As the global enterprise environment continues to be disrupted by major market uncertainty, business agility is now very much a prerequisite to longevity and operational resilience, particularly within the field of Energy and Utilities. The Oxford dictionary defines agility as the ability to move quickly and easily toward a goal or purpose. Business agility, therefore, captures the ease with which organizations can strategically channel their resources to navigate the desired growth trajectory.
In recent years, Energy and Utility companies across the industry spectrum have been forced to undergo an unprecedented and deep phase of operational transformation, with the Net Zero imperative serving as the driving impetus. Following the stark findings from the most recent IPCC climate report, the sustainability imperative has rapidly ascended the list of business priorities, as underlined by results from Trissential’s Business Transformation Index 2022 report. Our research found that 45% of Energy and Utility companies plan to spend over 10% of their technology budget on making their IT infrastructure and services more environmentally sustainable in the next 12 months. Additionally, 45% of Energy and Utility businesses will use digital transformation to become more environmentally responsible, demonstrating a high-level appreciation for the role of technological innovation as part of a nuanced and far-reaching sustainability agenda.
The pronounced focus on sustainability has compelled organizations up and down the value chain to fundamentally restructure their business models, expedite product releases, and harness technology in new and profound ways. Notably, our BTI research found that 57% of Energy and Utility companies plan to use digital transformation as a means of reimagining their business model and ways of working. With regard to these ambitions, there is one universal truth: legacy processes are too slow to enable a smooth and timely transition. In fact, our BTI 2022 report found that 42% of Energy and Utility companies acknowledged that core/legacy systems and infrastructure not being upgraded were their main challenge to digital transformation.
Irrespective of the preparedness of industry participants, change is coming to the Energy and Utilities sector. In the field of Oil and Gas, this is referred to as the energy transition. In power, the transition is towards the smart grid, while in water, the transition is towards air-tight resource management. The same existential threat extends to a wide variety of industry players, and this is what’s informing their transformation agenda. In power distribution, the manner in which energy is being produced and consumed is changing rapidly, due, in part, to the increased use of renewables and electric vehicles. These developments have caused a tectonic shift in the technology landscape that underpins the power grid, precipitating the move to the smart grid. Within the Oil and Gas space, there is an ongoing transition away from hydrocarbons and requisite adjustments are being made to business models.
Due to the increasingly delicate and fragile global water supply, water companies have to be meticulous in their measurement and management of water and scrupulous in dealing with water leaks. All of that requires faster decision-making, more efficient ways of working, and innovative technology deployments. Quite simply, it requires a high degree of business agility. Recognizing the role of people in this effort is of paramount importance.
Energy and Utility firms have typically focused their recruitment efforts on niche types of engineers, and may face difficulty in sourcing people with the right technological acumen and forward-looking mindset to drive digital transformation forward. From Trissential’s BTI 2022 report, 46% of Energy and Utility firms acknowledged that they had the most difficulty recruiting Operational technology (OT) specialists. This is not to say it can’t be done, but merely the recruitment strategy will need to be broadened to accommodate bold new visions. When it comes to attracting and retaining top talent, decisive action on the environmental front is a must. The importance of climate action has permeated mainstream consciousness like never before, and a new breed of environmentally-conscious professionals will be grading organizations on their sustainability credentials before deciding to come aboard.
While fresh thinking is of critical importance, equally, the expertise needed to run these types of Energy and Utility businesses requires years of experience and comes at a high premium. The expertise that is baked into these companies is hard to find, but it can often come with a less contemporary way of looking at the world. So, a hybrid of experienced leadership and technological expertise is the most desirable setup to unlock business agility.
By prioritizing business agility, organizations will be forced to think outside the box with their recruitment, processes, and technology deployments, which, when combined, can serve up a whole plethora of interesting avenues of pursuit, driving profitability and diversifying product suites.
This post first appeared on the Expleo blog here.