SAP recommends short IIOT projects for ROI checks

SAP recommends short IIOT projects for ROI checks

Sep 24, 2017
6 min read
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Hichem Maya, head of Industries at SAP MENA speaks to Pipeline Magazine’s Nadia Saleem about the state of readiness of the regional IIoT industry and how SAP is playing a role in it

How do you see the future of IIoT in the Middle East oil and gas industry?

The Middle East’s oil and gas industry is rapidly adopting IIoT solutions, and reimagining business models, processes, and ways of working by driving interconnected digital oilfields for business visibility and real-time decision-making.

Showing the strong potential for adoption of IIoT in the Middle East, energy innovation is a foundational stone of many of the Middle East’s nationwide digital transformation agendas, such as UAE Vision 2021, Saudi Vision 2030, and the New Kuwait 2035 Strategy.

What role does SAP play in this?

As one of the world’s leading digital transformation enablers, SAP’s Leonardo digital innovation system can provide the secure Internet of Things platform on the cloud in order to support next-generation applications that can scale up quickly and easily. The platform is augmented with artificial intelligence, machine learning, analytics and blockchain capabilities. These real-time business applications will be vital for delivering innovation across every business process – including exploration, production, and refining; human resources and talent development; and finance, procurement, and supply chain management.

In the Middle East, SAP is already co-innovating and exchanging best practices with the leading and most innovative oil and gas firms, including the Abu Dhabi National Oil Company (ADNOC), Saudi Aramco, and the Saudi Aramco Shell Refinery Company (SASREF).

On a global level, SAP is exchanging best practices from global IoT partnerships such as by joining the Industrial Internet Consortium and with Bosch, announced global investment of 2 billion euros over five years to accelerate IoT innovations, and further driving innovations with the acquisition of the enterprise-grade IoT provider PLAT.ONE.

How can the industry measure the ROI of IIoT adoption?

The Industrial Internet of Things’ biggest impact in the oil and gas sector will come from reimagining work – the transformation from a traditional, vertically-integrated oil and gas company into a digital energy network.

Middle East oil and gas firms that replace manual work with digital processes and real-time analytics, and connect assets and people for the right data on the right device can drive new levels of business competitiveness. With real-time data analytics from digital oilfield sensors, self-learning systems can predict maintenance, while innovative technologies such as augmented reality and drones can enhance safety and productivity.

Measuring the ROI of IIoT projects is vital. It’s important for CIOs to start with short and quick IIoT projects that can deliver quick ROI, and if they fail, are easier to determine what went wrong and quickly re-ploy a new solution. In discussions with customers, one of the quickest ways to find massive cost savings is with predictive maintenance.

 What research is being done to develop IIoT technology? What might we see coming up in terms of IIoT technology in the near future?

In the coming years, the Middle East’s oil and gas sector has strong opportunity to adopt IIoT innovations such as drones, robotics, 3D printing, and wearables to reimagine business models. In the near future, the IIoT ecosystem will be greatly enhanced with emerging technologies such as artificial intelligence, blockchain, and machine learning to solve business problems, accelerate transactions, and enhance security.

In the Middle East, SAP is driving research and development in IIoT technology with our recently-launched Co-Innovation Lab in the UAE. The lab, the 15th in a global network of Co-Innovation Labs, is facilitating project-based co-innovation with customers and partners, with a particular emphasis on driving Internet of Things innovations with the SAP Leonardo digital innovation system.

What are the risks of greater cloud connectivity and what measures can mitigate these risks?

While increasing automation in the IIoT era is making oil and gas workplaces safer, the greater connectivity with smart devices and collaborative robots is extending the network and potential for cyber-threats.

Cybersecurity needs to be a vital part of a wider digital transformation agenda, and should move into the boardroom with the risk of downtime and brand reputation. Increasingly, Middle East oil and gas firms are having a chief data officer or chief innovation officer take the lead in integrating digital processes to enhance cybersecurity, by educating staff, setting up a cybersecurity task force, and developing a robust cybersecurity risk-management strategy.

What would you say is the ideal system, and why? What are the key factors of this system?

The ideal IIoT system should be practical, useful, affordable, and secure. However, most Middle East organisations do not currently have the digital core needed for the Internet of Things solutions that will stream in massive amounts of new and different types of data from sensors, machines, devices, and social media. With a digital core running on an open cloud platform that is running real-time data analytics, oil and gas fi rms will be ready to experiment with IIoT.

As the costs of sensors, robots, and wearables continue to decrease, it may be tempting for oil and gas executives to develop all-new IIoT innovations from scratch. But the biggest cost benefi t may not be from digital disruption, but rather enhancing existing the supply chain. One recent study estimates that there is $65 billion worth of legacy IT systems in place. Instead of reinventing the oil rig, energy fi rms can easily add real-time sensors and new connectivity, along with accounting, data processing, and analytics. Firms need to meld existing and new IIoT technology.