How the Energy Sector Succeeded with Scrum Outside of IT

Natalia Plewniok
August 10, 2018
How the Energy Sector Succeeded with Scrum Outside of IT

With Agile transformations enabling digital transformations across industries, there is no shortage of examples of Agile outside of IT.

At Meirik we take into account each company’s unique context to find the optimal solution. We’re pragmatic and method agnostic. We believe in finding the right approach for your specific circumstances.

Over multiple engagements, we have seen a trend in success with non-IT teams in the energy sector that have used Scrum. It makes sense when looking at the challenges and opportunities the energy sector is facing.

In this article, we’ll explore when teams should use Scrum, why it makes sense in the energy sector, and share an example of a field development team who found success with the Scrum framework.

This blog is for you if you already have an understanding of the Agile manifesto and the Scrum framework. Instead of a step-by-step guide, we’ll focus on the value the team delivered when using Scrum.

This is intended to be a high-level overview. For more detailed guidance, speak to one of our consultants to find out how we can support your business.

Let’s start by understanding why Scrum makes sense in the energy sector.

When should teams use Scrum?

We’re often asked: when does it make sense to use Scrum? The shortest answer is, obviously: it depends.

But there are some good indications that Scrum might suit your objectives. One of the guides we use is the Cynefin decision-making framework.

Cynefin outlines 5 five decision-making domains. These are obvious, complicated, complex, chaotic, and disorder.

Scrum makes the most sense to use in the Complex domain. This is where there are no clear ‘right’ answers. Instead, information emerges, and the best course of action is to probe, sense, and respond. It’s impossible to understand these environments by their individual parts, they are interconnected and change in unpredictable ways.

Why Scrum makes sense in the energy sector

Historically, the energy industry has been slow-moving, navigating huge technical challenges, political relationships, and operational risks.

In today’s dynamic and competitive environment, the energy sector is facing new challenges.

Company’s need to reduce the environmental impact of their operations to meet sustainability goals. An ING report estimates 70% of the world’s energy could come from renewables by 2040, with an 80% reduction in carbon being emitted into the air.

There has been a massive shift in consumer preferences, investor sentiments, and regulations. And it’s becoming harder to attract top talent who have different expectations for the workplace.

Not to mention the recent disruption in oil and gas prices from the COVID-19 pandemic. Prices have dropped to a 30-year low, after a 12 year period of already unstable prices.

Digital and Agile transformations are underway to adapt to these increasing and fast changes. There is a common understanding that technology will offer potential gains to reduce CAPEX and OPEX. There are also goals to advance productivity, learning, and operational performance.

Scrum is one of the ways teams are shifting how they work to become more Agile. This is an example of a traditional oil and gas team, who is not in IT. They are using Scrum to navigate this complexity and achieve business results, agility, and resilience.

Success story from a Scrum team in the energy sector

Field Development Plans get financing with a cross-functional team

Field Development Plans (FDPs) are like the business plan for a field. They use increasing amounts of data and technology to figure out the activities and processes to optimise a field. These plans are adapted over the lifecycle of a project to maximise the benefits.

The first goal for an FDP is to prove the business case and get approved for financing. This process can be highly competitive.

Traditionally, teams work sequentially through the activities, grouped by their skill set, to create the FDP. Typically this looks something like geophysicists, geologists, and reservoir engineers defining the plan. They hand over to production engineers, infrastructure, and well designers to decide on the design. Construction, completion design, and surface facilities teams then work to decide the production facilities, followed by the transport and export options. This is interspersed with support from environmentalists, risk specialists, and economics experts. Not to mention the handover to the finance team for approval.

Based on the complexity of the work, the delays caused by handoffs, and the urgency to get financial approval, we worked with a team that wanted to apply the Scrum framework. Their product became the FDP. Instead of handing over to each skill set, they formed a cross-functional team.

Once the team was formed and a product owner was found, we helped them turn their work into a backlog. This step alone quickly showed a range of activities that were low value. This was work that could be stopped altogether and improved the team’s effectiveness.

Instead of a team working on multiple plans at once, they worked on the top priority field. As a multidisciplinary team, they could iterate and get feedback on the plan from stakeholders at each sprint review. This meant they had frequent feedback and weren’t waiting for the final approval from finance. By the time their plan went for approval, it was high quality and approved in record time.

There were numerous other benefits the team achieved through the Scrum framework. The team’s impediments were resolved quickly. They were even able to innovate on new technology that had a benefit for all future plans. This team proved what was possible and led to a function-wide adoption of the Scrum framework.

The future of Scrum teams in the energy sector

This is just one example of a Scrum team we worked with within the energy sector. We’ve seen teams have success with exploration, production, projects, procurement, health and safety, and finance.

It’s clear that energy company’s are undergoing full-scale digital and Agile transformations. They need to in order to survive the multiple challenges they are facing.

While Scrum is just one way for teams to be Agile, it’s been a useful approach to help reimagine how work can be done in an Agile way. More than that, it’s delivered results. Teams who’ve applied the Scrum framework have not only focused on delivering the most valuable work first, they’ve also been more engaged and empowered.

As energy company’s start to re-organise for agility, we are expecting to see a growing number of non-IT teams benefit from the Scrum framework.

If you’re interested in learning more about Scrum, join one of our training programs or speak to one of our Agile consultants.

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