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Oil & Gas Reference Architecture

Capability Maps, Value Streams, and Strategy Maps for Oil & Gas Companies

Analyst Perspective

In the age of disruption, IT must end misalignment and enable value realization.

A reference architecture helps accelerate your strategy design process and enhances IT’s ability to align people, processes, and technology with business priorities and objectives.

• A capability map is a generic value chain, independent of any system.
• It covers all core Level 1 and Level 2 oil & gas capability components, specifically exploration, refining, and distribution.
• It leverages best practices, cumulated by working with leading businesses, think tanks, and government.
• It can be used for process design, operational analysis, due diligence, organizational alignment, and performance management. It serves as an architectural lens for IT to enable business transformation.

Upstream, midstream, and downstream companies require a unified and validated view of their capabilities, which aligns initiatives, investments, and strategies to provide value to their customers.

Eli Yufest 91ÖÆƬ³§ Analyst, Industry Practice 91ÖÆƬ³§

Executive Summary

Info-Tech Insight

Using an industry-specific reference architecture is central to, and has many benefits for, organizational priorities. It is critical for understanding, modeling, and communicating the operating environment and direction of an organization and, more significantly, for enabling measurable top-line organizational outcomes and unlocking direct value.

Reference Architecture Framework

Overarching Insight

Using an industry-specific reference architecture is central and has many benefits to organizational priorities. It's critical to understanding, modeling, and communicating the operating environment and the direction of the enterprise, and more significantly, to enabling measurable top-line business outcomes and the unlocking of direct value.

Determine your organizational priority.

Many organizational priorities are dependent on an understanding of how the organization creates value and the organization's capabilities and processes.

Examine organizational opportunities through the lens of business, information/data, applications & technology.

Your understanding of your organization's business capabilities, processes (rules & logic), information/data, and architecture will identify organizational opportunities to create value through reduced costs or increased revenues and services.

Follow Info-Tech's methodology to enable organizational outcomes and unlock direct value.

Your approach indicates the scope of your modernization initiatives.

91ÖÆƬ³§ your organization's capability map by defining the organization's value stream and validating the industry reference architecture.

Use business capabilities to define strategic focus by defining the organization's key capabilities and developing a prioritized strategy map.

Assess key capabilities for planning priorities through a review of business processes, information, applications, and technology support of key capabilities.

Sustain capability-based strategy planning through ongoing identification and roadmapping of capability gaps.

Industry Overview: Oil & Gas

The oil & gas industry consists of organizations that can be classified into three main categories: upstream, midstream, and downstream activities. There are dozens of companies that operate within each sector. Each of which have their purpose in bringing products consumers and businesses need.

These organizations can address a wide range of needs, such as fuel to heat homes, gas to power cars and trucks, and products that are used in food and clothing. Despite their critical roles in society, oil & gas companies face increasingly tougher regulations and oversight; for example, there is a movement to decarbonize in the not-too-distant-future.

As a result, technology-related challenges are a low priority.

Challenge Overview: Oil & Gas

Many oil & gas companies find themselves in a mode of surviving rather than thriving, with increased demand but increasingly tougher and more onerous regulations. As such, many companies need to find ways to be more efficient within their operations and improve environmentally.

IT can play a pivotal role in addressing this challenge by implementing a business reference architecture.

The business reference architecture acts as a strategic tool that can foster organizational alignment, identify gaps, discover solutions, enforce collaboration, mitigate risks, and prioritize investments. It must be leveraged to prioritize technology while remaining attuned to an organization’s unique challenges, goals, and objectives.

67/71 — Countries the OECD assessed has some form of a fuel tax ()

~16% — After April 1, 2025, the percentage of the price of gasoline in Ontario that is a form of fuel tax. This does not include the HST. ( & )

18.4₡ — Per gallon on gasoline and 24.4 cents per gallon on diesel fuel is applied in the USA. ()

$170 — Price per ton, by 2030, in Canada, on carbon. In 2022 it was $50/ton. ()

Value Realization

Value defines the success criteria of an organization as manifested through organizational goals and outcomes. It can be interpreted from four perspectives:

• Income/tax generation: The revenue generated from a capability with a product or service that is enabled by modern technologies.
• Cost reduction: The cost reduction when performing organizational capabilities with a product or service that is enabled by modern technologies.
• Service enablement: The productivity and efficiency gains of internal operations from products and capabilities enhanced with modern technologies.
• Customer and market reach: The improved reach and insights of the organizational in existing or new markets.

Value Matrix

Value, goals, and outcomes cannot be achieved without business capabilities

Break down institutional goals into strategic, achievable initiatives focused on specific value streams and institutional capabilities.

Business capability map defined…

Upstream

In business architecture, the primary view of an organization is known as its business capability map.

A business capability defines what a business does to enable value creation, rather than how. Business capabilities:

• Represent stable business functions.
• Are unique and independent of each other.
• Typically have a defined business outcome.

A business capability map provides details that help a business architecture practitioner direct attention to a specific area of the business for further assessment.

Business capability map defined…

Midstream

In business architecture, the primary view of an organization is known as its business capability map.

A business capability defines what a business does to enable value creation, rather than how. Business capabilities:

• Represent stable business functions.
• Are unique and independent of each other.
• Typically have a defined business outcome.

A business capability map provides details that help a business architecture practitioner direct attention to a specific area of the business for further assessment.