The Edge Markets

Making the Most of New Opportunities in O&G

Making the Most of New Opportunities in O&G

Energy and chemical companies can follow four steps to unlock their commercial potential.

  • min read


Making the Most of New Opportunities in O&G

This article originally appeared in The Edge Markets.

CEOs of industrial companies hear it from their customers every day: Why can’t they deliver service as convenient as Amazon, as transparent as Uber, and as innovative and well designed as Apple? They may have brushed it off the first few times they heard it, but at some point most executives begin to understand: Customer expectations are rising.

Even in oil, gas and chemicals, where the business model has relied on a traditional sequence of drawing hydrocarbons out of the ground, then processing and selling them, the expectations of commercial and retail customers are evolving to match what they experience online.

Over the past 10 to 15 years, oil, gas and chemical companies have focused on achieving operational excellence: Improving the productivity, performance and safety of their assets and personnel. It has been time and money well spent, delivering millions of extra barrels of oil and gas recovered, higher utilisation of assets and improvements in worker safety.

With these gains secured, executives are focusing on a new prize: Commercial excellence—the design and delivery of practices that maximise profitable revenue. Commercial excellence programmes improve pricing, salesforce effectiveness, product mix, customer selection and distributor management.

Until recently, most executives in these industries have not prioritised improving commercial efforts, partly because the potential prize was uncertain. That is changing as executives realise the tremendous value available.

Commercial excellence aspires to bring the same scientific approach to the customer side of the business that operational excellence brought to operations. By encouraging executives to learn more about who their best customers are, what it costs to serve them, and how satisfied they are, they can improve customer loyalty and unlock new value.

Dale Hardcastle is a partner with Bain & Company in Singapore. Andrea Ioannilli is a partner with Bain & Company in Kuala Lumpur.


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