| | OCTOBER- NOVEMBER 20177priced based on the value that they deliver. The remuneration could become partially outcome-based, evolving from a capital expenditure to a model that bundles equipment with service and software as an operational expense offering. Some service contracts already include equipment, services, software, and the relevant analytics and provide an incentive to improve efficiency or performance so that the service company is rewarded to a certain degree according to the results achieved. For an improvement of X, the provider is paid $1 and for an enhancement of X+ it gets $1.5 on top of a fixed retribution. We could observe more adoption of this type of commercial agreements. Operators should become more open to this type of arrangement to manage their risk exposure but these agreements would also require them to share the necessary data to establish the baseline measurements that makes the model work. Furthermore, when adopting an outcome-based pricing, operators will also need to cede some control to service companies as well as the data, the service company has access to for it to assume its new role properly. Discussion around the operational influence the service company has in terms of calling for scheduled downtime and other decisions will need to be agreed upon.Days of being seen solely as an equipment provider are counted. Software is a differentiator to be perceived as a suitable partner to contribute to the outcomes operators are set to deliver. We are morphing from assets under management to data under management. Managed services will deliver the greatest ROI and risk transfer to the service providers.One challenge is getting engineers to trust the information and the systems build around the data feeds. Transparency as to how the data is being processed as well as education to these new methods can go a long way to facilitate this reliance. On a broader level the challenge is reorganizing companies around a new way of doing business blurring artificial silos such as Operation Technology and Information Technology. We see the advent and generalization of near real time data collected, aggregated, validated, and transferred to be funneled into workflow processes which can aggregate these streams with unstructured data sources to then trigger back office operations as much as correcting settings on filed devices or altering the priorities of personnel. ECSoftware, data, and analytics are central to a company's ability to differentiate itself within the Oil & Gas industry
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