The recent McKinsey article on Digital Transformation in Energy triggers a journey down memory lane.
opening statement “For energy companies, achieving value from digital technologies has become the great white whale: anxiously hunted, dimly perceived, enormous, and elusive” is spot on. The imperative is clear, the vision is set – but the DOING part seems patchy at best.
To meet the energy transition needs, digitalisation is not a bystander. It is mainstream. Energy companies have admirable ambitions, and yet the challenges seem too familiar. From my little corner, I did see lessons being learned and many very clever people in the industry know what needs to be done. The difficult barriers highlighted – some are not unique to the industry but some are definitely more prominent e.g. difficult operations due to physical constraints and health and safety risks. Many times, they are the show stopper.
But that doesn’t mean the companies should give up. On the contrary, this is the time to embrace persistence because there is no turning back. In the article, McKinsey outlines a digital transformation framework that is fairly logical. But the devil is in the details and this case, even more so in terms of the culture and capabilities maturity. It will be quite a learning curve for many and will take some time/effort transforming the organisation to alter the corporate DNA (more agile, more balanced risk appetite).
I really like the end-to-end workflow definition and transformation outlined here. The concept is not new per se, but it definitely is more compelling in today’s setting as we all embrace disruptions after disruptions in a relatively short time. As we become more connected, many value chains are being transformed – we will see new value drivers and new ecosystems always on the brink of transformation.
In summary, I believe digital transformation will happen in the Energy sector – it’s only a matter of ensuring that it happens at the opportune time to realise the most benefit. And more importantly, to be ready to meet the world’s energy needs in the most sustainable manner possible!
From Woon-Hui’s desk…