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How Technology Is Changing the Oil and Gas Industry
The way technology helps improve the oil and gas industry is twofold. First, you have improvements in mechanical technology. Second, you have the improvements that come from the increased use of sophisticated digital technology. In other words, the oil and gas industry is experiencing a boost in both hardware and software fields, which results in greater safety, profitability and overall efficiency. Here are six important improvements.
1. Monitoring capability
When it comes to the oil and gas industries, it cannot be overstated how vital safety is. The best way to increase it would be to monitor various relevant metrics and set up an alarm notification system that will alert you if anything goes wrong. The best thing about this is the fact that it requires minimal human presence, as well as the fact that all of these systems can be shut down automatically and remotely. This means that technology reduces the number of hazards that people in the industry are exposed to.
2. Reducing operating costs
Digital technology allows for a lot more efficient programming of your equipment, which helps you achieve much greater efficiency. This way, the energy-per-performance ratio is at its all-time-highest and the waste produced is minimal. The damage to the equipment is also minimal and so is the downtime. In other words, capital expenditure can be drastically reduced with the use of digital technology (in some scenarios, even down by 20 percent). One example of this increased efficiency is the fact that you can achieve a better usage of reservoir space, with the help of digital technology.
3. Predictive maintenance
With the help of the above-listed monitoring capacities, you will be able to not just reduce the level of danger that people in the industry are exposed to but also become more efficient when it comes to predictive maintenance. What this means is that an oil company can make an estimate of how many working hours some of their equipment has left and to make orders for replacement parts online. This way, the downtime (which can be incredibly expensive in this industry), can be particularly effective. Other than this, finding suitable oilfield equipment and doing your research is far easier than it ever was before.
4. Better marketing distribution
Even in the oil industry, proper use of marketing can make or break your success. Therefore, the use of technology and analytics can make all the difference. Studying the prices of other companies in order to remain competitive is just one way of achieving this. The same goes for studying consumer habits. All of this can be used to properly tailor your business model and ensure that it’s aligned with the rest of the industry requirements. For you, as a business, each of these changes increases either profitability or the cost-effectiveness of your processes, even if it doesn’t directly improve the performance of your hardware.
5. Reducing the human cost
Human labor is a major factor in the oil and gas industry. The problem lies in the fact that these are highly paid jobs that are always in demand, which makes the job market quite troublesome for companies. By being able to entrust at least a part of this workload to present-day technology, the efficiency would be drastically increased. However, this doesn’t mean that the human workforce in the industry will become unnecessary or obsolete. Real, human operators will always be indispensable.
6. Setting up infrastructure
Through more efficient calibration, determining the ideal position for the facility is now more reliable than it ever was. Other than this, with the advancements in construction equipment, it is now possible to achieve a significant reduction in the construction cost. This is especially important due to the fact that a major part of this construction is below the surface. Later on, when you have to decommission the facility, you also have an easier job of doing so. An easier job is always a more frugal project, as well. All in all, these improvements seem to be growing at a substantial pace.
All of these savings allow for companies to make savings where it’s most important. This allows you to keep the oil prices somewhat lower, which, in turn, creates a substantial boost to one’s market share and total market value. In this scenario, however, what’s good for the major company is also good for the market, which means greater safety, greater cost-efficiency and stronger oil industry, overall.
Primary Founder, James Billson, Shares Insight On How to Build Better Software with Application Modelling
James Billson has seen it all in the tech world. He started his first pizza delivery business at a time when Wi-Fi didn’t exist and orders had to be delivered by fax.
This business transformed into a software development outfit, and with it, he witnessed the rise and fall of tech in the early 2000s.
He made his grand exit with a sale to international advertising behemoth BBDO. He now runs Primary, the result of his years of development service experience. In this article, he shares a simple agile technique for building better software.
Agile methodologies are here to stay. They have received widespread acceptance in the sphere of software development. An agile approach helps teams to work together as well as with their stakeholders.
Agile practices help development organizations focus on their individual end-users and the way they interact with products.
Actions speak louder than words, and in software that is part of the problem. In the Agile Manifesto, having ‘working software’ is prioritized over compiling comprehensive documentation that exhaustively defines the product before development. Coincidentally, this manifesto was written by coders, and the universal belief of a coder is, if there is a problem, code it. If we extend the definition of ‘working software’ to include an application model, opportunities to work faster and more efficiently arise.
Introducing Application Modelling
Much like in manufacturing, product modelling can be used as an alternative route to effective application design. Modelling is the process of creating a simulation that gives insight into how the real product will function at the end of the development process.
There are many merits to this approach. First, it re-creates the full size and expanse of the product, in a holistic full-dimensional way that allows due consideration of all its facets. This way, it helps the team to understand the features of the product better and translate it into a design that the users can also comprehend. Finally, it presents all the necessary information in a light and vivid format rather than the dull and impenetrable nature of typical requirements documentation…
With a well-developed application model, there is direct access to the full scope required for the development process. It removes the likelihood of overlooking future steps and pathways by revealing the features of the future product.
Involving the Whole Team with Modelling
Modelling creates a unique environment for synergy among the UX team, the developers, and the product owners. A product model is an agile system that allows real-time creation and modification. All parties can raise potential concerns and create a matching solution as work progresses. In comparison to a ‘straight-to-code’ process where decisions are usually made during development, application modelling greatly saves time and team resources.
Telling Stories with User Flows
James Billson founded Primary.app to give developers an easy way to conduct product modelling. However, beyond simply using a tool, there must also be a systematic approach.
Developing a product model should be very much like telling a story. A story has a single important ingredient that allows its teller to connect with audiences. This is the narrative. To find this narrative, the development team must create user flows. A user flow is a series of steps that outlines the journey of the product user through the life cycle of the application. The user is the hero, and over each step, we see what they do, how they do it, and why they do it.
The narrative of the flow is the backbone to which you attach the details and conditions that will inform the different aspects of the product work. Once you have that overreaching structure in place, you can manipulate and modify details, creating different user scenarios and comparing end results. All of this can be done without making any grave changes to the main body of the model.
User flow models have another advantage in helping product managers to avoid the pitfall of ‘happy pathways’.These happy paths are easy and fun when you are looking at an engaging prototype that has all the characteristics of your minimum desirable feature set. However, the building process will reveal all the other less exciting processes that are needed to support these main functions, leading to a development lag and a generally uncoordinated process. A user flow-based model will highlight these necessary support functions and help you stay on top of them from the very beginning.
Modelling is The New Documentation
Comprehensive documentation fell out of favour because it became seen as a blocker to creativity. Development teams want the freedom to identify opportunities that arise from seeing the product in operation. As decisions are made in development, the document becomes increasingly redundant. The long descriptive passages and confusing diagrams did not lend themselves to easy updating.
Application modelling completely redefines all of this. It is a light system that can be edited and modified in real-time. The entire team can make input based on the progress to date and see those ideas implemented in the following sprints. The result is a clean and compact model that mirrors the reality of the developed application.
At Primary.app, James and his team have created a system that allows users to build large application models that are easily modifiable and constantly under development. Models can be changed any time, in response to key drivers that affect the app functionality in real life. It is as easy as changing sheets or doing the dishes before heading out.
Application modelling is the future of software development. User flow-based models of your app can be created with minimal resources, and then used to engage product team members for maximum and meaningful output. What you get is a comprehensive system that can be modified and iterated to synchronize with your desired result perfectly.
For SaaS Startups, Freemium Beats Free Trials
Let’s get one point out of the way — your customers don’t really care very much about your aspirations for an IPO and shareholder liquidity.
It’s an intuitive statement, but one that, in my experience as an investor, entrepreneurs often overlook when bringing a Software as a Service and other subscription-based startups to market. Just the other day, I was advising a pair of co-founders for a European startup who are expanding into the U.S. market. They were primarily focused on setting up their go-to market strategy to get to profitability within 18 months and then pay dividends to their investors. These founders made plans to build their business on a platform of paid subscribers and walled off any interest from a free user base that might last beyond a brief trial.
Theirs was a viable strategy, but not one suited to sustainable and strong growth. When founders for SaaS startups focus solely on free trial or paid only models that will allow them to repay their investors as quickly as possible, they curtail their company’s potential growth and can actually underrepresent the interests of their consumers. To succeed with a SaaS model, entrepreneurs should make a case for why customers should even bother to sign up or pay in the first place — and frequently the best way to accomplish that is to hook their users by demoing their services on a freemium model.
The Value of a Freemium Hook
When I spoke to the co-founders mentioned above, I pushed them hard to turn their free trial plans into a full-blown freemium model. It’s simple math; as marketing researcher Vineet Kumar put the matter in an article for the Harvard Business Review, “All other things being equal, you would do better to convert 5% of 2 million monthly visitors, for example, than to convert 50% of 100,000 visitors.”
The research backing the freemium approach is compelling. Researchers have found that a free user is typically worth as much as 25% of what a fully-paid user is, and often brings significant value in the form of referrals. According to findings circulated by Kuman, these referrals plus a free-first approach can create a moderate conversion rate of between 2% and 5%. Those percentages may seem small, but when a SaaS startup’s cultivated user base counts in the tens of millions, they can bring in significant funds.
That’s the value of a freemium model, and we see examples of its success everywhere — from our Hulu channels to Dropbox accounts and Linkedin profiles.
However, such a model won’t find viral success immediately. Going freemium isn’t just about offering your product for free, it’s about how you do it, what you share, and what you withhold from free consumers. Why should people take the time to sign up for a free account? What makes your freemium model compelling, and how are you retaining or extending your Premium features to make your product the best in the pack? It’s not enough for SaaS startups to have a solid product and an accessible subscription model — they need to know which features to include in the free version to make it useful enough to demonstrate value, and which features they should offer to make signing up for a Premium subscription not just an attractive choice but an inevitable decision.
Let’s consider Spotify as a case study.
Spotify – A Case Study for Viral Freemium Success
Spotify was founded in Stockholm, Sweden, in 2006. Its founders, Daniel Ek and Martin Lorentzon, intended the platform to be the legal answer to the digital piracy that had plagued the music industry at the time. Their subscription streaming services proved to be precisely what consumers at the time needed, and Spotify came to revolutionize streaming music. It continues to dominate the industry today; according to the company’s 2019 Q1 earnings report, the platform now boasts 217 million monthly active users and 100 million (46%) paid subscribers.
It’s worth looking at the numbers, here. Spotify’s percentage paid rate stands out as a far cry from Kuman’s average 5% free-to-paid conversion rate. There are several reasons for this; first, Spotify found its niche and established itself as a foremost service provider early on in the streaming era, allowing it to gain a high number of subscribers before its competitors found their footing. Secondly, (and more relevantly for SaaS entrepreneurs) Spotify carefully designed its free packages to provide exactly what consumers needed — but not what they hadn’t yet realized that they wanted.
Spotify’s free package offers users the wide music selection and on-demand features they want. However, it does so at lower sound quality than its premium offerings and only when the user has an internet connection. Spotify Free also interrupts users’ music streams with periodic advertisements. Premium, on the other hand, is entirely ad-free — and comes with higher sound quality and download capabilities to boot. Premium offers an answer to all the grating inconveniences that subscribers didn’t realize that they had until they tried Free and realized that they could have an ideal experience by upgrading. It removes the ads, the service interruptions, and low-quality offerings. For many subscribers, the convenience that those top-tier features provide is well worth the price of a premium subscription.
The company has also found creative ways to hook users on their Premium offerings without first signing on to Free. In the last year, Spotify made a deal with Samsung to ensure that all consumers who purchase Samsung’s Galaxy S10 will receive a six-month free trial for Premium and the app pre-loaded on their phone. This deal will allow new customers to become accustomed to the conveniences of their Premium offerings and — when the trial comes to an end — either struggle with the now-unfamiliar inconveniences of the free package or sign on for a subscription.
For early stage founders focused on liquidity, a freemium model may seem not adept enough at gathering paid subscriptions and reaching profitability quickly. In particular, as the market for capital formation tightens and the IPO window gets more challenging, controlling cash burn is important. In practice, however, freemium platforms aren’t centered on giving a service away for free but scaling quickly and efficiently. Your platform and message can reach a much larger base faster and if you have strong marketing and conversion strategies you can persuade a tangible portion of the subscriber base that your premium package is worth the upgrade. Successful freemium services achieve impressive, long-term gain by building on a bedrock of carefully-selected free services. This ultimately can make them more beneficial for investors and customers alike.
When founders build SaaS businesses, they can’t focus solely on providing returns to their investors. Instead, they need to strike a balancing act that weighs the needs of consumers, investors, and the business itself. Freemium models can help founders accomplish this — but only if they can hone in on the why behind their business, find out what their customers will value the most (preferably before they have to ask for it), and craft premium and free packages that make upgrading a necessity, rather than a luxury.
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