Digital Transformation in Energy: Driving Profitability and Future Cost Saving

Digital transformation is critical for business viability across nearly every industry, and those in the energy sector are no exception. At its core, digital transformation is the ongoing process of integrating digital technologies into every part of the business—from customer success, to sales, to marketing, to operations, to the field workforce, and beyond—to drive efficiency and profitability. 

Many organizations in the energy industry have already embarked upon their transformation journeys, but they often struggle to get it right. They face 100-year-old infrastructure, which was implemented long before the bits and bytes of today’s modern solutions. It’s increasingly unreliable and environmentally unsound, and is even more difficult to manage as the aging workforce takes with them their skills and knowledge upon retirement. 

Outdated, large-scale infrastructure can be time-consuming and costly to replace, so many utilities companies have been hesitant to adapt. But in order to remain competitive, they must find ways to overcome the challenges with which they contend: And a strong digital transformation strategy backed by smart digital solutions can help. The right approach drives operational success and equips businesses to compete in a now digital-first society. Strategic use of digital software can help organizations increase profit margins, solidify their customer relationships, and stay ahead of the curve.

Here, we’ll take a close look at the digital transformation challenges that plague businesses in today’s energy sector, 4 key aspects to consider, and some sophisticated strategies to ensure success.

Challenges the Energy Industry Faces in the Digital Age 

Operations teams in the energy industry strive to become transformational, but they often fall short of their own expectations. This is due, in large part, to some common obstacles they face, including: 

• Strict regulations – Companies in the energy sector must comply with regional regulations regarding land and water usage; federal regulations around operations;  and international regulations surrounding trade. This typically makes them hesitant and fearful to drive change that may result in potential scrutiny or sanctions. While they may have certain transformation initiatives in mind, they also must constantly consider how any new digital solutions might impact their ability to uphold these strict regulations. And as hacking and DNS attacks escalate, they’re forced to evaluate digital solutions with an even more careful eye, making them even slower to transform. 

• Health and safety risks – As is the case in many industries, utilities companies must prioritize the health and safety of both their field technicians and their consumers. Pipeline explosions, oil spills, and other incidents can be deadly, and avoiding these issues requires highly-detailed processes and checklists. Health and safety risks are another enormous factor for consideration when adopting new processes and tools, and some companies are hesitant (or slow) to take on the required time and budgetary costs of getting it right. 

• Unreliable scheduling practices – Digital transformation is all about reducing costs, improving productivity, and providing a great customer experience, but many energy companies neglect the one unique operational activity that is such a huge part of this puzzle: Scheduling. Reliable scheduling is absolutely critical to digital maturity, and traditional, manual tools and processes (like spreadsheets, whiteboards, online calendars, emails, etc.) just won’t cut it. These methods lead to a complete lack of transparency into workforce operations, including worker availability, customer demand, and scheduling trends (e.g. busy times, lulls in demand, and delays) over time. Unforeseen scheduling changes throw a serious wrench in productivity and efficiency and result in mistakes that impact the customer experience. Plus, it’s difficult to ensure compliance with scheduling regulations—like fair scheduling laws—if you don’t have a practice that supports stable, predictable schedules. 

• Lack of integration across systems – While tool integration alone is not enough to drive a viable digital transformation initiative, it’s certainly an essential factor. Workers need quick, easy access to training resources, policy documents, broader company news, job histories, customer information, and more. In their attempts to rapidly become digitally mature, many companies have adopted a variety of shiny new tools to support their workforce. But if these tools aren’t connected, they lead to data silos that force workers to waste precious time hunting down their most crucial information. Adopting a truly digital approach requires integration across all of the business’s critical systems, so everyone has access to a single, centralized source of truth. 

• Old Infrastructure – Capturing knowledge from an aging workforce is difficult and often leads to brain drain, especially if you don’t have digital systems that can encapsulate that knowledge and experience. That loss of skills in older technology presents further challenges in a company’s application of resources, equipment monitoring and prediction, and allocation and optimization of technicians. One way to combat this knowledge loss is to invest in an upgraded supervisory control and data acquisition (SCADA) system or to retrofit to the majority asset base. But organizations struggle to justify these investments because most of the energy industry’s decisions are planned 30+ years out. A substation renewal program, for instance, may take 20 years or more, at which time updated technology can be introduced. While retrofitting and an upgraded SCADA are certainly possible, it’s a costly, time-consuming change that may not be worth it for every company. 

4 Key Areas of Digital Transformation in Energy Sector 

While each utilities company varies in size, objectives, use case, and more, there are 4 common areas to consider as they strive to digitally transform:

1. Operational optimization – Modernizing infrastructure is key to improving efficiency, productivity, and overall business outcomes. Outdated processes and tools in every area of the business create workflow gaps that inhibit operations. Companies need strong, connected digital tools that streamline processes and eliminate silos to help the business run like a well-oiled machine.
2. Employee empowerment – Employees resist adopting new processes and technologies for a variety of reasons, but successful digital transformation relies on their buy-in. Nearly every modern worker has been forced at one time or another to use lackluster, finicky, or frustrating  tools that actually hinder their productivity, so it’s crucial to empower them with technologies that make their jobs easier, not harder. They need user-friendly tools and adequate training materials that enable them to get more done and encourage engagement. Organizations should take the time to identify employee-first solutions, then communicate how those new tools and processes impact both their daily operations and broader business goals to ensure everyone is on board. After all, companies with greater employee engagement are 21% more profitable than their peers, so prioritizing the impact of your transformation strategy on your individual workers is absolutely vital to your success.
3. Customer engagement – In order to maintain their competitive edge, companies in the energy sector must find ways to meet ever-increasing customer expectations. Consistent delivery of timely and reliable service requires full workforce visibility, sophisticated tools that support both back-office and field workers, a real-time, centralized system of record, and the ability to get the right person to the right job every time. As organizations evaluate potential digital solutions, they need to consider how they impact their workflows, operations, and—perhaps most importantly—their customers. A strong transformation strategy rooted in robust technology can help utilities companies deliver exceptional customer experiences at every turn.
4. Product innovation – Advanced technologies are rapidly enabling companies in the energy sector to discover opportunities for growth and innovation. In this particular industry, many digital transformations happen in the operations area, with smart meters and equipment sensors, and IoT and machine learning for predictive maintenance—all of which help businesses identify ways to lower maintenance costs. Improvements in outage management solutions have also enabled better fault finding and routing and data visibility that can better inform and serve customers. 

These technologies (and the innovative capabilities they promise) don’t come without their own challenges, though, as most require a significant investment. That’s why it’s crucial for organizations to use the data they have to determine how they can best address changes across the energy sector. Instead of adopting every new technology that comes along, they should invest in solutions that help them understand their current workforce and customer demand, as well as where they’re succeeding and falling short. Armed with this information, they can make process, product, and service delivery improvements that boost their business value. 

Digital Transformation Strategies for The Energy Workforce

Whether your energy company is just starting out on its digital transformation journey or is looking to optimize its approach, there are several strategies that can help you better ensure success:

Use automated field service management (FSM) software

While manual processes and tools fail to meet the unique needs of a deskless workforce, automated solutions can eliminate the time-consuming tasks that hinder their productivity and efficiency. Automated FSM software, for example, optimizes the entire field service management process, with intelligent tools for scheduling, job matching, optimized routing, field data collection, and more.

Compared to disjointed tools that may be piecemealed together in an effort to manage your operations, automated technologies streamline your end-to-end processes. They seamlessly integrate with your existing technologies (e.g. ERP, CRM, HR, payroll, etc.) to bring everything together for an exceptional employee and customer experience. They take the guesswork out of scheduling, dispatching, and routing, so last-minute changes don’t disrupt your entire operation. Plus, they instantly match the right person to the right job (based on skill sets, certifications, job histories, location, availability, and more), so you can meet your service-level agreements (SLAs) with ease. 

As you look for a field service management solution, make sure the one you choose can collect data across all of your systems for a completely unified view of your workforce. This will help you better understand in real time what’s happening both in the back-office and the field, so you can make quick, data-driven decisions that improve your operations. 

Optimize maintenance planning and scheduling

Effective maintenance programs rely on two key aspects: Planning and scheduling. Planning is vital for determining what work must be done, what resources and materials are needed, why the job is being performed, and how it’ll be executed. But without a strong scheduling process, even the most well laid out plans are for naught. 

Without optimized maintenance planning and scheduling, businesses must contend with constant break/fix scenarios, which are costly in terms of both time and budget. They struggle to stay on top of maintenance and inspection activities, which leads to larger breakdowns and expensive downtime. 

The field technician workforce needs to be scheduled around multiple types of work, including:

• Capital work, which is planned in advance and typically includes larger, longer jobs (e.g. building a substation) that take months. But field technicians usually work other jobs in tandem with capital projects, so they’re not necessarily always on a single site. Understanding worker availability is crucial here, as planners and schedulers need to know where to use those techs when they’re not on the capital project. 

• Maintenance work, which is dependent upon the asset class and strategy. This type of work is programmed and very predictable (e.g. an oil change every 6 months, condition- or sensor-based tests, and analytics based work). As companies progressively move away from programmed maintenance—although they’re still constrained by old equipment and practices—the scheduling of work becomes more random and complex. The circumstances of each equipment will dictate the work that must be done and when, so the workforce will need to become more agile.

• Ad hoc work, which includes break/fix scenarios, requires workers to be allocated quickly and properly. Businesses with ad hoc work need quick first responders to rapidly visit job sites and determine the necessary restorative work (e.g. number of crews, type of equipment, traffic control, etc.). Then, the scheduling team must juggle the workload in the scheduling system to find the best crews and get them dispatched. 

By optimizing your maintenance planning and scheduling, your company can better maintain assets and perform at an optimal level. With the right solution, your team can gain complete workforce visibility and powerful tools to schedule and dispatch with ease; meaning you can serve more customers per day, better prioritize emergency jobs, and drive customer satisfaction. 

Make sure you find a system that enables in-house information retention too, so as your workforce ages out, your greener employees have everything they need to succeed. Plus, they’ll have access to equipment history and details that help them identify the best course of action for maintenance work. And, what’s more, they’ll have scheduling data at their fingertips to build more effective maintenance plans, ensure proper resource utilization, and eliminate productivity-hindering issues that delay service. 

Match tasks by levels of experience

If your planners and schedulers don’t have instant access to each technician’s experience level, skill sets, certifications, and job histories, they likely spend copious amounts of time creating highly-detailed job plans to ensure each job is completed properly. It’s an inefficient, frustrating, and error-prone approach that can negatively impact both your employees and your customers.

Instead, implement tools that instantly match tasks to the right technicians based on predetermined criteria so no time is wasted. Not only will this take a heavy burden off the shoulders of your planners and schedulers; but it will also help you ensure customers are met with qualified, well-prepared technicians every time. Newer employees won’t be overwhelmed by tasks they’re not able to complete, and veteran workers won’t be matched to tasks that are far beneath their skill levels. Every worker’s skills are put to good use, and the employee and customer experience are improved. 

Fixed scheduling

Most energy companies need to deliver their services both inside and outside of the typical 9-5 work day. There are a variety of schedules that help them do so, but fixed schedules are optimal for this scenario. They allow businesses to set working hours on a daily, weekly, or monthly basis, and their simplistic nature enables the template to be used over and over again. Fixed schedules also help organizations gain total visibility over their resources and labor costs to maximize their cost-effectiveness.

The right scheduling software is crucial, though, since any schedule type is difficult to manage with inadequate tools. Automated scheduling solutions, for instance, use artificial intelligence (AI) to instantly generate schedules that align with key business outcomes. They take into account worker availability, preferences, skill sets, locations, histories, and more, and match the right technician to the right job every time. 

Since proper scheduling is absolutely vital to digital maturity, make sure you use a scheduling tool that helps you get the most out of your workforce. The right technology should reduce manual scheduling tasks, help you shift to a proactive process, reduce administrative costs, and identify areas for even better scheduling. 

Powerful Software to Help you Digitally Transform

Strong digital transformation initiatives are at the forefront of nearly every energy company’s mind. But getting it right requires intelligent solutions that help them overcome the challenges unique to field service work. 

Skedulo’s automated field service management software offers the flexibility required to handle the complexities of managing the energy workforce. With tools for smart ad hoc scheduling, quick allocation, intelligent job matching, optimized routing, seamless field data collection, and more, Skedulo can support your team’s journey to digital transformation. It’s an open, horizontal solution that can easily connect to your existing systems, thus extending your EAM lifecycle while improving the worker experience.

Learn more about how to better equip your team for transformational success, or book a demo today.