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Digital transformation has started in many business sectors, but the energy and utilities sectors seem to have a wait-and-see approach about this evolution. What is driving digital transformation in the utilities sector and what is holding it back? And how can Barco technology help to facilitate digital transformation in your organization?
According to recent research, 29% of power and utility industry executives think that utilities should focus on digital strategies over the next year. In many industries, digital transformation is already changing how businesses operate. Organizations are increasingly digitizing their workflows and adopting cloud-based services to manage their operations. In the energy and utilities sectors however – where managing mountains of data and documents is critical for continued operations – organizations still find it difficult to reinvent themselves as digital enterprises.
There are several reasons for the slow acceptance of digitization in the utilities sector. Utilities typically have complex legacy operations and IT environments that discourage fast innovation. Managing utilities is all about being stable, reliable and secure. That is why this sector is often cautious about experimenting with innovation and embracing new digital workflows.
And yet, digital transformation will be a prerequisite to remain competitive for utility companies. As renewable energy sources and distributed energy resources (DERs) are gaining in importance, utilities will need to rethink their strategies. With the advent of the smart grid, authorities and power companies want to make smart metering possible, and be able to measure, collect, and analyze energy usage. All of this will require digitization of processes and communications.
But the need for digitization is also driven by the ambition to better serve the demanding and outspoken end customer. Digital technologies can help energy companies to improve interaction with the customer and increase response times in case of incidents.
The risk of cybersecurity vulnerability is also holding the utilities sector back to go all out for digital transformation. Recent cyber-attacks to oil pipeline infrastructure in the US have demonstrated that the utility sector is still a popular target of criminals. For utilities, cyber-threats can have severe implications, including regional or temporary service disruptions and theft of customer information.
Despite changing market conditions, our energy system today still makes use of many legacy systems that were built without any consideration for cybersecurity. These systems now need to interact with the most recent state-of-the-art equipment for automation and control, such as smart meters or connected appliances, and devices from the Internet of Things, without being exposed to cyber-threats
Control rooms have been relatively successful in managing cyber threats, especially because critical operational technology (OT) – such as SCADA systems, PLCs, embedded computing, or other industrial hardware – was completely separated from other IT systems and the internet.
However today, the situation is becoming more complex. IT and OT data are being exchanged more and more. Due to the rise of smart meters and the Industrial Internet of Things, OT has started to use IT networks for communication, and consequently, the border between IT and OT is getting blurred.
As digitization is making its way in the utilities center, new types of control centers are coming into the picture. IT operations centers (ITOC) are established to ensure continuity of business and to make sure that services can be delivered with the expected quality. Joint Information Centers (JIC) are established to be a central point of contact for news media and interest parties and to coordinate incidents more efficiently in real time. Public information officials from all participating federal, state, and local agencies all use the JIC as a platform for collaboration.
These centers use the power of networked visualization and collaboration to monitor the health of operations, manage the exponential growth of information, and respond swiftly to incidents on a 24/7 basis.
Like in many other business sectors, digitization is also driven by a changing workforce. A more diversified staff and newer generations who are taking managing positions are seeing the efficiency and productivity benefits of digitization. They have higher expectations of technology for their working environment, because they are comparing their workspace to their experiences with digital consumer applications and social media, where fluid sharing of visual information has become the norm.
That same consumer experience is now expected in business applications. Just like users of consumer products, newer generations of control room users expect their applications and workspaces to be intuitive and easy to use. Business leaders and control room managers have become aware that a closed, analog environment has its limitations in the complex reality of today, and that digitization can help to improve decision making by making critical information available to key stakeholders at all times.
Compared to other industries and sectors, digital transformation in the utilities and energy sectors may not come as fast, but it is coming. In any case, the promise of digital transformation is huge. From smart grid management, to optimized customer service and faster incident response: digitization will change the way utilities are operating.
Are you looking for a trusted technology partner to digitize your operator workflows? Want to take the first steps towards your digital utility? Contact one of our Barco experts to know more about our networked visualization offering.