In my last post, “Paralyzed or Catalyzed? Servicing the Energy Transition,” I wrote about a digital divergence within the energy industry that the coronavirus crisis would likely accelerate. Some firms, I argued, would “press pause” on their digital initiatives, while others would continue or even fast-track theirs. And those decisions would have important implications, perhaps not fully recognized, for the competitive position of these companies.

In the months since, we have witnessed this dynamic playing out in our engagements with energy firms. Two of these, which together span the manufacture, service, and operation of gas power and renewable energy assets, were—as of early March—in the midst of major multi-year initiatives to adopt new digital field service and operations and maintenance platforms. Both communicated that these initiatives were viewed by leadership as important to their broader corporate growth, productivity, and innovation objectives.

Then the pandemic hit—and the two companies responded in different ways. One pushed back its schedule, first by a month, and then by another eight to 12 months. The other, meanwhile, pressed on and has maintained its plan with no changes. It is possible that the latter company will go live with its new platform before the former has made a decision.

While one should not exaggerate these divergent responses, they do reflect the varying fates that digital initiatives may encounter during a crisis. Ironically, a company that has experienced disappointing results with prior rollouts may understandably be reluctant to make another investment during a period of heightened attention to near-term financials. However, a notable number of energy companies recognize that their new circumstances offer opportunities to trial or expand deployment of newer innovations that have perhaps been “waiting for their moment.”

Which raises an interesting and important question: is there a “Zoom equivalent” for the energy industry, an innovation whose benefits have been so magnified by COVID-19 that there may be no turning back?

While it is too early to answer this question with full certainty, remote expert assistance and collaboration appear to be one area of innovation that has “found its moment” in energy. GE, for example, recently announced in an earnings update that its Renewable Energy business had, in spite of COVID-19 disruptions, been able to “perform service maintenance remotely using smart-helmets connected with engineers at home.”

Our ISV AR partners’ experience supports the notion that remote collaboration and expert assistance, enabled by augmented reality as well as wearables, are at least having a moment in the energy industry. This reflects, in part, the “safety first” ethos that has long existed at electric utilities. But it also reflects the multifaceted workforce crisis continuing to unfold among utilities that see decades of knowledge retiring in the coming years and recognize the keen need for digital solutions to attract, train, and retain the next generation of (digitally savvy) workers.

Still, the divergence remains. Even prior to the crisis, power and utility companies were actively exploring and adopting secure, real-time communication apps to help with safety alerts, pre-site preparation, and team collaboration. But while collective industry interest has grown noticeably, adoption issues related to company culture and change management have not disappeared. Crisis or not, innovation adoption still requires commitment and buy-in. And even as pilot projects for newer technologies grow, internal organizational changes—not just external factors—are necessary to progress to larger deployments.

Microsoft CEO Satya Nadella has recently argued that “Tech intensity is the key to business reliance. Organizations that build their own digital capability will recover faster and emerge from this crisis stronger.” His words ring especially true for energy as well as for other asset-intensive industries, where the criticality of equipment uptime and the complexity of the service are driving digital innovation—and further exposing the divergence between companies that see their initiative as an imperative, and those that offer reasons for delay which, however sensible they sound, may also leave them behind the curve as the digital transformation of energy accelerates.

 

ABOUT Seth Dunn

Seth DunnSeth Dunn is director of industry development, power & utilities, at ServiceMax. In this role, he is responsible for defining ServiceMax’s value proposition and go-to-market strategy with GE customers across power generation, transmission & distribution, and renewable energy. Seth joined ServiceMax after 12 years with GE’s Renewable Energy business in a variety of commercial, policy, marketing, and product roles. Prior to GE he researched energy and environmental issues for the Worldwatch Institute. He holds BA, MEM and MBA degrees from Yale University.