How the energy industry is embracing cloud computing
Cloud technology is helping companies in every industry do more with less. In specific industry verticals, the cloud can play a key role in pushing the industry into successful digital integration. The energy sector, which is my company’s expertise, is an example of how the cloud can transform an industry’s operating procedures. Adoption isn’t yet widespread yet, but the industry’s shift to the cloud is picking up speed as we catapult into the next decade.
In energy, legacy systems that rely on human involvement are now being replaced by automated systems that interact seamlessly with cloud platforms. The companies driving this shift report typical improvements (greater efficiencies, lower costs), as well as some benefits that aren’t as applicable to other industries.
Things happen quickly in the cloud, and speed is priceless in this industry. A recent report from Accenture found that energy executives view reduced costs as merely a secondary benefit they mostly want to harness the cloud to speed up operations. In oil and gas, timely data transmission is critical to operators. Cloud technologies allow for the transfer of data at unprecedented speed and scale, whether it comes from field measurement instruments/flow, land titles/contracts, or regulatory documentation.
Cloud technology is also a boon to energy-based accounting departments and CFOs. Energy is one of the most regulated sectors of the economy, which means accounting can get complicated in a hurry. The cloud meets the complex accounting needs of most oil and gas enterprises at a reasonable cost and with a high level of reliability.
When companies can back up data and recover it in the cloud, SOX compliance becomes far more manageable. Even better? Automated cloud-based systems reduce human errors that even the most sophisticated legacy software can’t prevent.
Integrating the cloud with energy companies
Spending on public cloud services is expected to total $277 billion in 2021, according to the International Data Corporation. That charge primarily will be led by professional services, telecommunications, and banking enterprises. Energy companies will also contribute to that number, though not all of them are ready for cloud adoption.
In several cases, we have witnessed organisations rush to join the cloud movement without first developing an adequate plan for adoption that accounts for such a unique environment. This can be a costly mistake these companies often expend resources attempting to transition to services they don’t need or can’t use. Focus on the following three steps when planning your own cloud migration, and you’re much more likely to appreciate the outcome.
Tap into internal expertise
Clients often think they want cloud solutions when they actually need more agility and mobility in their present ERP systems. Some organisations rush to ditch their existing on-premise systems before they have comprehensive digital strategies in place. They quickly realise that cloud solutions aren’t a panacea and can become the opposite when companies aren’t ready for the transition. A botched or painful migration is avoidable if energy leaders take the time beforehand to understand what the technology can and cannot do.
At Enertia Software, we urge operators to get input from experts within their organisations before seriously considering cloud adoption. Talk with internal stakeholders who have a clear understanding of the value of cloud technology and the core business objectives of your organisation.
Don’t overlook integration
Companies don’t do business in a vacuum. Your business probably has processes and systems in place for working with outside partners, and you’ll need to thoroughly evaluate these internal operations as you develop your plan. For example, oil and gas processes in the energy sector are field-intensive and not directly comparable to the outputs of other industries. Cloud integration for an energy company will be a different process than for companies in other industries.
Your organisation’s digital transformation will affect everyone you work with, including vendors, contractors, and other partners. Unless you want to lose them, you’ll need to help them understand how existing workflows will change and how your company will navigate that change.
Ultimately, having a fully integrated single database cloud solution will not only improve efficiencies but also provide meaningful outsourced-IT services, alternative accessibility options, and cost-saving solutions. To capture those benefits without completely overhauling your existing business model, you’ll have to ensure that your partners and their products will be seamlessly integrated into your post-adoption workflows.
Seek out flexibility
When evaluating specific cloud services, don’t forget about the client’s need for flexibility. In our industry, upstream energy companies consistently need flexible implementation solutions that support business expansion, agility, and operational efficiency. This needs goes beyond the energy sector all innovative, solutions-oriented companies need flexibility in their cloud infrastructures. Just as public cloud spending will continue to increase, the global market for true private cloud services will also expand reaching roughly $262.4 billion by 2027, according to Wikibon and there is no shortage of firms that would love to help your organisation with its transformation.
The best partners have more than just technical expertise, of course. They’ll be able to help you turn cloud technology into a competitive advantage and empower you to think more strategically and proactively about how it can be deployed. In the not-too-distant future, nearly every organisation will rely on the cloud in some form or another. The ones that win won’t just evolve their technology they’ll evolve with it.