Hello from Alaska!
The world is in a race for energy, and that race is just as much about information management as it is about energy itself. Prices of most forms of energy (electricity, natural gas, oil, etc.) have recently touched record highs on an annual average basis—or are fast approaching such figures. With global population expected to rise by 2 billion people by 2050 (25%) and, by some estimates, the global economy to grow twofold and produce 15% more energy, the energy and utility industry will never move this slowly again.
To keep pace, it’s imperative that companies across the energy and utility sector modernize how information is managed and seamlessly moves across and outside their enterprise. Information management best practices and technologies will need to be continually adopted to deliver energy to the communities they serve safely, reliably, sustainably, and cost effectively.
Here are my predictions for the information management trends most likely to impact the energy and utility sector, as well as other industrial process markets, in 2024.
Smarter capital project execution
Cumulative energy capital expenditures are projected to increase 18 percent from 2021-2025 compared to the 2016-2020 timeframe. Through another lens, capital project investments will need to climb from $3.5 trillion today to $9.2 trillion by 2050.
Project excellence in the energy sector today will be considered average at best just one decade from now. And in many instances, project execution is already failing today. Despite advances in project management, construction management and engineering software categories,nearly 50% of projects worldwide between 2010 and 2020 were delayed. Three out of the top five reasons for those delays were related to engineering drawings, procurement issues, and other business processes. Companies must seek ways to eliminate these delays and incorporate content services, business network, artificial intelligence, and other information management technologies to execute capital projects on-time and on-budget.
Smarter asset operations
Today, if you look at an annual report for any energy company, they are managing 25 to 100 percent more gross plant, property, and equipment per employee than a decade ago. This ratio of man to machine will not just need to continue, but even accelerate. Like capital project execution, what is excellent operational performance in the Energy sector today will be considered average in a decade, forcing organizations to evolve and modernize asset management strategies.
According to Siemens, ”Fortune Global 500 industrial organizations lose $1.5 trillion each year though unplanned downtime.” Energy, utility, and other industrial companies will incorporate technologies like asset information management, supply chain digitization, and AI to ensure operations and maintenance, engineering, and other key personnel have information at their fingertips to ensure critical equipment is always running.
Smarter and total experiences for utilities
J.D. Power, a leader in customer insights and perhaps best known for customer satisfaction surveys, points out, “unless utilities bring their customers along, utilities will struggle to achieve their clean energy goals they have put in place for the coming decades.” The key word in this statement is ‘along’ and implies that the sustainability journey for communities is based on relationships between the utility, its employees, and its customers.
Just as there can be no customer experience without employee experience, there can also be no sustainability without social relationships. Utilities will extend their customer experience journeys to also include employee and operational experiences. The entire customer lifecycle—from attracting, to acquiring, to serving, to delighting and, most importantly, retaining—is cluttered with unstructured information. Utilities need customer experience technology that also prioritizes the employee experience to capture, organize, and integrate all of this information and gain insights, so they can provide an excellent total experience while also helping their customers move towards a more sustainable future.
Smarter cybersecurity for energy
Cybersecurity incidents targeting energy and commodities infrastructure reached record highs in 2022, according to S&P Global. “Oil assets and infrastructure were the biggest targets for hackers, accounting for a third of all incidents since 2017. Electricity networks were the next most vulnerable, making up over a quarter of all incidents.”
Smart oilfields, smart grids, smart refineries, and other smart asset initiatives across the energy sector are only ‘smart’ if they don’t get hacked. These ‘smart’ initiatives have predominantly been focused on sophisticated operational technology and kept cybersecurity initiatives separate. With the convergence of information technology and operational technology systems, smart energy asset initiatives in 2024 have room to get smarter by employing cybersecurity best practices and technologies across the two systems as they further converge.
Safer energy operations with AI
Reports indicate that up to 80% of employees’ time in the industrial process sector is spent searching through unstructured information. As a former field engineer in the energy sector, I’ve personally felt the impact that this has on productivity.
In the year ahead, advanced technologies such as generative AI and IoT will be increasingly adopted in areas to capture, analyze, and assess safety risks. Humans can do something machines cannot do (well, at least today) — turn wrenches. AI will be used to help them free up time and safely execute tasks that machines cannot perform.