Baker Hughes 2014 Annual Report Download - page 11

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CREATINGVALUEBY
INCREASINGTHEPACEOF
COMMERCIALIZATION
During 2014, we focused on creating
value for our customers by commer-
cializing innovative products
and services designed to help them
compete at their highest levels by:
Fundamentally improving wells,
redefining technical limits and
driving step changes in efficiency
Building on our broad technology
portfolio and commercializing
a new range of creative solutions
to accelerate and optimize
production
Bringing the full strength
of our reservoir and geoscience
capabilities to increase ultimate
recovery.
Three key themes, closely linked
to our enabling role of bringing safe,
affordable energy to society,
underpinned our strategy and
played pivotal roles in technology
development:
Innovation: Redefining technical
limits and pushing the pace
of commercialization
Integration: Creating new
combinations of products and
services from our existing
portfolio and integrating them
with new commercial models
Interdependence: Redefining
collaboration with our customers
in order to develop technology
that meets their most difficult
challenges.
In 2014, our commitment to these
strategies enabled us to take
technology innovation and devel-
opment to unprecedented heights.
We introduced 160 new products,
equating to one new product every
55 hours and to more than $1 billion
in revenue from new technologies
within their first 12 months of
commercialization – a 20% increase
over the 2013 totals.
INNOVATINGTHROUGH
INTEGRATION
Technology innovation is not limited
to the development of stand-alone
new products. With approximately
12 major global product lines that
span nearly 2,000 product families,
Baker Hughes created value
through the year by combining tech-
nologies from our existing portfolio
into integrated services designed
to transform customer workflows,
such as improving efficiency
or creating new approaches across
the value chain. Unlike bundling,
these service value combinations
logically fit together and offer
a superior outcome for both the
customer and Baker Hughes.
More than $750 million was realized
through service value combina-
tions in North America alone in
2014. Following this success, similar
programs have been initiated
in our Europe/Africa/Russia Caspian,
Latin America, and Middle East/
Asia Pacific regions.
ACCELERATINGEARNINGS
BYOPERATIONALIZING
INNOVATION
Much of the success we saw
in 2014 is attributable to the
“operationalizing innovation” process
we pioneered during the year.
The premise of the process is that
innovation matters only if the new
product hits the right market at
the right time and at the right price
point. To ensure that we hit these
targets, we focused on accelerating
time to market, building a fabric of
collaboration across our technology
and operations organizations,
and establishing concrete first-year
revenue goals for each new product.
The outcome was the delivery
of some of the industry’s most
groundbreaking technologies.
One of these technologies comes
from our artificial lift business.
For many years, rod lift systems
have been the industry’s accepted
solution for producing from wells
with lower production rates – but
in unconventional oil wells, where
the production decline curve and
downhole conditions change rapidly,
rod lift technology falls short.
We believe that a revolutionary
new technology holds the key
to completely transforming the
artificial lift marketplace.
The Baker Hughes linear electromag-
netically actuated pumping (LEAP™)
adaptive production solution,
announced in 2014 and coming soon,
takes an entirely new approach to
artificial lift. The new technology
uses a linear drive system, powered
by a permanent magnet motor, to
push a positive displacement pump
that lifts production to the surface.
The LEAP solution adapts efficiently
to changes in a well’s flow rate,
eliminates reliability issues related
to deviated wellbores, can be placed
deeper in the well without sacri-
ficing system efficiency, requires
a smaller surface footprint, and
eliminates the leaks and emissions
common to rod lift technology.
With a strong demand for better,
more cost-effective ways to boost
recovery in shale plays, the solution
is on track to help Baker Hughes
capture even greater share in the
highly desirable artificial lift market.
The LEAP Adaptive
Production Solution.
An entirely new approach
to artificial li