The world is at a crossroad today: the COVID-19 pandemic and the resultant economic impact is testing the ambitions of organisations across the globe. Is it now a choice between rebounding to Growth or continuing to build for Sustainability? It is amidst this uncertainty that we see Digital adoption increasing and leaders keenly focusing on Digital transformation of their business towards achieving sustainable growth.
The energy industry has already had its fair share of disruptions in 2020 – starting with major drop in demand during lockdown in early days of pandemic, historically low (and yes negative too) oil prices mid-year resulting from over-supply in international markets and OPEC turbulence and supertanker ships serving as floating storage in the middle of the sea! Even now the slow pickup in demand due to subdued economic activity is affecting oil companies. While the electricity sector has seen better demand recovery, the dip in revenue collections has impacted many energy companies. Though demand is expected to pick up over time, the financial impact means that investments in new & renewable energy will see a lag and impact the Energy Transition and a ‘Net Zero’ future.
The silver lining in this gloom & doom is that the energy industry which was already undertaking a digital make-over is now enhancing digital innovations to not only resolve current problems but also upgrade capabilities and build future resilience. Energy sector is increasingly leveraging key digital platforms to respond-react-recover-reemerge by focusing on key business areas like:
- Building responsive and resilient Supply Chains with integrated planning, improved forecasting, end-to-end visibility & real time decision making and automated operations across the value chain
- Enhanced Customer Experience enhancement with digital omni-channels, tailored products & service offerings and customer behavior analytics
- Workforce Enablement with the use of smart tools to improve work efficiency, productivity, workplace safety and sustainable environs
- Working Capital Management with end-to-end visibility of cash positions, hedge management, spend analytics, predictive modeling and insights on financial actions.
- Capital Spend optimisation by analytics-based allocation of capex, data-driven project planning and execution, and technology enablement for divestment decisions & impact investments
- Enterprise Risk Management via digital workflows & intelligent automation for improved visibility of operational decision making and long-term sustainability measures
- Integrated & Secure Enterprise Platforms and Ecosystems across information technology (IT) and operational technology (OT) integration, Asset cybersecurity and cross-platform interoperability
There are many examples of the above, with leading energy organisations having setup Digital Command and Control Centers that empower them with end-to-end value chain visibility across dashboards, processing data points across different companies & divisions and allowing for integrated production planning & optimisation leading to cost savings. Others have computer-vision & ML analytics based near real-time safety & security monitoring and alerts at retail pumps toward achieving ‘Goal Zero’ for safety & sustainability, as well as in-house innovation and pilots through Digital Garage. Closer home, Indian energy companies have started to deploy digital technologies across different facets of their business over last few years – e.g., leveraging RPA for 8+ core process flows to save around 50-75 per cent of processing time and establishing future-ready & agile demand forecasting solution (especially in times of COVID-19 with demand volatility) across multiple fuel products leading up to 5-10 per cent improvement in accuracy and significant returns.
As the above instances indicate, embracing Digital Technologies will not only be an important tool to ride the present wave of disruption but will subsequently power successful transition towards the Net-Zero future. Decarbonisation will require organisations to achieve efficiencies of the highest scale, optimise end-to-end value chains, adopt and integrate greener technologies, enhance monitoring and control over operations, and be cognizant of the carbon footprint of their employees, stakeholders and partners – digital will be a key means to optimise, identify improvements & game-changers and track for decarbonisation.
So, we believe, the COVID-19 pandemic and associated challenges can actually be viewed as an excellent opportunity for organisations, especially those in the energy industry to charter a path forward to an efficient and net-zero future and accelerate on the Digital Autobahn.
(A version of the article appeared in The Economic Times -Energyworld.com on 5 November 2020)