Technology and the digital economy are developing at breakneck speed, and disrupting the world of business. Digitalization in the Oil and Gas sector could be worth between $1.6 to $2.5 trillion for the industry, its customers and wider society over the next decade, but what is the reality of risk in the current business world and how can technology and data enable safer, risk reduced and efficient environments for our businesses? At the end of February, LR hosted one of its exclusive client events in Oslo, which saw us welcome guests to fuel the discussion on managing risks through technology.
Artificial Intelligence (AI)
We started the day with a guest presentation discussing Artificial Intelligence, and what this means for our businesses today. There is a lot of Hollywood hype around artificial intelligence, and the rise of the robots, but what’s the reality of this for businesses today?
Artificial intelligence is already changing businesses in unexpected ways. As demonstrated by Woodside Energy, who deployed artificial intelligence to reduce their workforce and improve efficiencies. What they didn’t predict was through the knowledge that this new technology has given them, their existing staff would become more engaged and more efficient, which lead to more work and increasing their workforce. The case of a 19 year old's "robot lawyer" which overturned 160,000 parking tickets with the help of artificial intelligence, is also another example of how AI is driving efficiencies. With the rise of technology and the speed of change in the AI market, competition can come from anywhere, new industries and new ways of doing things are appearing relatively quickly. If you’re not adapting to it, your competition will be, and this competition may not come from where you expect. To stay ahead, you must accept and adapt to this new reality.
AI applied together with Human Intelligence
With all the talk of AI, software systems and better coding, what does this mean for risk management? We’re all using artificial intelligence in our everyday lives through our smart phones, Siri, amazon. Why not use these intelligent machines to create safer, risk reduced environments?
Risk Management, in the new digital future, will focus not only AI or the human element but for optimal risk management it must focus on both the human intelligence and artificial intelligence combined. This has been shown in the manufacturing of components to hold cables above a road in The Hague, by using the best of both the human and computer, the component can now support the same weight but weighs 75% less and is 50% smaller than either the human or computer component alone.
When we adapt this combined approach into risk management we can enhance quality, provide deeper insights and reduce costs! Through AI we can have automated set up and assessment of risk scenarios. Mapping out likely incidents which can provide direct assessment of an escape route and impaired escape routes, as well as monitoring of real time risk. AI and digitalisation can provide real time insights as the risk environment changes based on weather conditions, manning, work orders, maintenance programs and inspection programs. Through these optimised solutions we can reduce the time needed to build risk models, reduce man-hours to build the model, automate document compliance, improve knowledge transfer and optimise engineering time by spending more time on the design improvements rather than modelling.
The reality of all these new technologies is that, in conjunction with more sophisticated threat actors and vectors, it is becoming increasingly more complicated to protect business critical assets. To date many organisations have relied almost purely on technology for protection. The focus has been on creating an impregnable fortress and protecting all assets within that fortress to the same level, from the canteen menu to the client database. This is an expensive and inefficacious approach.
To manage their security properly, businesses need a holistic approach encompassing not just technology, but people and processes, which in turn help to maximise the efficacy of their technical defences and reduce risk to the business.
This approach must be risk-based and driven through security analytics and threat intelligence so as to understand what to protect and how. This approach builds a scalable security posture providing better resilience for businesses in the face of an attack.
As we’re now in full swing of industry 4.0 and the digitalising our businesses as technology is delivering more and more for our businesses, drones for inspections, AI, augmented reality, asset digital twins and centralised data. At LR we’re responding to this rapidly changing environment, and through the LR Foundation, are accelerating safety and innovation.
Lloyd's Register Safety Accelerator is a new initiative aiming to remove barriers preventing industry uptake of cutting-edge safety and risk solutions. The Lloyd's Register Safety Accelerator will work with LR clients and key industry players to identify areas of operation with the most significant challenges to safety and risk. We’re offering industry partners to be early adopters of innovation without the associated financial risk, and also offering technology companies both funding and a route to market, the Lloyd's Register Safety Accelerator will address issues acting as a barrier to improved industrial operation.
Immersive training environment
We concluded the day with a demonstration of our virtual reality training simulator. We’re using the virtual environments today to improve the risk environment of offshore work environments. This helps you experience real-life challenges which the oil and gas industry is exposed to, and in a non-threatening environment, thereby enhancing your own knowledge and understanding of the key issues the industry faces in the offshore environment. Our VR simulation is already helping to train and develop people to ensure risks are reduced on sites, simulating real-life situations with a high degree of interactivity for the user. Our VR tool provides interactive simulations that close the gap between the abstract experience of a lecture and the experience of navigating and handling actual objects on-site. The value to a business using VR technology is immense and helps to reduce the costs of non-productive time, measured in hundreds of millions of pounds annually across the industry, due to operating down-time and inefficiencies.
It’s clear that there is significant benefit and value to be gained from managing risk though technology. The reality is that the business environment, oil and gas and energy sectors are changing and risk in the current world can be enhanced using new technology and data to enable safer, risk reduced and efficient environments for our businesses. Not just in the future, but now.
For more information or to talk to one of our experts about risk management in your business, please get in touch.
Who we work with
We help businesses across dozens of sectors push forward and achieve like never before. How can we help you?
Risk assessing the world’s largest SPAR.
We delivered a risk analysis of all major accident hazards, including analysis barriers against risks occurring, and analysing barriers in place to protect.
What we think
LR's experts regularly share their research and insights.