Breaking Silos: Value Chain Modernization in Oil & Gas

The New Imperative: Modernizing the Oil & Gas Value Chain

The oil and gas industry stands at a crossroads. Volatility, decarbonization pressures, and the accelerating pace of digital innovation are reshaping the sector’s landscape. To thrive, companies must move beyond incremental, asset-level digitalization and embrace value chain modernization (VCM)—a holistic, end-to-end transformation that breaks down data, organizational, and process silos. This approach is not just about technology; it’s about reimagining how value is created, captured, and sustained across the entire business.

The Silo Challenge: Barriers to Value Chain Modernization

Despite generating vast amounts of data and operating across complex global networks, oil and gas companies have long been hampered by silos:

Data Silos: Information is often trapped within business units—upstream, midstream, downstream, trading, and retail—making it difficult to gain a unified view of operations or customers.
Organizational Silos: Divisions are incentivized to optimize their own performance, sometimes at the expense of the broader enterprise. This misalignment dilutes business benefits and stifles cross-functional collaboration.
Process Silos: Legacy workflows and manual interventions limit the ability to forecast, optimize, and respond to market shifts in real time.

These barriers are not just technical—they are cultural and structural. As a result, companies risk missing out on hidden value that exists in the gaps between functions, partners, and markets.

Why VCM Now? The Commercial and Strategic Drivers

The energy transition, regulatory changes, and shifting customer expectations are forcing oil and gas companies to rethink their value chains. Decarbonization is no longer a distant goal; it is a commercial imperative. Companies must balance short-term profitability with long-term sustainability, leveraging government incentives, carbon markets, and new business models. Achieving this balance requires:

End-to-end visibility: Understanding how decisions in one part of the value chain impact profitability, emissions, and customer outcomes elsewhere.
Agility: The ability to pivot quickly in response to market disruptions, regulatory changes, or new opportunities.
Data-driven decision-making: Harnessing analytics, AI, and automation to optimize operations, manage risk, and unlock new revenue streams.

The Role of Digital Platforms: Enabling Cross-Functional Optimization

True value chain modernization is not possible without a robust digital foundation. Leading oil and gas companies are investing in:

Cloud-based data platforms: Unifying data from disparate systems to create a single source of truth, enabling real-time analytics and collaboration across functions.
AI and advanced analytics: Forecasting demand, optimizing trading strategies, automating scheduling, and identifying operational anomalies before they become costly issues.
Blockchain and smart contracts: Streamlining post-trade processes, reducing errors, and enhancing transparency in commodity transactions.

For example, a global energy company partnered with Publicis Sapient to build an end-to-end value chain optimization platform on the cloud. By integrating data from transactional, financial, and operational systems, the company gained the ability to make data-informed decisions that lowered costs and increased revenues. Another major oil and gas firm migrated its supply data platform to the cloud, resulting in a 45% improvement in query speed and the launch of self-service business intelligence capabilities.

Leadership Strategies: Breaking Down Silos for Sustainable Change

Modernizing the value chain is as much a leadership challenge as it is a technical one. Success requires:

Executive sponsorship: Leaders must set the expectation that divisions act in the interest of the whole organization, not just their own P&L. Incentive structures should reward cross-functional value creation.
Systematic change: Relying on individual champions is not sustainable. Companies need stable, platform-based approaches that embed collaboration and data sharing into daily operations.
Cultural transformation: Empowering teams to act on insights, experiment with new business models, and learn from other industries that have successfully broken down silos.

Technology Enablers: AI, Blockchain, and Beyond

Artificial Intelligence: AI is critical for operational reliability and forecasting. It enables predictive maintenance, demand forecasting, and real-time optimization across the value chain. For instance, AI-driven analytics have helped companies reduce maintenance costs, improve asset utilization, and even predict supply disruptions due to fluctuating renewables.
Blockchain: Platforms like VAKT are transforming commodity trading by replacing manual, error-prone processes with smart contracts, reducing post-trade costs by up to 40%.
Cloud and Data Integration: Migrating to cloud infrastructure not only reduces costs but also accelerates the deployment of advanced analytics and AI services, as demonstrated by Chevron’s migration of over 200 data pipelines to Azure.

Real-World Impact: Publicis Sapient’s Experience

Publicis Sapient has partnered with leading oil and gas companies to deliver tangible results:

Chevron: Migrated its supply data platform to the cloud, enabling faster queries, self-service analytics, and improved scalability—all while minimizing business disruption.
Top Global Oil & Gas Company: Adopted infrastructure-as-a-service to reduce total cost of ownership by 25% and cut hardware provisioning time by 80%.
End-to-End Optimization: Built platforms that integrate data from exploration to customer delivery, enabling scenario modeling, predictive analytics, and agile response to market changes.

The Path Forward: Three Steps to VCM Success

Break Down Data Silos: Use technology to unify data across functions, enabling seamless information flows and more intelligent business choices. This is the foundation for all other transformation efforts.
Create Incentives for Sharing: Align metrics, rewards, and learning programs to encourage collaboration and value creation across the value chain—not just within individual silos.
Clarify the Commercial Benefits: Track and communicate the impact of VCM using robust performance indicators and predictors. A strong, agile value chain is better positioned to capture new opportunities and weather market disruptions.

Conclusion: The Future of Oil & Gas is Connected

The oil and gas sector is facing its greatest challenge—and its greatest opportunity. By breaking down silos and modernizing the value chain, companies can unlock hidden value, accelerate decarbonization, and build the agility needed to thrive in a rapidly changing world. Publicis Sapient stands ready to partner with industry leaders on this journey, bringing deep sector expertise, proven digital capabilities, and a relentless focus on delivering measurable business outcomes.

Ready to break your silos and modernize your value chain? Connect with Publicis Sapient’s Energy & Commodities team to start your transformation journey.