Nicolas Gutierrez is in charge of major digitalization projects in the oil and gas, mining and metallurgical industries in Russia and Kazakhstan.
With 15 years' experience working in Russia and the CIS, Nicolas brings the best international practices to Russian business. His goal today is to help large oil and gas, mining and metallurgical companies find their way through new digital challenges and opportunities, and to increase business efficiency by unlocking the potential of digital technology.
Nicolas used to work for Severstal Resources as a solution architect, and was responsible for the creation and implementation of standardised business processes and SAP ERP.
Before coming to Russia, Nicolas gained international experience in the design of oil and gas processes, software selection, development and deployment of production reporting, maintenance and procurement.
Sputnik: How has the Fourth Industrial Revolution changed “Accenture” business strategy over the past decades?
Nicolas Gutierrez: Accenture has radically changed in the last 4-5 years in many different ways. First of all, about 4 years ago we changed our trading model. One of the things that happened was that we created something called innovation architecture, which is now a set of different areas where we work on to innovate and create new ideas. It goes from our research teams, the global research team is here as a moderator and a speaker, but it also includes our innovation labs, our technology labs, our demo labs, which are distributed all over the world. What’s important is – I think this is a big difference that I see many mistakes of companies – we didn’t just create our innovation labs or our innovation architecture, but we also created the changes in the operation to be able to do big-scale projects for our clients with new innovations.
And what we find all over the world – and I find it even more with Russian companies – is the tendency to create these labs without changing the rest of the IT and organization to be able to take advantage of what the life brings. Many companies do pilots and create labs, they have nice little teams of people with lots of skills; but then they don’t know how to put that into their production environment. Accenture understood from the beginning we had to create both things, so we changed our operation. Another way that Accenture changed completely was around partnerships and acquisitions of startups. In the past, Accenture would buy 1-2 companies every few years; usually they were big companies. We bought them and we basically integrated them into the firm. Now Accenture has many faces. For me, it was really interesting and fun, as somebody who’s worked with Accenture and even before that I worked with Arthur Anderson; so, for 25 years I’ve been working with this firm.
For me it was sort of a shock and motivation as well when I received the news 2 or 3 years ago that we were acquiring a company called Chaotic Moon; already by the name it doesn’t sound like us. And yet, this was a firm who did digital solutions for the movie industry; and I thought: “Okay, that’s different.” And then, a few years ago, they actually did a prototype for an oil and gas company; and we took that prototype, which was just a nice prototype. We took that prototype here in Russia with a great team, and used the protocol of unity, which is also a product for the film industry, for gamers, to build the solution for Gazprom Neft. They have deployed their production this year to monitor wells. So, that’s another way that Accenture has changed; we’re buying these companies, like Chaotic Moon, like Fjord. And now we bought a company called Design Affairs in the German region; their focus is building new products for users. They actually design some of the user interfaces. And we let them be. So, we don’t integrate them completely; they keep their brand and ideas. That’s another way that we have changed, we are a lot more focused on these things. And the other thing that I think have changed radically is that we moved into other areas; so Accenture Interactive is now the biggest digital agency in the world, so we do design and marketing, which wasn’t that space that consultants go into. And I think it was last year that we won an award in Cannes for something we did for the New-York Times, which was the recreation in live voice of Kennedy’s speech; the speech that JFK was going to give in Dallas the day he was assassinated.
So, we took the written speech and we created it for New York Times with a real voice, with his voice and so on. And that was design and marketing, that was Accenture Interactive. And then, for me, what’s important is that we used to be very much focused on the back office, how to help companies change around their financial processes, their HR and so on; a huge amount of our pieces now is industry axe, how do we change production, how do we use IOT, how do we use AI in the production environment to actually get more efficiency and more efficiency from production environment. So, we moved into areas that we weren’t in 2 or 3 years ago; and we’re changing fast and we’re always looking forward. The company is working now on the 2025 vision for Accenture, and is going to keep adapting itself to the digital transformation and changing markets; because we believe we’re in a volatile environment and our companies need to radically change and keep changing all the time. So, those are the 4 main areas, I think that Accenture has radically changed.
Sputnik: What digital challenges do large US’s and EU’s enterprises in the oil and gas, mining and metallurgical industries face today?
Nicolas Gutierrez: There’re 2 different types of challenges. There’re the digital challenges, and that’s how to use digital technologies to resolve some of the business challenges. If we start with the business challenges, there’re different things for different industries. Oil and gas industry is being pressured because of the supply chains changing all the time; so, the supplies keep moving. They are being pressured because they have massive ageing workforce around the world. Less so in Russia; in Russia there’re still less challenges, but around the world, in the US, I think the average age of an oil and gas employee is somewhere in the 50-s or 40-s and 50-s. This is creating a big challenge because this workforce is going to go away at some point and the new workforce wants to work in different ways or doesn’t even want to work in these industries.
That’s another challenge. The demand for energy is changing; a lot more [companies] are using alternative sources of energy, wind or solar energy. So, you see oil and gas companies around the world merging business with utilities; they are trying to become an energy provider, not just an oil and gas company. The metals and mining companies, one of the things that is going to affect them in the next few years is probably going to be circular economy and the fact that companies like Caterpillar are trying to re-utilise a lot of their equipment, basically tracking the trucks that they sell and bringing them back to production, trying to refurbish them to be as good as new and put them out on the market. ArcelorMittal, from a steel perspective, are studying pilots around leasing steel sheets for temporary use by construction companies.
The demand is going to change in the next for years; and there continues to be volatility in the price of metals and mining products. So, there’s always this pressure that they have. Digital can help them solve that in lots of ways, or at least help them work around those issues. And the last of these issues is health and safety. More and more health and safety is a big topic for the oil and gas, metal and mining companies. And regretfully, if you take any public data of a global company, or any public data of a Russian company, and look at their statistics of health and safety, there has been a massive exponential improvement during the last few years – from many deaths to much less quantity of deaths, lost time due to injuries. But improvements have stagnated; and all these companies are looking for zero accidents. Their big goal is zero accidents, zero lost time due to accidents. That’s another big challenge. Health and safety is also aligned with social challenges these companies are being put under, to be clean, to be more efficient, to not destroy the environment and so on. Digital can help them with that. And the biggest challenge we’re seeing around implementing digital solutions is that only about 20 percent of companies are getting return on investment or on their digital produce or digital investment. That is very low. Of hundreds of millions of dollars they’re spending running pilots, trying to test new technologies and so on, only about 20 percent of the companies are really getting value out of there. That has to change.
So, the biggest challenge for most of these companies is how to go from “okay, we have a digital lab, we’re testing out these technologies, how to we scale them into production?” So, it’s very easy to get the data and test a new idea in a lab or in a small team in Moscow; but if you’re a steel company, if that doesn’t get implemented across all your steel plants in Russia, that pilot has no backing for it. It’s a problem around the world; in Russia, from my perspective, it’s a bigger problem; and I think that bigger problem comes from the fact that we have very good technology people here in Russia. Companies have very quickly become to be able to develop these small teams that can test new digital technologies, who can test AI or virtual reality, or who can test a drone in certain environments. We’ve got very good technology people, but we are not looking at it from the technology side; what needs to change is we need to start looking at it. For the oil and gas companies that challenge is massive because the oil and gas companies in Russia are huge, they’re everywhere; so, if you find something that works, you need to have the organizational model, the processes, the IT organization, the change management to actually deploy it across all of Russia, and it could bring a huge amount of resources. But if you just test it out in one small region and you don’t have the organization to deploy it, you just spend money.
Sputnik: What top 3-5 major solutions can “Accenture” offer to help?
Nicolas Gutierrez: It’s hard to name 3. It depends on how you look at it. One of the top areas where we see massive result for companies, where we’re really doing a lot of interesting work, is in using AI in analytics, production environment. For me, one of the greatest cases I’ve seen in the last few months has been in an underground coal mining South African company. In long-wall underground coal mining, you have something called the cavity failure, which is something when the roof of the mine falls and the wall comes down, and all the equipment keeps going; and hence you’ve got to stop production to clear that all up and then you can start mining again. This company was losing lots of money in these cavity failures; these are naturally occurring situations of the geology of the mine, but they are also affected by the human. So, the mine has a geology, the human has equipment, the equipment is operating, but the operation of that equipment actually affects how the geology will react. And that was a really interesting case; it’s almost like trying to predict tornados because you’re actually trying to understand a natural phenomenon, which is being affected by the human, and then you’re trying to predict what’s going to happen further.
We managed to develop a solution for that; and that solution tells the operator on a real time basis what they need to do to minimize the risk of having a cavity failure. For me, that’s super impressive because all the time the mining people said it cannot be done; and now this is actually in the production of this coal mining company, and they are planning to deploy it in multiple places. Those are solutions that save money and save lives, and they are totally applicable to our market, for the Russian mining industry.
I think people tracking and connected workers is another big solution for Accenture at a global level that is achieving very good results, especially in the safety environment. At the beginning of this year, Accenture got a prize for the solution we built for Chevron in the US, which is a solution that allows to track people and equipment in dangerous situations within 30 cm, and they especially use it around cranes and fork lift trucks and thing like that; and they are extremely happy about what we did with them there, and they are deploying it into two big operations of theirs to help avoid accidents.
They actually came to the conclusion that a lot of their accidents were due moving equipment, loads and cranes, that’s why they decided this was very important for them. I think I’m very proud of what we’re doing in Russia. I think that the work we did for Gazprom Neft around the well monitoring solution based on unity is a pretty impressive solution; and it’s not something you can replicate to anything but an oil and gas company, but the concept of how it was done, co-working with engineers of the client, doing very fast a prototype, using a tool that historically has been used – my son knows how to use this tool, I didn’t even know it existed; he loves to do digital animations, and that’s what the tool was used for. It’s not a tool that usually you would see in our environment of oil and gas, metals and mining companies; so, I’m very proud of that solution for Russia, I think it’s fantastic.
At a global level, I think that Accenture Interactive is amazing as it’s a company that does marketing and design for companies around the world, so a lot of the digital stuff that maybe you’re using from one or another company might have been designed by Accenture, from the user interface on a car or a sports bracelet, or something like that; it might have actually been designed by the teams of Accenture Interactive.
That’s another thing that at a global level for me is very impressive. And as I said at the beginning, it’s pretty impressing because that wasn’t us 4 years ago; that was marketing companies and digital designers, people who look like our customers, that’s us as well today. It’s really very interesting how the company has changed. So, I think that what Accenture Interactive does at a global level is pretty impressive.
Sputnik: The new technological reality opens up many possibilities, but what about the risks for the government? What social risks can we face?
Nicolas Gutierrez: Honestly, this is a point that – I love the way our Chief Technology Officer says it, and there is a book from Accenture about this called “Human+Machine,” it has been translated into Russian, but I heard him talking about this concept 2 years ago and he said that the problem is that we have the two extremes: we have people who think AI, robotics and digital technology is our, and there’s no risk of it; they are going to replace humans. And then there’s the other side that says that they’re going to replace humans and this is bad. What he said was that honestly, we don’t see that risk happening for most of people in the next few years.
The truth is that Human+Machine is going to be what’s really going to help us move forward. As I said from the mining example, we didn’t take away the operator; the AI is telling the operator what the best parameters that they can probably operate at are; and their expertise is also saying whether they should take those parameters or adjust them a little bit. But it’s the Human+Machine that is really bringing out the potential. Yes, there’re areas, which have more risk, like drivers. We can see lots of mines now with driverless trucks in the mine.
When Accenture used robotics, we apply this to ourselves, we applied that in our outsourcing centres. In once year we changed our processes that we were supporting our clients in, in finance, HR and other things. And we had a hundred thousand people doing that job. In one year we implemented robotics around process robotic automation and we reduced the need from 100 thousand to 80 thousand; but we didn’t get rid of any of those 20 thousand people, they were retrained, reskilled to do other services within Accenture. So, yes, there’s a requirement for a lot of reskilling and companies need to be preparing for this; because there’re functions that are going to disappear. But we are pretty positive that this is going to create a lot more of additional jobs and additional ideas.
I think the biggest risk is probably not doing enough to be efficient, and not doing enough around digital for safety. So, if you don’t implement it and you have any accidents, it’s a problem; so, you want to reduce those accidents, and you can use digital for that. Young people don’t want to work in dirty and dangerous environments. For our industries, metals, mining, oil and gas, companies like Rio Tinto created their centre in Perth, a beautiful city, on a beach; and now they are trying to have more people do operations using drones and robotics. So, instead of sitting next to a piece of equipment in a mine, in a dirty and dangerous environment, you’re operating the same machine but maybe with joysticks, and a drone, and a camera from a nice office in Perth. That’s what we’re looking for. There’s more risk around not doing things than actually doing them and finding that you can actually really help people with that.
Sputnik: What about the risks for the government?
Nicolas Gutierrez: I think the biggest risk within the government is not being agile enough to be ready with the right regulations when they are needed. I think what we’re seeing is speed in business that doesn’t match with a speed in regulations and in the means of the government. I think that’s the biggest risk that we need to be aware of. Some technologies might be not good, and some ideas of how we use those technologies need to be regulated; and hence the government needs to move, but they need to move fast enough to actually do it.
On the other hand, there’s another risk. If you regulate too much, you might find yourself falling behind other countries who didn’t regulate. And we can see this, for example, in everything that has to do with bioengineering. In the US it’s heavily regulated, in China it’s not; and China is moving ahead much faster than anybody else in terms of using bioengineering and discovering new technologies around bioengineering. Yes, there’re a lot of ethical questions, for example what has been done in China around bioengineering; but at the same time if you regulate too much, you might find that 10 years from now they’re doing things that you’re not even ready to manage, and they’re just getting ahead of you.
Sputnik: What should be the role of the state in the fourth industrial revolution? Stimulating business, setting its own example, or not interfering at all?
Nicolas Gutierrez: Again, being smart and agile around regulations. Moscow city is doing great on some things, from the apps for parking; go to South European cities, they don’t have that. Car sharing is amazing in Moscow city. So, I think the government needs to lead by example by applying these technologies where possible. I loved the Mayor of Moscow’s speech this year where he spoke about using intelligence to better understand where there’s need; so, without having to create more kindergartens to be able to generate more opportunities for kids to go to kindergarten by managing what the needs are and where you have more kids.
I don’t remember exactly the examples he gave; but I really liked some of his perspectives on Moscow city and using these technologies. So, I think they need to be agile and they need to lead by example; and I think they need to find what the right options to encourage companies to also implement a lot more digital technologies in an ethic and safe way are.
The views and opinions expressed by the speaker do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.