In this post we introduce guest blogger Martin Veitch, Editorial Director at IDG Connect UK, who will present at the Innovation Tour in London on March 21, 2017.
The energy sector’s focus has historically been on the oil price dynamics of supply and demand. The implications for capital efficiency, business intelligence, data management, and enterprise information management technologies are now changing the once physical nature of energy.
Globally both companies and business leaders are now grappling with a world that is more volatile and more complex, yet demands greater agility, more speed, and more digital competence. It’s a topic we’ve studied in depth, surveying senior executives in energy companies across the UK, Denmark, Finland, and Sweden. I’ll be presenting the research findings in greater depth and explaining why digital transformation is so crucial for the energy sector in my upcoming presentation at the OpenText Innovation Tour London on 21 March.
Obviously I don’t have space to cover all of the main findings and implications from our research in this blog, so I’d like to touch on just some of the industry-wide challenges and degree of digitisation we are seeing.
The biggest challenges the research discovered are around maintaining service levels, and avoiding down-time, which are both crucial for the energy industry as every down-time second impacts the bottom line. The second biggest challenge cited by our respondents involves customer retention and meeting industry regulations. New industry disruptors are more agile and able to adapt to new regulations faster, giving them a competitive edge in winning market share.
And of course, just about every company is concerned about making enough money to maintain, repair and replace infrastructure and assets – especially the capital investments required in both digital technology as well as physical plants. Which leads to another issue – the current lack of digital skills and what to do about. (I’ll be touching on how some companies are addressing these challenges in my presentation).
Respondents say the best opportunities for digitalisation lie in the ability to store and search media rich content effectively and gain insight to make better decisions. The three obvious areas of digitisation – keeping up with supply and demand and load balancing, administrative workflows, and customer contact – still have a long way to go in many energy companies. Most are focused on the front end looking at digital interaction with customers for workable and attractive solutions, but successful digital transformation requires a holistic, end-to-end view. But lack of budget, management buy-in, and being able to point to a hard ROI remain big barriers to digitalisation.
There’s still time to get your house in order – most respondents in our research expect full digitisation to become a reality in the next 5-10 years. But the runway is getting shorter. As technology disrupts business models, adoption accelerates and competition increases, digital readiness will become one of the deciding key factors in long term success.
If you look at every other industry that has gone through disruption, history shows that technology powers the winners – period. If you’d like to hear how the leading energy companies are getting their house in order, join me on the 21st March at the Innovation Tour.