Why Digital Transformation is so Crucial for the Energy Industry
image credit: TouchstoneEnergy
- Jul 15, 2019 1:09 pm GMT
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The easy days for energy are over. As companies explore further in more remote and harsher conditions, they’re certain to face greater challenges.
Exploration companies are under more pressure than ever to get resources at the lowest possible cost and the highest possible quality. Profit maximization is the top business concern of energy producers as they work to change cost and process efficiency of their operations.
This change in operating environment is where the role of technology and its importance to the core activities of the energy sector is becoming a critical enabler for energy operations that consistently need to meet financial and production performance benchmarks.
Automation of business processes, operations management and cost control are the top strategic objectives of energy organisations.
The ability of business intelligence and data integration technologies is changing the once physical nature of energy.
Disassembling digital transformation into its individual parts helps demonstrate what it means to energy companies. TouchstoneEnergy’s perspective on digital transformation is that it is made up of four key components –
- Leadership - Innovation and collaboration across senior leadership, IT and operational technology. Taking a top-down approach to Digital Transformation.
- Information - utilization of data across the organisation to create greater business value.
- People - having the skills in place to support digital transformation but also to engage with external providers to assist with change.
- Design – an operating model connecting people to business processes, data and activities allowing your organisation to adapt to change quicker than your competition.
For energy companies, competitive differentiation through going digital, is about how technology is changing the physical reality of managing operations – by changing the processes that are core to energy operations, you improve productivity and reduce operating costs.
Companies that have been able to successfully transform their digital capabilities in the Energy Sector display the following characteristics:
- A willingness to experiment: Work across your organization to create research insights. Look externally to other industries for examples of successful approaches across process innovation and technology initiatives.
- A willingness to change: Data led insights and process automation will only deliver value if there is a culture of change. The willingness to change the established ways of doing things, change work practices and approaches.
- A willingness to act: The investments required to create visibility and control are often challenging and have an associated level of risk. Start with small example to demonstrate value, and as you work to larger investments, keep demonstrating value at each stage.