Senior Writer

McDermott data innovations fuel business transformation

May 23, 2022
Data Management Digital Transformation Energy Industry

The oil rig contractor is shifting to stay ahead of sustainability trends. New products borne of IT innovations around the company’s data operations are helping it get there, CIO Vagesh Dave says.

oil rig alaska oil production industrial internet of things drilling construction by elgol getty
Credit: elgol / Getty Images

When a giant contractor of offshore oil rigs invests heavily in building sustainable, low carbon-footprint structures and products, it’s a sea change.

For oil rig constructor McDermott International, that transformation has in no small part been fueled by IT. 

Global Vice President and CIO Vagesh Dave says IT advancements in the cloud, analytics, and data management have transformed McDermott – and its industry – into an innovation engine.

The Houston-based oil and gas engineering company has developed a number of sustainability products to meet the needs of its energy customers, thanks to its Digital Innovation Center in India, which started more than three years ago.

To date, the center has produced VesselXT, a digital twin that collects IoT data from key assets and system on a vessel; ArborXD, a tool that enables engineers to build sustainability or low carbon footprints into their products; and SubseaXD,  a licensed and modified software application that enables engineers to conceptualize and design subsea projects.

These products, now available commercially, provide another example of productized IT becoming a revenue generator.

“These were products built for internal use but now software customers are asking for it so that has become a revenue stream for us,” Dave says, noting this internal shift to sustainability is enabling his customers to move away from gasoline. “Now, when engineers are designing an oil platform or LNG facility, they can actually pick one with lower carbon content.”

The IT innovations are part of a larger push by McDermott International to keep ahead of the migration away from fossil fuels and toward hydrocarbons such as LNG. The contractor is also undertaking the creation of hydrogen facilities.

“This is a big differentiator for us,” says Dave, who is a finalist in MIT Sloan CIO Leadership Award. “It’s really about doing things in a sustainable manner.”

‘Cloud first but not cloud forced’

McDermott’s sustainability innovation would not have been possible without key advancements in the cloud, analytics, and, in particular, data lakes, Dave notes.

Vagesh Dave, global vice president and CIO, McDermott International

Vagesh Dave

McDermott International

McDermott, an early adopter of Microsoft Azure, is heavily reliant on the Microsoft cloud and its extensive platform, including Azure Data Lake Analytics, Azure Synapse Analytics, and Azure AI. Azure represents roughly 70% of McDermott’s cloud load with the remaining data running in SaaS applications on AWS or on premises for engineering applications that require low latency, he says.

Although McDermott’s shift to the cloud is nearly complete, the company banks on a hybrid “cloud first but not cloud forced” philosophy, Dave says.

The CIO endorses cloud-native development when appropriate but is a big believer in using best-of-breed SaaS applications, such as Salesforce and, and in using McDermott’s on-premises data center as application needs dictate. “We’re very hybrid,” Dave says.

Fueling innovation with data

But for Dave, the key ingredient for innovation at McDermott is data. The structures for mining this fuel? The company’s data lakes in the cloud, which, along with associated tools such as analytics and AI, is what has facilitated McDermott’s IT transformation.

“We’ve made tremendous strides because the data lake just opens the whole world of data mining, gaining insights from analytics and using AI,” he says, noting that the platforms have enabled McDermott to change the way it works for its customers. “The conversation changes to a whole different level.”

McDermott uses these tools to give its engineers in India, Europe, Dubai, and Saudi Arabia a similar experience as being in the company’s Houston headquarters. “Say we have a customer in Saudi Arabia that cannot travel to Indonesia to do inspections on a structure we’re building for them,” Dave says. “We can [set them up to do] remote inspections.”

Plus, analytics on McDermott’s data platform provide the company with key insights about business trends and real-time shifts in its supply chain.

“Suppose we’re looking at a large shipment from Italy, and you’re looking at supply chain dependencies, the data predicts there may be a spike there,” Dave says, adding that this information is very valuable to McDermott’s customers.

McDermott is also using AI and visual analytics to detect incorrect configurations or defects in its designs, and it is training AI models to analyze bids from suppliers according to pre-set conditions. Such automations could provide McDermott a significant productivity boost, Dave says.

“If there are particular algorithms, I can come up with a supply chain where if certain conditions are met, I don’t need supply chain personnel doing those things,” he says. “Then maybe we can have a dashboard that looks at anomalies on spot-checking. It’s really about taking away that burden of manual work from employees.”

On the  horizon

Over the next year or so, Dave will focus McDermott’s IT operations around five core priorities, chief among them: implementing modern cybersecurity tools, reimagining the company’s infrastructure for agility and flexibility in support of its hybrid workforce, and rebuilding and automating remaining legacy applications.

But perhaps the key priority for Dave in the short term will be talent development. “How do I train my employees in all the new technologies coming?” Dave asks. “The pace of technology development is so rapid, but if I look at it in two years, it’s more affordable and works much better.”

By making an upskilling investment in McDermott’s IT workforce Dave will be well positioned to deliver on his fifth priority: continuing to push the company to stay ahead of the pack by embracing new technology. Doing so will help keep McDermott ahead of industry disruptions.

“Constant infusion of technology knowledge in my own IT employees is really important now,” he says. “But it’s my job to be the evangelist working with the business to do a small pilot or improve KPIs. Driving innovation is now a higher priority for me.”