Energy companies’ digital transformation efforts driven by the need for closer integration and collaboration

IFS, the global cloud enterprise software company, has commissioned a new study of over 600 decision makers from major energy companies in France, Australia, Japan, Nordics, US, UK and in the Middle East. The intention was to find out where companies in the sector are in their digital transformation journey and what is holding them back.

More than three in 10 (31%) oil, gas and utility organizations globally cite tighter integration and collaboration across functions as the top two drivers of enterprise software systems adoption, while 30 % refer to better project management, 29% to improved resource lifecycle management and 29% improvement in operational efficiency.

These were among the highlights of a new study commissioned by the IFS, interviewing more than 600 senior decision-makers from major energy companies in France, Australia, Japan, the Nordics, the United States, in the UK and the Middle East. The research also found that 44% of organizations with sustainability goals want to invest in more energy-efficient assets and infrastructure to achieve those goals.

Barriers to change

Despite these key drivers, significant barriers to technology adoption remain, particularly around the inability to define and measure the ROI of enterprise software systems such as EAM and ERP. Nearly three in ten say the biggest barrier to adoption is the inability to accurately measure the value of investment during the digital transformation journey, while a fifth (20%) say it this is the main obstacle to digital transformation as a whole.

Organizations need – and want – more clarity and certainty about what these solutions will deliver. A large proportion (79%) say it is important that business software has the built-in ability to define and measure critical KPIs. Respondents want KPIs on improving resource utilization (34%), extending asset life (30%) and increasing asset reliability (28%).

The survey also highlighted several other major barriers to the adoption of enterprise software systems in the energy industry. Some (26%) pointed to a lack of clarity around the resources and skills needed, and 19% say a poor business case makes adoption costly. Other reasons include a lack of consensus on priorities within their leadership team – cited by almost a quarter (24%).

Where are companies on the path to digital transformation?

Only 17% of companies surveyed say they have completed their digital transformation journey. Organizations have varied approaches: 65% tackle it one function at a time, and 18% in total start with an asset management solution.

Adoption of advanced asset management solutions

More than a third of organizations (37%) list asset management strategies among the outcomes of digital transformation that will have the biggest impact on their business – and 74% say it’s important that an advanced asset management offers them improved maintenance, moving from planning to predictive maintenance of assets, for example. Given the current pressures on the energy industry, tools that help maximize uptime and improve efficiency through improved asset management are essential.

When respondents were asked to think about what they wanted from an asset management solution, improving maintenance is followed in order of importance by planning and dispatching (71%), improved supply chain management and reduced inventory costs (70%), mobility (69%). and support for compatible units (69%).

From a digital transformation perspective, 38% consider sustainable energy to have the biggest impact on their business, followed by new business models and asset management strategy (37% each).

Emerging technologies in the spotlight

There is also a strong demand for emerging and innovative technologies in the energy sector. A large proportion (72%) stress the importance of data analysis; 70% refer to virtual assistants and 69% to the Internet of Things (IoT). Currently, respondents (primarily those in utilities) are more likely to say their primary goal for emerging technologies is to improve the customer experience (20%). Nearly three in 10 utilities (29%) are in the design stage of customer experience automation, followed by more than a quarter (26%) who have already automated and see the value in it.

“The research revealed how companies in the energy and utilities sector are being held back from moving forward with digital transformation due to their inability to define and measure how they will achieve return on investment. enterprise software,” said Carol Johnston, vice president of energy, utilities and resources, IFS. . “Companies in the energy sector are often very risk averse and frequently deal with regulators and other stakeholders who demand proof of return on investment. The inability to put a quantifiable number on what they will get for their expenses and when therefore prevents them from progressing.

“These are hurdles that more advanced software vendors are overcoming, especially through composable platforms that help them progressively solve their core problems and create measurable ROI over time. Due to the economic and social pressures the industry is under, doing nothing is not an option. The good news is that an ever-increasing number of organizations understand this today.

Research shows that 57% of oil, gas and utility companies with digital transformation plans are looking for a composable platform to support the entire journey, while only 38% take the niche solutions route .

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