The need for continuous innovation has become a business imperative in the energy sector due to a range of challenges. The fundamental issue impacting both energy suppliers and consumers is the development of innovative pathways toward the energy transition and meeting net-zero targets. Other factors increasing the urgency of transition are various geopolitical events and economic uncertainties. Energy demands are increasing exponentially each year, and energy suppliers are researching how to mass-produce sustainable energy products. As product research picks up, new entrants in the energy products market are sensing the larger growth opportunities. Faster innovation requires on-demand infrastructure provisioning, industry common data models (CDM), and APIs to build working prototypes of new ideas and then market those prototypes for faster customer/end-user feedback. To meet these innovation needs, industry cloud, which is a layer of CDM and a collection of industry-specific APIs on basic cloud services, is getting more and more popular.
The energy transition, as a major industry goal, involves various initiatives. These include cloud-native development of digital value chains, leveraging industry cloud and exploiting heritage IT to increase reuse and drive efficiencies in the existing infrastructure. Enhancing operational capabilities with an industry-specific solution can enable organizations to gain a range of advantages that result in improved customer experiences and new levels of growth.
The cloud-driven opportunities in reach
At one point in time, cloud platforms were seen solely an IT asset, but today cloud technologies provide a foundation for data-driven market insights, greater business agility, and improved resiliency. As a result, organizations are recognizing that data-driven cloud platforms are vital to achieving business goals. By modernizing cloud infrastructures, energy enterprises can reimagine their service delivery and business models through a series of cloud-based advantages.
Creating digital value chains with data aggregation
Energy transition pathways need new digital value chains, both natively built on cloud and existing value chains transformed to exist on cloud. As an example, let us look at hydrogen as a low carbon fuel. With time, hydrogen is becoming more and more viable, transforming the heavy surface transport sector. The adoption of hydrogen requires new digital value chains in production and retailing, while transportation capabilities will be developed largely by reusing the existing liquified natural gas (LNG) infrastructure, a classic example of repurpose and modernization. Developing new value chains and modernizing the existing ones will require the efficient use of digital technologies, enabled by relevant insights coming from the vast amount of data being generated at every point of the value chains. Cloud solutions, both basic cloud services and industry cloud solutions, can help bring data sitting in silos to a common repository and run analytics on it to extract relevant insights.
Energy teams can then evolve their data operations through greater data access and visibility, allowing them to literally visualize how operations are performing and whether business value is being achieved. Adopting advanced analytics platforms featuring AI/ML capabilities can help optimize service processes, improve productivity, identify new revenue streams, and lower the total cost of ownership (TCO) of a cloud infrastructure. The overall result is a digitized value chain that enhances collaboration among teams, accelerates decision-making, and improves resiliency.
Becoming more customer-focused
Based on the advantages a digital cloud-driven value chain can deliver, energy providers can work toward a constant goal: becoming more customer-centric. Using data effectively is the foundation for achieving it, and once valuable insights have been gathered, organizations can commit to ensuring that the energy products and services they provide are meeting customer needs. This requires a shift from a product-focused mindset to understanding people’s expectations around reliability, costs, and sustainability.
Since the arrival of the pandemic, the importance of personalized engagements has greatly increased, and maintaining customer loyalty is now tied to treating customers as individuals, rather than in monolithic ways. To drive hyper-personalisation, AI/ML-based solutions are available natively on cloud platforms, which can be used to keep customer-centric communications relevant and focused on their needs. As an example, customers can be made aware of their ongoing energy usage and its commercial impact, based on their historical usage and demand curve, so that consumption and costs can be controlled in a more informed manner. Offering these customer-focused services can open new business opportunities and build brand loyalty.
Innovating operations, products, and services
Any kind of stagnation in terms of business strategy or offerings will inevitably lead to falling behind the competition and losing customers. Staying relevant depends on continually innovating energy services and products that provide seamless customers experiences and streamline internal operations. Cloud-enabled research and development efforts are fueling industry transformations, and with the greater customer focus mentioned above, energy providers can devise a game plan for revitalizing services to fit customer expectations.
Cloud technologies are also allowing energy enterprises to improve their compliance initiatives and ensure they’re meeting industry regulations. Monitoring operations, gathering data, and producing compliance reports can be simplified to reduce the time and effort of meeting industry mandates.
Devising an effective cloud transformation strategy
The first step in gaining these cloud-driven advantages requires developing a customized roadmap. A large-scale enhancement should be based on a company-wide commitment with buy-in from all stakeholders and an organizational change management (OCM) plan to help realize business value quickly. To avoid any pitfalls, an organization should have a clearly defined vision for their business transformation and business outcomes, one that can be delivered through a comprehensive cloud transformation project leveraging a data-driven intelligent infrastructure. Creating a series of short- and long-term goals will keep the efforts on track, and a company will need to verify it has the ability to stand up programs to be executed on time in alignment with budgets and business objectives.
An effective way to execute a customized cloud modernization strategy is through a phased approach aligned with a company’s business goals. Partnering with a cloud expert can ensure a transformation initiative achieves the intended results and drives business growth, and selecting a cloud partner should be based on certain fundamental criteria:
Preparing for future opportunities
Companies across the energy sector are facing a defining moment as crucial changes are taking place that require new approaches to staying competitive. With more startups entering the market, disruptions are frequent, forcing established brands to reassess their established approach to product development, innovation, and the monetization of legacy systems, as well as standing up new capabilities using cloud and industry cloud solutions. All the major cloud service providers (CSPs) provide a set of industry cloud solutions based on industry needs, starting with the most important use cases: sustainability and carbon reduction.
The evolution of the energy industry, as it develops new low-carbon energy products, has an impact on all other industries. Given their strategic importance to the overall industrial economy and the need to innovate and build scalable energy products, industry cloud solutions are a game changer for the energy industry. Launching a cloud-driven business modernization can help energy providers prepare for unpredictable economic trends and develop greater agility and an improved ability to innovate. Whether energy firms are just beginning their cloud initiatives or are already seeing a strong ROI, an industry cloud solution will be essential to building native digital value chains, using data more effectively, and driving future growth.