Knowledge Management Strategies for Mitigating the Big Crew - Wipro

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Knowledge Management Strategies for mitigating the Big Crew Change in E&P [4] [5] [6] The average age of oil field engineers is 48 and 50% to 60% will be eligible for retirement within 10 years. The expected attrition rate is 6% per year.7 The disciplines hardest hit include petroleum engineers, process engineers, geologists, and geophysicists. Employee age also follows a bimodal distribution with a large number of older employees, a number of younger employees and not much in the middle. A good example is Halliburton, where 56% of employees have less than five years of experience, 17% have 5 to 10 years’ experience, and 27% have more than 10 years’ experience.8 Halliburton is considered a young company in the industry with bimodal distribution over-weighted at the young side of the curve. Aramco is a similar example. According to Allah Al-Saif, Senior VP of E&P, "nearly half of our workforce [Saudi Aramco] is less than 30 years of age. Furthermore, surveys suggest that in the next few years more than 60 per cent of our engineers will have less than 10 years of experience”. The industry will be most at risk when the experienced employees retire, shifting the small middle group into leadership with support from a large group of inexperienced employees. Workforce volatility is not new to the oil and gas industry; it has been an issue for the last 150 years. As the price of oil climbs, companies quickly hire. As oil prices fall, companies lay off. Since the 1980s the price of oil has gone from the $10s to the $140s and back to the $50s today. The workforce demographics reflect this. However, oil price volatility is only one component. The Big Crew Change has its roots in the 1980s and 1990s and occurred for three reasons: 1. Mergers and low oil prices caused hundreds of thousands of people to leave the industry 2. The image of E&P as low-tech and a dirty, sunset industry makes it less attractive for young people 3. Competition from other industries There is also a regional graduation deficit for E&P engineers. The US enrolment in key E&P industry skills like petroleum engineering fell 85% between 1982 and 2003. For example, in 1993 there were 11,000 petroleum engineering students in the United States at 34 universities. By 2005, that number had plummeted to 1700 people at 17 universities. 10While the situation in the United States is grim, in parts of the world such as India and China there is a surplus. In 2006, Schlumberger Business Consulting surveyed 115 universities and 30 companies to compare available labor and demand.11 The results of the survey showed major deficits in the United States, Canada, Russia, Saudi Arabia and Iran. Major surpluses were found in China, Indonesia, India, Venezuela and Mexico. The deficits and surpluses roughly balance themselves. One of the challenges going forward will be to either relocate these engineers closer to their work or to find new ways to leverage them in their native countries.[7] [8] 6 | www.wipro.com/industryresearch WIPRO TECHNOLOGIES
Knowledge Management Strategies for mitigating the Big Crew Change in E&P [9] [10] [11] Over the next 15 years, the industry plans to expand capacity by investing over $200 billion in E&P. In order to support this growth rate, a solution to the talent issue must be found. Since it is too late to do anything about the mid-career gap in the workforce, solutions will need to focus on five areas: 1. Keeping institutional knowledge in the system longer 2. Improving collaboration between employees 3. Developing IT systems that can mimic experienced employees 4. Providing more effective programs to reduce the time needed for new employees to become productive 5. Creating processes for leveraging surplus labor in deficit markets New technologies that enable new business processes are showing great promise and may be the most effective way to developing a strategy for mitigating the impact of the Big Crew Change. Wipro’s Business Solution Wipro’s solution for the Big Crew Change is to form knowledge communities that are linked together through collaborative technologies provided by Microsoft’s MOSS 2007 Enterprise and Unified Communications platforms. Custom applications delivered through Webparts in portals would be used to provide specialized functionality. Incentive programs would be used to increase user acceptance and improve change management. Knowledge communities address the requirement of keeping institutional knowledge in the system during the period of the Big Crew Change. The new electronic systems and business processes associated with the communities will address the second requirement of improved collaboration. These communities will consist of 5 groups: 1. On-duty employees supporting operations 2. Off-duty employees supporting operations 3. Center of Excellence (COE) employees 4. Partners and vendors 5. Alumni consultants The five groups would be brought together as a virtual team through a portal that is accessible both internally through the corporate intranet and externally through an extranet. Unified communications and mobile systems provide ubiquitous communications allowing each participant to support the community from any location and at any time. 7 | www.wipro.com/industryresearch WIPRO TECHNOLOGIES
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Knowledge Management Strategies for Mitigating the Big Crew - Wipro

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