Digital transformation can help energy firms navigate a turbulent market, but they need to focus on practicalities, deliverable projects, appropriate partners, and organisational change.
If ever there was a year to talk about unprecedented challenges in the energy sector, 2022 is it. From wildly volatile prices and accelerating adoption of renewables to concerns around grid resiliency and ever-more complex consumption patterns, energy firms of all kinds have their work cut out for them to not just increase profit, but simply survive.
Accordingly, 2022 is the year digital transformation needs to step up and deliver for the sector, as we know it can – a McKinsey analysis shows it can provide 10-30% improvements in cost management, and 2-10% yield improvements. Digitisation must stop being a theoretical nice-to-have, and become an integral part of how organisations deliver on their project goals.
Here are five crucial factors we think energy organisations need to keep in mind when planning their digital transformation:
1: Business-driven digital transformation
Of course firms need to consider the business case for a transformation project. But more than that, they need to commit to the transformation – instead of creating an experimental unit.
Business units need to build digital transformation into their project lifecycles, create deliverable targets, and stay accountable to them. Whether it’s to track finances, automated reporting, real-time sensor integration, or anything else, bake it into your business.
2: No moon-shots
As tempting as a single monolithic transformation project can be, all the evidence shows this approach will be slow and ineffective. Instead, take on transformation projects where opportunities arise.
Don’t be afraid to make mistakes either, especially when starting your transformation journey. While “move fast and break things” might not be quite applicable to the energy sector, iterating from smaller projects and learning from mistakes will pay dividends in the long run.
3: Explode silos
An obvious risk from taking on several smaller transformation projects is that they end up being mutually incompatible, in goals or technology. To avoid this, keep transformation project managers talking across projects and departments, and encourage movement between teams.
4: Organisational transformation
Firms that succeed at digital transformation understand this is not a layer to be added to an organisation, but part of the organisation’s ongoing transformation. While this can sound intimidating, all successful organisations implicitly understand the need to be flexible.
So if (or when) a digital transformation project highlights ways the organisation needs to change as a whole, embrace this – in a considered way.
5: Choose partners wisely
It can be tempting to stick with names and suppliers you’re familiar with, but making sure they’re the right fit for your organisation is critical. Bearing in mind point 2, a new monolithic ERP implementation may not be what your organisation needs.
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Xergy Group’s Proteus work management solution is designed to work with your existing systems, and to scale and evolve as your business evolves. It was created by energy sector professionals, for the diversified energy sector, and delivers an end-to-end project management software platform compliant with ISO audit requirements and common project management frameworks.
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