What the Heck is Digital Transformation?

For the past several years vendors, integrators, and industry commentators have been harping on "Digital Transformation". What the heck is this thing? Why does it need such a fancy name?

We work a lot in oil and gas. "Digital transformation" as a phrase lands flat in our industry. It sounds buzzword-y. It's all buzzword-y. No one in the field gets it, and middle management thinks they already have it handled. That is the real problem. Oil and gas companies are "connected enough" to think they do not have a problem.

They do.

Digital Transformation is a Strategy, Not a Project

A digitally transformed business uses software and digital infrastructure to get information from the plant floor to head office quickly. This allows a digitally transformed company to solve problems with data not feelings while including all layers of the organization in the process.

Because it is a strategy, it is more of a journey than a destination - and different companies are at different points on that journey. One company might be tracking everything in a central spreadsheet. A manufacturer down the road is getting started by connecting equipment and systems together. An energy giant is plugging in AI to make decisions faster. All three are doing digital transformation. The difference is maturity.

What is important here is to recognize the value of connecting nodes and people in the business to a digital infrastructure and then doing something with the data. Companies get successful with a DT strategy when they actually use their infrastructure to find answers and solve problems that make their business better.

So... Is There an ROI?

Yes, it is so hard to measure, and here is why.

Digital Transformation does not improve one thing. It elevates everything. That makes it nearly impossible to isolate a single ROI number. Remember this is a strategy and a journey, not a single project. The results are unmistakable when you see them.

We work with a highly connected oil and gas company that has been more digitally mature than their peers for years. Their automation, communication, and IT costs run a little higher. But they have lower overall facility construction costs, produce more per capital dollar spent, and carry lower operating expenses. They outperform on almost every metric that matters. Their commitment to the strategy is paying off — not in one place, but across the entire business.

The companies we see succeeding have four things in common: they have a strategy, they bring their people into it, they break down the silos, and they execute the plan.

The Roadmap

Let's get the rubber on the road now that we know what Digital Transformation is. Here are the early steps for digital transformation at a high level:

1. Connect - Get machines, systems, and people talking to each other

2. Collect - Capture the business current state

3. Store - Start historizing and making the data available

4. Analyze - Ask questions, get curious

5. Visualize - Make it visible and let people see what is happening

6. Find Patterns - Look for trends, anomalies, and opportunities

7. Report - Share what is learned

8. Solve - Act on what you found

9. Rinse and Repeat - you just completed one leg of the journey, keep going

We will dig into each of these steps in a future article. For now, this is the framework - the order of operations for getting from disconnected to digitally mature.

Where to Start

The roadmap might feel overwhelming, but it shouldn't. Every company starts somewhere small. Here is how to get moving:

1. Start with the strategy. Figure out the why and what of your digital transformation. Get your people aligned with it before you start building.

2. Assess where you are. Do a digital transformation maturity assessment to see where you are starting it. Include your whole organization if you can, focus on your plant or area of authority if you can't. Know where you are starting.

3. Log your opportunities and problems. Write things down. Listen to the plant floor. Keep a running backlog of potentials that the business can act on.

4. Design your digital infrastructure. Consider using Unified Namespace (UNS) as the trunk of the tree. List out the possible nodes, producers, and consumers of data, show how they connect today and how they should connect in the future.

5. Look for easy wins. Hookup that one PLC that is beside a network switch with machine state and start calculating downtime. Maybe digitize the work order whiteboard and replace it with a TV. Eliminate the compressor grease sheet and pull straight from the PLC. These are moves that help build some momentum and prove the value.

6. Stand up the infrastructure one piece at a time. Setup a Postgres database. Spin up a MQTT broker (if you decided to architect it this way). Put in a visualization platform. Add code and logic to your PLCs to standardize the data and calculations across machines and sites.

Learn from what you connect and keep going.