The only constant that we find these days in the Energy industries is change. Whether it is lower oil prices, pressure to generate power from renewable energy sources, or increasingly complex government regulations, today’s business realities are forcing new approaches. In the longer term, these digital transformation approaches promise to increase operating efficiencies, increase revenues, and reduce operating costs, but today’s business dynamics are forcing companies to confront these challenges today.
While there are a number of areas that have been identified by analysts, energy industry experts, and other consultants, including Accenture, there are three key areas where the digital transformation is either forcing the energy industry to react or providing opportunities for the industry to transform themselves. Let’s explore each.
As with many other industries, the most pressing need for businesses is improving the ways it interacts with its customers. In 2014, a study conducted by the Altimeter Group found a couple of very interesting facts:
- Only 25% of those companies surveyed have a clear understanding of the new digital possibilities and their applicability for their business
- But nearly all of these same companies – 88% of respondents – where aware that their businesses were undergoing digital transformations of some kind.
These same alarm bells are impacting the Energy industry. While the industry struggles with many of the issues discussed earlier, customers are increasingly demanding that their vendors raise the bar with respect to customer interaction, real-time support, and more.
Whether it is helping customers to understand your company’s offerings, providing better tools and insights to enable your customers to make better choices, or launching new touch points to allow your customers to better interact with your customer service and support teams, customer engagement is an important facet of a company’s digital transformation.
With real-time asset performance data comes the ability to analyze this information to improve operations. As it applies to oil & gas pipelines, distribution, or the smart grid, digital transformation principles promise to improve fault isolation and outages, optimize performance, and more effectively integrate distributed assets. Real-time data analytics, increasingly available through cloud-based technologies, enable operators to more effectively manage real-time challenges, as well as to predict actions appropriate to improve productivity, identify fault causes and locations.
Advanced analytics and integration with asset management tools provide more insight in market demand and the corresponding productivity requirements. By increasing their focus on customer requirements and patterns, companies are able to optimize their demand response and, ultimately, increase their revenues.
Digital Asset Management
The final area that we will explore regards long-term planning and investment into Energy industry assets, such as refineries and oilfields in the Oil & Gas industry and power generation and transmission in the Utilities industry. In this area, we actually see two dimensions of transformation that have the potential to yield significant benefit.
- Digital Asset Management: more effectively use asset information, data, and analytics to predict asset performance, identify changing conditions, and evaluate investment options. Through real-time monitoring, data aggregation, and
- Digital Field Worker: drive greater efficiencies through more effective management of work requirements, improved planning and scheduling, and logistics optimization. Work order and information management solutions are critical to enabling these efficiencies and reducing the ad hoc and tribal knowledge that most operations still rely upon today.
Information Technology investments that enable the connection of physical assets with the virtual environment through business solutions, enabling energy companies to create transparency across their daily operations. Digital Transformation is not just about being able to see what is happening across an organization but also to create the ability to control and predictively respond to operating environment factors to maximize operational efficiency.
We will be exploring each of these areas in more detail over the coming months. It will also be a focal point for discussion at Momentum at EMC World this May in Las Vegas. In the mean time, help us understand how you are exploiting digital transformation in your business.
- Has your organization begun its digital transformation?
- Are you pursuing one the initiatives above? Are you pursuing others?