Digital transformation in the energy industry has been underway for decades. The sector was an early adopter of digital technology, using it to improve grid management and operations. However, the process of leveraging technology has become more complex, so the energy vertical’s digital transformation is still in progress.
This increased complexity is the result of emerging energy sources and less dependence on gas and oil. Additionally, while the demand for energy continues to rise, it’s not an infinite resource, so the energy sector still has room for improvement.
Let’s explore what initiatives the energy industry can put in place that will help the organizations on their journey.
What Does the Energy Industry Have to Gain from Digital Transformation?
Energy’s objectives and expected transformation outcomes are similar to those in other industries—reducing costs, improving efficiency, optimizing human resources, and achieving leaner operations. According to the World Economic Forum, digital transformation could unlock $1.3 trillion of value for the industry. However, the institution goes on to report that digital initiative adoption is varied and not substantially mature.
So how do energy companies reach this maturity and jump-start their digital transformation efforts?
Digital Transformation Initiatives for the Energy Sector
There are many digital transformation initiatives important to the energy sector. It depends on the area or type of energy company. The primary initiatives include:
- Aggregating Internet of Things (IoT) device and equipment data to understand asset performance and then improve it. Standardization of this data is possible thanks to robotic process automation (RPA) bots. The inclusion of artificial intelligence (AI) can analyze this data to support predictive maintenance and asset management. With this initiative, companies can reduce maintenance costs and the risk of downtime.
- Using RPA to automate error-prone and repetitive tasks that don’t require human intervention, such as billing validation. The result is a reduction in the time these activities require and supports operational efficiencies.
- Improving customer interactions with automation tools that simplify account setup, manage customer queries, and offer more self-service options. In using technology, customers receive prompt assistance, and energy companies don’t have to expand their customer service teams.
- Optimizing grids using real-time load balancing and connected assets to reduce outages and predict demand peaks so operators can proactively respond.
- Leveraging intelligent automation, which involves elevating RPA with AI, to defend against cyberthreats. According to expert analysis, the industry is at high risk of cybercrime, especially in the areas of fraud, customer data theft, destruction of infrastructure, and safety. It’s an attractive industry to cybercriminals, partly because of the continued use of legacy systems. RPA can drive efficiency and accuracy in cyber processes, while AI helps determine the correlation between threats and vulnerabilities.
- Enabling interoperability between new and old systems. As noted above, legacy environments and infrastructure are part of the energy industry. Many times, they can’t just be decommissioned and need to work with more modern solutions. Automation can be the interoperability bridge required to improve efficiencies.
Why Digital Transformation Is Difficult for the Energy Industry
The initiatives above are extremely complex to facilitate. The industry runs into a host of challenges that make digital transformation difficult. It’s a complex industry with many diverse stakeholders. That’s just the start of the problem.
Other key challenges include:
- Energy is a highly regulated industry, yet regulations vary by state.
- The culture of energy is engineer-driven, and that makes change harder.
- There are many types of energy, so there are no blanket approaches.
- As mentioned above, legacy systems don’t always assimilate into modern workflows, causing manual work.
- The demand for energy is only getting higher, causing new issues associated with supply and demand.
- The integration of emerging energy types into the grid is complicated and requires lots of foundational work.
- Like many other industries, energy companies must do more with fewer resources.
So how do you mitigate the impact of these issues?
Overcoming Barriers to Transform: The Path to Implementation
Digital transformation in the energy industry should follow defined steps that support success. These steps are universal across industries and organization types. They provide the best path forward toward digital transformation by using the power of automation to overcome and persevere.
Creating your transformation implementation should involve:
- Identifying process efficiency gaps across the entire enterprise to ensure complete visibility.
- Getting buy-in early and often through education on the benefits of digital transformation.
- Creating a Center of Excellence (COE) to establish governance, stability, and communication.
- Shifting the company culture to one of innovation.
Get more tips on kick-starting digital transformation by viewing our “Kicking Off Your Digital Transformation Journey” infographic.
The Energy Industry Needs Digital Transformation to Survive
Without digital transformation, the energy industry will lag and be unable to meet the goals of ensuring reliable energy production, improving safety, modernizing grids, and keeping workers safe. It is imperative for energy companies to commit to digital transformation.
Get insights into how to do this effectively by watching the on-demand webinar “Achieving Digital Transformation with Intelligent Automation.”