Digital transformation is driving a sweeping change around the world. For an emerging country in the developing world, India has been quick to brace the digital future. Companies in India are doing a commendable job of digitalizing their operations to an upscale business. From banking and telecom to retail and manufacturing all sectors have willingly incorporated the ‘Digital India’ initiative in their processes. The connectivity aspect of digital transformation has empowered millions of people, and at the same time providing businesses with excellent opportunities for value creation and expansion.
While the digital wave has led to an extraordinary paradigm shift that requires businesses to align and realign all their operations in the digital era, the human resources function in many organizations in India is still lagging. KPMG in India’s report on ‘The future of HR in India in 2019: In the know or in the no’ indicates that 91 percent of the 90 HR leaders surveyed in the country highlight the importance of digital transformation, but only 60 percent feel mildly confident to be able to do so. Globally, 67 percent HR executives in O&G companies agree that HR is experiencing digital transformation, but only 41 percent said that they have a digital work plan in place. Amidst this rapidly evolving technology, 70 percent CEOs surveyed in ‘Growing pains - India CEO Outlook 2018’, consider data scientists as the most important part of their workforce in supporting their organization’s growth plans. Talent hiring, therefore, is also transforming parallelly across sectors.
Over the decades, the Oil & Gas industry has played a pivotal role in the economic transformation of the world. Presently, predictive analysis is steadily offering a breather to many players in this domain. Besides enhancing the business, it has the potential to offer some practical solutions to the above-listed challenges. In KPMG in India’s Future of HR in India in 2019: In the know or in the no’ report, 80 percent of HR leaders in India have expressed deep interest to invest in analytics and newer technology linked interventions over the coming next year or two.
As a core sector of the Indian economy, it has an opportunity to redefine its boundaries through digital transformation. Though digitalization has been a source of positive change for the sector, it is yet to realize its full potential. Several challenges stand in the way of oil and gas companies that are treading on the path to digital transformation. It is riddled with constant upheavals such as: falling crude prices, rising costs of extraction, difficulties of exploration, economic downturn, fluctuating prices, untamed competition, frequent budget and schedule overruns and turbulent state of international politics, and greater demands of climate change accountability.
In a bid to save above the ground costs, many oil and gas companies refrain from investing in tech advancements which can help ease operations and for that matter hiring. Smart investments in technological adoption in key operational areas is now more important than before. The sector also suffers from attracting talent. Reports suggest that the permanent workforce in India's oil and gas PSUs declined by more than 2,000 in the last financial year. In the past 16 years, there has been a 14.65 percent decline in the permanent workforce employed by all the oil and gas companies.
Digital is going to be a key enabler in oil and gas to reduce costs, make faster and better decisions, and to increase workforce productivity. A majority of companies, however, are yet to reap the benefits of digital in terms of improved financial performance. Oil and Gas companies must take cognizance of the fact that human resources will no longer be an enabling function. It will be the driver of business success and sustenance in these volatile, uncertain, complex and ambiguous times.
The rise of digitalization in the industry also poses the challenge of cybersecurity. In India, the nature of cybercrime incidents has evolved to become more frequent, sophisticated and complex in nature, making cybersecurity one of the top priorities for Indian organizations today. In an already risk sensitive industry like Oil & Gas, enterprises need a dynamic cybersecurity framework supplemented with the right skills and tools to build a resilient enterprise. KPMG in India’s India CEO Outlook Report 2018 indicates that though future proofing against cyber risks is on their mind, implementation has not been on par with the intent. While 50 percent of CEOs consider cybersecurity specialists most important in supporting their organization's growth plans, only 37 percent of them believe that their companies are well prepared to counter a future cyber attack.
According to data released by the Department of Industrial Policy and Promotion (DIPP), the petroleum and natural gas sector attracted FDI worth USD7 billion between April 2000 and June 2018. Going forward, this growth and investment momentum and increasing emphasis on clean energy is slated to scale employment in the sector, as well, making HR the cog of the oil and gas business wheel. Smart investments to integrate businesses with its constantly evolving ecosystem and aligning technology with people is likely to become more important for this sector. After all, an amalgamation of people and technology is an excellent source of differentiation and value creation for companies across sectors.