As we enter an era of hyper connectivity, trillion-dollar corporations and artificial intelligence, industries and companies must adapt to accommodate this new environment badged globalization 4.0 by the World Economic Forum (WEF). As these themes are discussed in Geneva this week, we outline a simple model to take advantage of it.
Globalization 4.0 and the WEF
For the WEF, 2019 discussions have been striped with the theme of Globalization 4.0, a term derived from comments by the WEF founder, Klaus Schwab, talking about the coming of the fourth industrial revolution. In their annual gathering at Davos in January it was the central theme, one which will be considered again in a more industrial strategic context in Geneva this week.
The four challenges of Globalization 4.0
For governments and corporations alike there are four main challenges to be overcome:
- Responsibility and Accountability for environmental awareness and support.
- Navigation and mitigation of the outcomes of geopolitical tensions.
- Planning and incorporation of the evidential shifts in long standing economic theories.
- Acceptance and integration of technologies into everyday corporate processes.
The Oil & Gas effect
The nature of the oil and gas industry places it at the forefront of meeting these challenges, and in some cases stakes and hurdles are even higher for these companies. According to this CFO in oil and gas study carried out by Accenture, CFO’s are being asked to balance traditional book keeping with the more strategic and operational issues, including:
- Volatility of commodity pricing and currency management
- Increasing financial and non-financial reporting
- Complex tax and legal requirements in National, multi-national and global environments
- Stakeholder expectations regarding CSR and ESG
- Traditional extraction based and modern renewable asset based business models
- Skill set shifts from the adoption of new technologies
- Faster, more insightful decision making
The 6 S’s enabling CFO success navigating Globalization 4.0
In order to meet and excel in these challenges, the oil and gas CFO requires modern solutions to support and enable actions and decision making in the following areas:
Provide for quick and compliant multiple entity setups and consolidations using a variety of entity models including JV’s, associations and asset ownerships.
Identify, track and manage or mitigate risks and opportunities incorporating scenario based outcomes into forecasts.
Visualize processes to highlight bottlenecks and provide causality analysis leading to more efficient processes.
Up skill your talent with role and person competency tracking matrices and gap analysis to add value to your most important asset base.
Assess and plan asset portfolios for effective long term maintenance, renewals and profitability decisions.
Provide pertinent data and information to decision makers in the format they need it, where they need it, when they need it, to allow accurate and timely decision making.