Energy Industry: Riddled with Challenges, Ripe for Transformation

All industries are experiencing disruption in today’s environment, but few are experiencing it to the degree the energy industry is, especially those in the electricity sector. The industry faces government regulations, security threats, demographic shifts, storage limitations, consumer demands, technological changes, shifts in public perception and supply chain transformations, just to name a few. At first glance, one might feel overwhelmed at the task at hand, adapting to the changes currently bombarding the industry, while simultaneously anticipating future opportunities so not to be disrupted by change but rather help drive it!

I would suggest companies anticipating these disruptive threats flip them into opportunities, and I find myself helping decision makers navigate these eerie waters more and more often these days. So, today I would like to share some of those insights. Analysis of the landscape, focus on the areas with greatest impact and development of a quick but nimble plan are usually good starting points.

First, we must analyze the situation to identify the most immediate and significant threat to our business. Across industries, I often see that to be growing cybersecurity threats. The energy industry is no exception to this observation. Protecting the physical security of the grid, the employees helping to keep it running, the customers it serves and the immense amount of data related to it should be top of every company’s mind these days.

HORNE Cyber has a dedicated team focused on helping our clients not only defend themselves against these threats but also to deploy an offensive approach to protect themselves from future threats. In addition to energy company’s massive power plants, corporate offices and substations scattered throughout its territories, cyber threats should be addressed by securing smaller potential points of entry sometimes overlooked, such as the thousands of meters and hundreds of mobile devices connected to their networks. If you are unsure of your risks or haven’t yet made it a focus of your company, I would strongly suggest a conversation with one of our experts.

Once a plan of action is in place for any immediate threats, the next step is looking to the future. Solutions to several of the disruptions might even be addressed by focusing our efforts on the root cause. Think about demographic shifts, consumer demands, public perceptions and supply chain transformations. Many disruptions coming from these examples might be minimized, if not solved, by focusing our efforts on technological changes that could help us operate leaner and greener and better position ourselves to more easily adaptive.

By embracing these changes, anticipating future needs and putting plans into motion we might position ourselves to drive what consumers want rather than reacting to what they tell us.  For example, did you call Apple to request they implement Siri or integrate functionality of your iPod with your iPhone?

Of course not. Apple was forward thinking and anticipated our future needs to transform their products. Another example might be related to the storage limitations and supply chain transformations, case in point. Uber was created to solve a perceived problem. It didn’t eliminate the need for on-demand transportation, but rather created a more nimble platform in which it is stored and supplied to the consumer. Would it be possible to apply a similar train of thought to solving storage limitations or positioning ourselves in the best possible manner to maximize opportunities created with supply chain transformations? Things such as cloud computing, blockchain technology and virtualization of labor resources applied to energy industry needs might be things to consider. 

Whether technologies, such as blockchain, will ultimately work for the energy industry is yet to be seen. However, it is not the only emerging technology on the horizon, and it’s important to remember that when companies refuse to be adaptive in industries that have been disrupted by new technologies, they often put themselves at risk. Just consider newspapers, film manufacturers, travel agents and chain bookstores. They have all seen their influence wane and their business models dramatically altered, and they are not alone. The energy industry is certainly not immune to disruption and change. Keeping an eye on emerging technologies is a proactive plan for shaping the future rather than being shaped by it.

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