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Oil and gas needs to embrace digital transformation

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The oil and gas sector has fallen behind other industries when it comes to digital transformation. Massive opportunity exists in technologies like cloud computing, the IoT and agile processes, but it remains to be seen whether the sector can adopt these tools in order to rapidly improve value throughout organizations.

Geoffrey Cann has worked as a consultant to oil and gas companies for 30 years. In his new book, Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas, Cann assesses how digital transformation is reshaping oil and gas, and how the industry can adopt technologies and processes to rapidly improve performance.

DX Journal interviewed Cann to find out where the oil and gas industry is currently in terms of digital transformation maturity, and what the industry needs to do to further embrace DX.

DX Journal: Has the oil and gas industry embraced digital transformation?

Cann: Oil and gas is among the least digitally switched on industries among the large industries. The role of autonomous tech is not high. Artificial intelligence isn’t as big as it is in other sectors.

The upstream industry is extremely data-intense. It generates untold quantities of data and they’ve been doing this for decades, so the industry has heaps and heaps of very large data sets. If you did a survey of companies that are buyers of supercomputers or have their own enormous data centres, oil companies would always be at the top of the list, because of this need to process subsurface data.

What’s happened is that the application of digital technologies is allowing the industry to go even deeper in resolution.

There’s a company in Calgary called Enersoft that’s taking a high-resolution photograph of drill cuttings and feeding the photographs into an artificial intelligence engine that can look at the photographs and can build up a completely new digital data set about an underground reservoir. They’re now able to model the underground data at the grain of sand level.

DX Journal: Can DX tech help oil and gas adapt to the competition from renewables?

Cann: As of yet there is no substitute for plastic and chemicals, which come from oil and gas. So there’s only a part of the industry that will have to change and cope with new alternative energy products.

The parts that do have to change are petroleum retailing and fuel distribution. The industry knows that there are serious clouds on the horizon when it comes to dealing with the rise of new alternative fuels. And it may come sooner than they think. Fuel delivery apps, shared vehicle services and autonomous vehicles are all serious threats.

DX Journal: Are there any tools these disruptive companies are using that oil and gas needs to embrace to better compete?

Cann: I’d say there are two tools. One is cloud computing. Oil and gas has not historically embraced cloud computing and there are still many people in the industry that cannot believe oil and gas should or will ever put its data into a third party cloud environment. They believe the data is proprietary and has intrinsic value. The idea that a third party could take your data, interpret it differently and then turn around and buy out your company is something so threatening that they won’t take the risk. In the face of banks putting all that customer data on the cloud, the CIA uses cloud computing — they still cling to this view.

Cloud will allow the industry to open up new business models that are right now very hard for them to get to. When you’re not on cloud, you’re siloed, you can’t swap data, can’t collaborate. Cloud changes that model up and it opens up new business models that they can’t otherwise get to. Cloud seems to be one of the key technologies to allow all the other creative inventions out there to really work. You go down the list: Google, Amazon, Netflix, Uber, Pinterest. These are all social technologies, but there’s no reason why the industrial sectors of the economy can’t take advantage of the same underlying technology.

The second thing they could do is not a technology, but it’s agile. The oil and gas industry runs on a traditional waterfall change model. And it is no longer in synch with the pace of change driven by digital innovation. The biggest benefit of agile is the ability of the oil and gas industry to change faster. In some industries, the transition from ideation to 50 percent market penetration is six years. And then you look at oil and gas, and from ideation to 50 percent market penetration is 30 years. It’s incredibly slow.

DX Journal: Thinking about the teams building DX, who should be leading this DX effort?

Cann: The successful introduction of technology into oil and gas requires leadership. The industry is very cautious and very risk-averse, and they adopt change very slowly. The industry has been extremely profitable over the years. When times are good, as they were from 2009 to 2014, a certain kind complacency sets in. A number of marginal improvements that Google would just leap on, oil and gas will say, no it’s just not worth the aggravation of having to adopt it, and we make so much money, it won’t change our economics by making something a little better. So the industry doesn’t embrace change very quickly.

Successful change does need very strong leadership from the company to demonstrate unyielding and relentless support to drive that change, in the face of these huge vectors that cement things in place and help them not change.

Leadership’s job is to lead, and they should be out in the field, communicating their vision, explaining to the field why change is important; explaining to them that the performance of the company is at stake if they don’t improve; holding people accountable if they don’t change; rewarding people that do change; answering their questions; supporting their supervisors. That’s what leaders are supposed to do.

DX Journal: Has anyone in the industry embraced that shift and developed digital transformation solutions?

Cann: NAL Resources Management Ltd. is an oil company owned by Manulife. In 2014, when the price of oil went down, NAL embarked on the usual playbook to fix the economics of the business. They went to the suppliers and asked for price concessions. They took a look at spending and cut back on anything that wasn’t urgent. They trimmed their dividend. They would have looked at their growth plan and slowed them all down. And they trimmed headcount. And they still weren’t going to be successful in the newly priced market.

The chief financial officer said, why don’t we try some of this new digital technology. They brought in three technologies and got them to work together. They brought in an artificial intelligence engine, to read contracts, a robot to build the calculations of the contract, and blockchain to take the calculations and autopay the recipients. NAL found a 90-95 percent productivity improvement over the status quo, enabling them to grow without adding headcount.

They’ve since had a steady stream of other oil companies contacting them to find out how on Earth they did this. The bot technology is being copied in a variety of places. Suncor has a whole bot team that does nothing but work on bots.

DX Journal: What is a career insight you’ve gained when it comes to DX that surprised you and that surprises people the most?

Cann: The biggest one is it’s not about technology, it’s about people. Most oil and gas companies think it’s the other way around, they think it’s about the technology, and they fear the technology. It’s not. It’s about engineering people and process change.

DX Journal: What’s the biggest mistake companies are making today when it comes to digital transformation?

There’s so many. I think the biggest mistake is underestimating the amount of attention and energy it’s going to take to work with people and move organizations to support the change.

And companies don’t often take a big enough view of what the technology could do for them. I’ll use NAL as an example. They brought in three technologies: artificial intelligence, bot technology and blockchain. What many companies would do is they would just trial artificial intelligence and then not get much of a payoff. They’d say, it’s a little faster than our people. They might put a bot in, and the bot would be faster than their people, but they’d say, well, it’s faster than our people, but we don’t want the headache of having to fire anybody. They might put blockchain in and then conclude, it’s not making any difference on how efficient we are. And they’d be correct in each instance, because they took such a narrow view of the problem they’re trying to solve.

I think the prize in the future is going to go to those organizations that embrace a bigger vision, and look much more holistically across about how to rethink the whole company, not just to dabble with a specific technology.

Cann’s new book Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas is available now in both paperback and Ebook format. Bulk purchases are available through direct correspondence with the author and an audiobook version is forthcoming.

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How businesses can protect themselves from the rising threat of deepfakes

Dive into the world of deepfakes and explore the risks, strategies and insights to fortify your organization’s defences

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In Billy Joel’s latest video for the just-released song Turn the Lights Back On, it features him in several deepfakes, singing the tune as himself, but decades younger. The technology has advanced to the extent that it’s difficult to distinguish between that of a fake 30-year-old Joel, and the real 75-year-old today.

This is where tech is being used for good. But when it’s used with bad intent, it can spell disaster. In mid-February, a report showed a clerk at a Hong Kong multinational who was hoodwinked by a deepfake impersonating senior executives in a video, resulting in a $35 million theft.

Deepfake technology, a form of artificial intelligence (AI), is capable of creating highly realistic fake videos, images, or audio recordings. In just a few years, these digital manipulations have become so sophisticated that they can convincingly depict people saying or doing things that they never actually did. In little time, the tech will become readily available to the layperson, who’ll require few programming skills.

Legislators are taking note

In the US, the Federal Trade Commission proposed a ban on those who impersonate others using deepfakes — the greatest concern being how it can be used to fool consumers. The Feb. 16 ban further noted that an increasing number of complaints have been filed from “impersonation-based fraud.”

A Financial Post article outlined that Ontario’s information and privacy commissioner, Patricia Kosseim, says she feels “a sense of urgency” to act on artificial intelligence as the technology improves. “Malicious actors have found ways to synthetically mimic executive’s voices down to their exact tone and accent, duping employees into thinking their boss is asking them to transfer funds to a perpetrator’s account,” the report said. Ontario’s Trustworthy Artificial Intelligence Framework, for which she consults, aims to set guides on the public sector use of AI.

In a recent Microsoft blog, the company stated their plan is to work with the tech industry and government to foster a safer digital ecosystem and tackle the challenges posed by AI abuse collectively. The company also said it’s already taking preventative steps, such as “ongoing red team analysis, preemptive classifiers, the blocking of abusive prompts, automated testing, and rapid bans of users who abuse the system” as well as using watermarks and metadata.

That prevention will also include enhancing public understanding of the risks associated with deepfakes and how to distinguish between legitimate and manipulated content.

Cybercriminals are also using deepfakes to apply for remote jobs. The scam starts by posting fake job listings to collect information from the candidates, then uses deepfake video technology during remote interviews to steal data or unleash ransomware. More than 16,000 people reported that they were victims of this scam to the FBI in 2020. In the US, this kind of fraud has resulted in a loss of more than $3 billion USD. Where possible, they recommend job interviews should be in person to avoid these threats.

Catching fakes in the workplace

There are detector programs, but they’re not flawless. 

When engineers at the Canadian company Dessa first tested a deepfake detector that was built using Google’s synthetic videos, they found it failed more than 40% of the time. The Seattle Times noted that the problem in question was eventually fixed, and it comes down to the fact that “a detector is only as good as the data used to train it.” But, because the tech is advancing so rapidly, detection will require constant reinvention.

There are other detection services, often tracing blood flow in the face, or errant eye movements, but these might lose steam once the hackers figure out what sends up red flags.

“As deepfake technology becomes more widespread and accessible, it will become increasingly difficult to trust the authenticity of digital content,” noted Javed Khan, owner of Ontario-based marketing firm EMpression. He said a focus of the business is to monitor upcoming trends in tech and share the ideas in a simple way to entrepreneurs and small business owners.

To preempt deepfake problems in the workplace, he recommended regular training sessions for employees. A good starting point, he said, would be to test them on MIT’s eight ways the layperson can try to discern a deepfake on their own, ranging from unusual blinking, smooth skin, and lighting.

Businesses should proactively communicate through newsletters, social media posts, industry forums, and workshops, about the risks associated with deepfake manipulation, he told DX Journal, to “stay updated on emerging threats and best practices.”

To keep ahead of any possible attacks, he said companies should establish protocols for “responding swiftly” to potential deepfake attacks, including issuing public statements or corrective actions.

How can a deepfake attack impact business?

The potential to malign a company’s reputation with a single deepfake should not be underestimated.

“Deepfakes could be racist. It could be sexist. It doesn’t matter — by the time it gets known that it’s fake, the damage could be already done. And this is the problem,” said Alan Smithson, co-founder of Mississauga-based MetaVRse and investor at Your Director AI.

“Building a brand is hard, and then it can be destroyed in a second,” Smithson told DX Journal. “The technology is getting so good, so cheap, so fast, that the power of this is in everybody’s hands now.”

One of the possible solutions is for businesses to have a code word when communicating over video as a way to determine who’s real and who’s not. But Smithson cautioned that the word shouldn’t be shared around cell phones or computers because “we don’t know what devices are listening to us.”

He said governments and companies will need to employ blockchain or watermarks to identify fraudulent messages. “Otherwise, this is gonna get crazy,” he added, noting that Sora — the new AI text to video program — is “mind-blowingly good” and in another two years could be “indistinguishable from anything we create as humans.”

“Maybe the governments will step in and punish them harshly enough that it will just be so unreasonable to use these technologies for bad,” he continued. And yet, he lamented that many foreign actors in enemy countries would not be deterred by one country’s law. It’s one downside he said will always be a sticking point.

It would appear that for now, two defence mechanisms are the saving grace to the growing threat posed by deepfakes: legal and regulatory responses, and continuous vigilance and adaptation to mitigate risks. The question remains, however, whether safety will keep up with the speed of innovation.

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The new reality of how VR can change how we work

It’s not just for gaming — from saving lives to training remote staff, here’s how virtual reality is changing the game for businesses

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Until a few weeks ago, you might have thought that “virtual reality” and its cousin “augmented reality” were fads that had come and gone. At the peak of the last frenzy around the technology, the company formerly known as Facebook changed its name to Meta in 2021, as a sign of how determined founder Mark Zuckerberg was to create a VR “metaverse,” complete with cartoon avatars (who for some reason had no legs — they’ve got legs now, but there are some restrictions on how they work).

Meta has since spent more than $36 billion on metaverse research and development, but so far has relatively little to show for it. Meta has sold about 20 million of its Quest VR headsets so far, but according to some reports, not many people are spending a lot of time in the metaverse. And a lack of legs for your avatar probably isn’t the main reason. No doubt many were wondering: What are we supposed to be doing in here?

The evolution of virtual reality

Things changed fairly dramatically in June, however, when Apple demoed its Vision Pro headset, and then in early February when they were finally available for sale. At $3,499 US, the device is definitely not for the average consumer, but using it has changed the way some think about virtual reality, or the “metaverse,” or whatever we choose to call it.

Some of the enhancements that Apple has come up with for the VR headset experience have convinced Vision Pro true believers that we are either at or close to the same kind of inflection point that we saw after the release of the original iPhone in 2007.Others, however, aren’t so sure we are there yet.

The metaverse sounds like a place where you bump into giant dinosaur avatars or play virtual tennis, but ‘spatial computing’ puts the focus on using a VR headset to enhance what users already do on their computers. Some users generate multiple virtual screens that hang in the air in front of them, allowing them to walk around their homes or offices and always have their virtual desktop in front of them.

VR fans are excited about the prospect of watching a movie on what looks like a 100-foot-wide TV screen hanging in the air in front of them, or playing a video game. But what about work-related uses of a headset like the Vision Pro? 

Innovating health care with VR technology

One of the most obvious applications is in medicine, where doctors are already using remote viewing software to perform checkups or even operations. At Cambridge University, game designers and cancer researchers have teamed up to make it easier to see cancer cells and distinguish between different kinds.

Heads-up displays and other similar kinds of technology are already in use in aerospace engineering and other fields, because they allow workers to see a wiring diagram or schematic while working to repair it. VR headsets could make such tasks even easier, by making those diagrams or schematics even larger, and superimposing them on the real thing. The same kind of process could work for digital scans of a patient during an operation.

Using virtual reality, patients and doctors could also do remote consultations more easily, allowing patients to describe visually what is happening with them, and giving health professionals the ability to offer tips and direct recommendations in a visual way. 

This would not only help with providing care to people who live in remote areas, but could also help when there is a language barrier between doctor and patient. 

Impacting industry worldwide

One technology consulting firm writes that using a Vision Pro or other VR headset to streamline assembly and quality control in maintenance tasks. Overlaying diagrams, 3D models, and other digital information onto an object in real time could enable “more efficient and error-free assembly processes,” by providing visual cues, step-by-step guidance, and real-time feedback. 

In addition to these kinds of uses, virtual reality could also be used for remote onboarding for new staff in a variety of different roles, by allowing them to move around and practice training tasks in a virtual environment.

Some technology watchers believe that the retail industry could be transformed by virtual reality as well. Millions of consumers have become used to buying online, but some categories such as clothing and furniture have lagged, in part because it is difficult to tell what a piece of clothing might look like once you are wearing it, or what that chair will look like in your home. But VR promises the kind of immersive experience where that becomes possible.

While many consumers may see this technology only as an avenue for gaming and entertainment, it’s already being leveraged by businesses in manufacturing, health care and workforce development. Even in 2020, 91 per cent of businesses surveyed by TechRepublic either used or planned to adopt VR or AR technology — and as these technological advances continue, adoption is likely to keep ramping up.

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5 tips for brainstorming with ChatGPT

How to avoid inaccuracy and leverage the full creative reign of ChatGPT

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ChatGPT recruited a staggering 100 million users by January 2023. As software with one of the fastest-growing user bases, we imagine even higher numbers this year. 

It’s not hard to see why. 

Amazon sellers use it to optimize product listings that bring in more sales. Programmers use it to write code. Writers use it to get their creative juices flowing. 

And occasionally, a lawyer might use it to prepare a court filing, only to fail miserably when the judge notices numerous fake cases and citations. 

Which brings us to the fact that ChatGPT was never infallible. It’s best used as a brainstorming tool with a skeptical lens on every output. 

Here are five tips for how businesses can avoid inaccuracy and leverage the full creative reign of generative AI when brainstorming.

  1. Use it as a base

Hootsuite’s marketing VP Billy Jones talked about using ChatGPT as a jumping-off point for his marketing strategy. He shares an example of how he used it to create audience personas for his advertising tactics. 

Would he ask ChatGPT to create audience personas for Hootsuite’s products? Nope, that would present too many gaps where the platform could plug in false assumptions. Instead, Jones asks for demographic data on social media managers in the US — a request easy enough for ChatGPT to gather data on. From there he pairs the output with his own research to create audience personas. 

  1. Ask open-ended questions

You don’t need ChatGPT to tell you yes or no — even if you learn something new, that doesn’t really get your creative juices flowing. Consider the difference: 

  • Does history repeat itself? 
  • What are some examples of history repeating itself in politics in the last decade?

Open-ended questions give you much more opportunity to get inspired and ask questions you may not have thought of. 

  1. Edit your questions as you go

ChatGPT has a wealth of data at its virtual fingertips to examine and interpret before spitting out an answer. Meaning you can narrow down the data for a more focused response with multiple prompts that further tweak its answers. 

For example, you might ask ChatGPT about book recommendations for your book club. Once you get an answer, you could narrow it down by adding another requirement, like specific years of release, topic categories, or mentions by reputable reviewers. Adding context to what you’re looking for will give more nuanced answers.

  1. Gain inspiration from past success

Have an idea you’re unsure about? Ask ChatGPT about successes with a particular strategy or within a particular industry. 

The platform can scour through endless news releases, reports, statistics, and content to find you relatable cases all over the world. Adding the word “adapt” into a prompt can help utilize strategies that have worked in the past and apply them to your question. 

As an example, the prompt, “Adapt sales techniques to effectively navigate virtual selling environments,” can generate new solutions by pulling from how old problems were solved. 

  1. Trust, but verify

You wouldn’t publish the drawing board of a brainstorm session. Similarly, don’t take anything ChatGPT says as truth until you verify it with your own research. 

The University of Waterloo notes that blending curiosity and critical thinking with ChatGPT can help to think through ideas and new angles. But, once the brainstorming is done, it’s time to turn to real research for confirmation.

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