With the wave of digitization hitting every industry in the world, from agriculture, supply chain management to aeronautics, it is only natural that it will sweep with it, the energy and natural resources industry towards a revolution.
As an offspring of industry 4.0, energy 4.0 is the new reality in the sector. In fact, so much so, that every step from extraction, refining, until the final product reaches our homes and powers our lives is adapting to embrace the advancement of digital. Needless to say, the value that digital tech can add to the industry has unprecedented potential; as estimated by Bloomberg it stands at twice the value in the span of 8 years between 2017 to 2025!
But then why is it that only a fraction of companies in this sector is able to attribute a sure shot succes to digital transformation?
When a technological wave sweeps the world, it is only fair to accept different sectors embracing it in different paces. Energy and natural resources have been one sector that stands out among those trying to catch up with the frontrunners but failing and the staggering 95% failure rate demonstrates that something is certainly going wrong in digital scaling with this sector.
Through this piece, we will find answers to all the questions that can help us understand where we energy is lacking and how we can overcome it.
What Is Digital Transformation Doing Industrially For Energy and Natural Resources?
The most commonly observed disruption by digital initiatives in the energy and natural resources sector is hands down with regards to the mining and utilization of big data along with the heavy reliance on the Internet of Things (IoT).
However, the impression of automation in this industry is also too strong to be overlooked. In fact, this might well be where the problem begins. To automate a traditionally manual process the equipment required needs to transform, much like the skills of the personnel involved along with the team managing every asset that is associated with the automation in any way.
Therefore, the most critical driver of the industry in terms of digital scaling continues to be the management of reliability and compliance goals.
Why Are Digital Initiatives Failing To Scale?
The first step in the successful implementation of any new technology that has the potential of the way work gets done in a professional ecosystem is understanding their own capacity to absorb the change. This brings in the first factor that leads to the failure of scaling digital initiatives in the energy industry -- cross-functionality.
When we are talking about energy and natural resources, both the nature of operational teams and assets are varied. This variation and cross-functionality makes it difficult to create a synergy when digital initiatives are being introduced. Putting in place a comprehensive plan that checks all items in the list to streamline the capital, resources, and human resources allocation is where most companies are going wrong.
Besides that, we cannot overlook the legacy infrastructure that takes years to build for an effective energy model. Transforming it to scale digitally is not a job that can be done overnight. And when it comes to developing new business models and upgrading infrastructure, the process is one that needs careful detailing and time; an investment that several companies are hesitating to make.
What Is The Scope Of Digital Scaling In Energy And Natural Resources?
The above indication is indicative of two things -- there is immense scope for digital scaling in the energy and natural resources sector and that this vastness of this scope is the very reason why most companies end up making scuttered decisions.
Having covered that, we also understand that the inception needs to happen somewhere that can provide a solid base for future developments. According to common observation, a surely safe arena is the output areas in the energy supply chain.
Let’s here shed light on where every energy company can begin, regardless of stature and familiarity with digital.
Automation and digital infrastructure are easy to implement in an operation like the incident response because this proves to be only an upgrade from what was previously being done. Without a complete transformation, faster-digitalized incident response can help save a lot of resources, capital, and time while minimizing operational risks.
Digital has enabled real-time asset monitoring -- an area that was almost impossible to cover manually due to lack of feasibility but can now be automated and help companies save millions of dollars per hour! This can be undisruptive and successful because this is a mere addition.
A strategy as simple as mobile-administered field services can go a long way in making saving time on several tasks from work orders, complex routing to solving customer requests.
Finally, an area that must be included in every formula of an energy company is enhancing customer engagement. The kind of money and business a company in this sector loses due to poor optimization of customer engagement is unreal. And the boost that simple digitization to personalize engagement can provide is unbelievable.
How Can Companies Ensure Consistent Digital Scaling?
In three words; ‘the right approach’.
Digital scaling or transformation for that matter is not a cakewalk and every industry must understand that. Irrespective of the premise or position of the industry technologically, scaling digitally will only be possible if the technology operators are able to fall in step with them.
Especially a sector like energy with too much at stake and heterogeneity in processes, value creation should be prioritized in the directional approach. An important way to implement this approach is beginning with optimizing and advancing the existing processes rather than going for a radical change and trying to bring in complete transformation at once. Over 90% of such hasty digital initiatives have failed.
To ensure scaling, therefore, the energy and natural resources, like any other industry, need to have a ‘slow and steady’ approach instead of ‘we’ll cross that bridge when we come to it’. if you want to know more details feel free contact to our experts.