The worldwide oil and gas industry continues to face volatility from macroeconomic, geopolitical, and ecological pressures. Oil and gas companies have had to transform themselves into more agile and flexible organizations. Digital technology has enabled a path to digital transformation (DX) that companies are using to build flexible and adaptable organizations that can predict and rapidly respond to shifts in commodity prices. The larger, traditional oil and gas companies are also under threat from smaller start-ups with private investment funding that are using digital technologies like cloud, mobility, big data, and Internet of Things (IoT) to scale rapidly to market demands.
Technology is changing the concept of work as we know it and the technological advances anticipated over the next several years will dramatically continue to do so. This evolution is expected to have a substantial impact on an organization’s work culture, work space and workforce. Specifically, each of these organizational pillars is influenced in the following manner:
Providing a differentiated customer experience is becoming more difficult for brands. Yes, customers are integrating more technology into their lives that results in more channels engage with and more data for the brand, it also makes it more difficult to provide a consistent experience across those channels to effectively and contextually target those customers with the right experience without more technology. It is becoming a never-ending cycle.
Utilities are facing challenges in their transformation journey. They need to overcome siloed initiatives by integrating and orchestrating change across the organization. They need to strengthen weak road maps, which are responsible for the transformation deadlock. They must close their talent gap and overcome their inability to scale up innovation. Finally, they need to introduce new sets of key performance indicators (KPIs). This journey is neither easy nor painless, but if they will do it right, they will deliver value to customers, employees, shareholders, and society.
This year, 2018, has been the year that digital transformation (DX) became mainstream in the mining sector. The challenge now for technology leadership across IT and operations within mining companies is delivering a return on the initial investments and then being able to make the case for the ongoing change that will be required across technologies, people, and processes to continue to reap the value that these expanded capabilities offer to leverage data further. The opportunity is to move beyond optimising the current operating model and operational siloes and focus on an integrated value chain within an open ecosystem.
With direct digital transformation (DX) investment spending of $5.9 trillion over the years 2018 to 2021, this topic continues to be a central area of business leadership thinking.
IDC’s 2019 DX predictions represent our perspective on the major transformation trends we expect to see over the next five years — based on our almost 800 business use cases spanning 16 industries and 8 functional areas, our DX spending guides showing where industry is both prioritizing digital investments, and where we expect to see the largest growth in 3rd Platform and innovation accelerator technologies.
As industries — and the global economy — rapidly realign and consolidate around digital innovation, CXOs must race to reinvent their organizations for the fast-paced multiplied innovation world. This means reinventing IT around a distributed cloud infrastructure, public cloud software stacks, agile and cloud-native app development and deployment, AI as the new user interface, and new, pervasive approaches to security and trust at scale.
At a closed-door industry event I attended recently, even as an analyst working in the mining sector, I was taken aback by the pace of change the industry is experiencing right now. One of the striking things about the conversations that took place was how digital – particularly enabling platforms, digital twins, and integration – has become embedded in the transformation companies are on, and the role that digital led innovation is playing. The sector has a long way to go, but acceleration is really happening. The mining industry is on the move.
The intersection of Blockchain and the energy industry looks like a great place to be today. A technology that promises to bring order and automation in a distributed world could be the perfect match for a system (the energy system) and an industry (utilities) that are slowly but relentlessly decentralizing. Almost like a marriage made in heaven.
PJM’s “pay for performance” Reliability Pricing Model (RPM) capacity market is expected to drive operational excellence from traditional fossil fuel generators. FERC’s Order 745 being upheld in the courts earlier this year and puts the demand response (DR) at the forefront of capacity market model changes. FERC 745 will provide demand response participants the opportunity to participate in capacity markets and receive capacity payments on an equal level playing field with generators. This ruling should have some independent power producers and traditional utility generators concerned.