organization by transparently tying opportunities with business decisions
  • It helps in the better execution of benefit realization plan since the business benefits are measured in terms of the decisions and value drivers

Additionally, this framework can augment alternate methods that may be chosen for DOF opportunity identification, which is described in greater detail later in the article.

In the following section we have outlined five steps that can be followed to develop a decision-based opportunity-identification framework.

5-Steps in Decision-Based Opportunity-Identification Framework for DOF Implementation

Identify value drivers and key decisions – Construct an organisation value driver tree. Start your primary business value drivers and break them down into sub-value drivers. Once you have reached decision nodes in the tree, you can identify common decisions taken under respective decision nodes.

The following illustration shows an example of this concept. It identifies “Maximizing Recovery” as one of the primary value drivers and breaks it down into multiple levels of sub-value drivers until it finds a decision node: “Select Control Option for Gas Break Through”. It then identifies key decisions under decision node. Similarly other decisions nodes can be identified for other value drivers and expanded to list underlying decisions.

An illustration of a value tree breaking down business value drivers into low level operational drives and identification of key decisions for one value driver.

Decisions can be grouped into short, medium and long time-scales which helps in further prioritization, as seen in the following table:

An illustration of decisions.

Develop and prioritise the capabilities required to support decisions - Next, you identify capabilities required to support all decision nodes. Capabilities can be categorized under following themes:

  • Collaboration: Efficient and structured collaboration between different disciplines
  • Workflows: Streamlined and well specified workflows
  • Tools: Standard tools and visualization systems
  • Decision support systems
  • Information Management: Good quality, real or relevant time data easily accessible

For each decision node, you list key requirements under each capability theme. By repeating this step across selected decision nodes, you end up with a comprehensive list of capabilities grouped into themes. For example, you have one list for all Tools related capability requirements.

Following illustration shows various capabilities listed for decision node, “Select Control Option for Gas Break Through”.

An illustration of capability identification to support various decisions occurring across various time-scales.

Once you have consolidated all capabilities you can further prioritise them based on decision time-scale or capability areas. For example you could consider only short time-scale decisions for your scope.

Assess capability requirements against existing or work-in-progress solutions to identify DOF opportunities - For each capability requirement you can analyse existing solutions in the organisation to identify gaps where capabilities don’t exist. These gaps become opportunities. Moreover where capabilities exist, it’s useful to do a high-level maturity assessment to gauge their effectiveness and suitability for inclusion in the opportunity list.

Consolidate and prioritise opportunities and develop a DOF implementation plan - Once you have identified opportunities you consolidate and prioritise them for implementation based on criteria such as their value and complexity. You then develop an implementation plan that sequences execution of various opportunities.

Create an Opportunity Register for benefit tracking - Finally you should document all the opportunities along with their relationship with key decisions, assumptions and business justification in an opportunity register. This is a must before the implementation begins. This serves as a baseline to track improvements against the expected benefits post implementation.

Applicability to Existing DOF Implementation

If you are already implementing a DOF program, a decision-based framework can help in identifying gaps in your opportunity portfolio and do course correction. To do this, you need to follow two simple steps. 1) Construct a value-driver tree and mark the important value-drivers and decisions that you need to address through the DOF program 2) Map your existing DOF opportunities to value-drivers and decisions to identify the gaps

These two steps will help you identify value drivers and decisions that are not addressed in the DOF program. The opportunity portfolio can then be adjusted to make it more focused and business-aligned.

End note

We recognise that this is a rigorous methodology and you may choose alternate approaches given time or resource constraints. Even then we highly recommend using certain principles from our framework given their benefits. For example, constructing a value-driver tree as explained above can help you uncover gaps in your DOF opportunity portfolio and align it to your value drivers. Similarly it can also help you eliminate opportunity that doesn’t align with your value drivers.

In the end, if you could do whatever it takes to identify the right DOF scope, it will significantly boost your chances of success in your DOF journey.

Adapted by David Bizley

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