The oil and gas industry is on the verge of a digital revolution, driven by artificial intelligence (AI) and emerging technologies. From predictive maintenance to real-time data analytics, these technologies hold the promise of optimizing operations, enhancing safety, and reducing costs. However, despite the buzz, the reality is that the success of AI and digital transformation is not solely dependent on technology. The true challenge lies in managing the human element, realistic goal-setting, and ensuring that the transformation delivers actual benefits.
Technology alone won’t solve the industry’s problems—it’s the people and the processes that must adapt to truly unlock the potential of AI. For my ongoing study I developed this article that delves into how focusing on people, actively managing expectations, and leveraging effective portfolio management and program management offices (PMOs) can ensure that digital transformation initiatives in oil and gas deliver tangible results.
The People & Culture-Centered Challenge of AI
The biggest barrier to AI adoption is often the employees & corporate culture, not the technology. While AI systems can process massive amounts of data and automate complex tasks, these advancements often disrupt existing workflows. Many employees are reluctant to embrace new technologies because they feel that their jobs are at risk, or they may simply not have the skills or confidence to use AI tools effectively. This resistance can lead to slow adoption and missed opportunities to leverage AI for operational improvement.
What’s needed is an organizational culture that supports continuous learning, flexibility, and open communication. Workers at all levels must feel empowered, rather than threatened, by the introduction of AI. This requires structured training programs, leadership that champions the change, and a clear vision that demonstrates how AI will benefit the workforce and not just replace it.
During the implementation of a AI strategy, building a culture of trust is crucial. Employees need to know that AI is there to assist them in decision-making, not replace their judgment or expertise. A successful AI implementation must also include a framework for continuous feedback and improvement, where employees can voice concerns and suggest refinements to the system. People first. AI Later.
Managing Expectations: The Importance of Realism
Another challenge that organizations face is the tendency to overpromise AI’s capabilities. AI is not a cure-all solution. While it can provide predictive insights and automate processes, expecting it to solve deep-rooted operational inefficiencies overnight is a mistake. Unrealistic expectations can set the stage for disappointment, as stakeholders may feel that the results fall short of the initial vision.
AI implementation should be framed around gradual, measurable improvements. Companies should define success in terms of achievable goals—such as reducing maintenance downtime or increasing predictive accuracy—rather than expecting a full-scale transformation at once. This ensures that the leadership team and employees remain motivated and aligned with what AI can truly deliver over time. The key is to remain flexible and agile, willing to refine the goals and processes as the AI system learns and adapts to the organization’s needs.
The Role of the Portfolio Management Office (PMO) in Driving Transformation
A critical element in the success of AI and digital initiatives is the effective management of portfolios and programs. The Portfolio Management Office (PMO) is the strategic hub where transformation efforts are tracked, monitored, and adjusted to ensure they align with broader organizational objectives. In oil and gas, where investments in technology and infrastructure can be substantial, the PMO plays a key role in balancing priorities across multiple programs and projects.
The PMO ensures that the AI initiatives are aligned with business strategy by providing oversight and governance. This includes setting clear priorities, defining KPIs, and ensuring that projects are delivering value in line with expectations. Importantly, the PMO can act as a gatekeeper, stopping projects that do not show tangible results or those that are not delivering benefits as expected. This prevents wasted resources and ensures that the focus remains on high-impact initiatives.
By actively managing the portfolio, the PMO helps oil and gas companies avoid the common pitfall of overstretching resources across too many projects. Instead, it ensures that the most promising initiatives receive the necessary support and attention, driving them to completion while weeding out those that fail to meet their goals. This is particularly important in the AI space, where innovation often requires rapid iteration and the flexibility to pivot when things don’t go as planned.
Active Program Management: Ensuring Results and Accountability
In addition to the PMO’s high-level oversight, active program management is crucial for delivering the promised benefits of digital transformation. Effective program managers are the ones who keep projects on track, ensuring that they are not only delivered on time but also produce the expected outcomes. They take a hands-on approach, continually checking whether projects are delivering against the KPIs set out at the beginning of the initiative.
Active program management ensures that projects are adaptable and can evolve in response to feedback. This dynamic approach allows for real-time adjustments, particularly when early results show that a project may not be delivering the anticipated benefits. By continuously tracking outcomes, program managers can decide whether to recalibrate a project or terminate it before further resources are wasted.
Program management also plays a vital role in bridging the gap between technical teams and the workforce. The program manager must ensure that technical teams are building AI solutions that align with real-world business needs while helping employees feel comfortable with these new technologies. Successful programs require not just technical expertise, but also empathy, communication skills, and an ability to manage resistance to change.
Why People Matter More Than Ever
While AI is a powerful tool, the most effective transformations are those that prioritize people over technology. Leaders in the oil and gas sector must recognize that the success of AI projects depends largely on how well the workforce adapts to and embraces these changes. Companies should focus on creating an environment where innovation is encouraged, and where employees feel supported in learning new skills and adapting to new tools.
Clear communication, regular training, and a strong emphasis on collaboration are essential. Employees need to understand how AI can make their jobs easier, not more difficult, and how it can help them achieve better results in less time. Ensuring that teams are part of the solution rather than sidelined by technology is key to long-term success.
A Holistic Approach to AI in Oil & Gas
The true challenge of AI and digital transformation in the oil and gas sector is not the technology itself, but the people who use it and the processes that support it. Overpromising AI’s capabilities and ignoring the workforce can lead to failed initiatives and missed opportunities. However, by focusing on effective portfolio and program management, setting realistic expectations, and prioritizing the human element, companies can navigate these challenges successfully.
An effective PMO ensures that transformation efforts are aligned with broader business goals, while active program management keeps initiatives on track and accountable for delivering real benefits. Above all, fostering a culture of adaptability and trust among employees will make the difference between a successful digital transformation and one that fails to deliver on its promises. In a world where change is constant, people remain the most critical factor in making AI a true success story in oil and gas.