Oil and Gas
Powering a
Renewable Future
2020 Energy Digital Transformation Survey
A recent survey of C-suite executives at middle market power generation and oil and gas organizations shed light on their digital transformation plans, value drivers and maturity levels. Take a look at the 5 biggest takeaways for…
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Power Generation
Increasing PROTECTIONS
Service Expansion
Fail
Factors
Oil and gas companies are facing several pressures that threaten their businesses’ survival, including low oil prices due to COVID-19, large debt obligations and shifting investor sentiments towards the sector. To navigate these headwinds, oil and gas companies are turning to digital transformation to improve operational efficiencies and lower costs. Going forward, continuing to realize new efficiencies and cut costs will be crucial to survival.
GOING LEAN
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BDO’s 2020 Energy Digital Transformation Survey was conducted by Rabin Research Company, an independent marketing research firm.
Methodology
Executive Titles
Executive Titles
Annual Revenues
Annual Revenues
Annual Revenues
Tech
38%
Non-Tech
62%
Executive Titles
Chief Information Officer or Chief Information Security Officer
21%
Chief Executive Officer
13%
Chief Financial Officer
19%
Chief Operating Officer
13%
Chief Marketing Officer
9%
Chief Technology Officer or Chief Innovation Officer
17%
Line of Business Executive
8%
focus on oil and gas
select a different view
u
say increasing operational efficiencies
is one of their top
short-term business goals (12-18 months)
Improving efficiencies
improving efficiencies
roi from digital transformation
plans moving forward
49%
roi from digital transformation
plans moving forward
improving efficiencies
roi from digital transformation
plans moving forward
say their organization’s digital investments
have increased their profitability in the past
12 months
62%
Increasing operational efficiencies and modernizing IT infrastructure are tied
as their top long-term
business goals
(18 months-3 years)
A plurality of oil and gas executives (30%) say superior technology is their company’s primary differentiator today. As their competitors’ digital initiatives mature, they’ll need to focus on improving other areas of the business if they want to maintain a competitive edge. Additionally, to offset losses due to COVID-19 and other pressures, oil and gas companies will need to explore options to diversify their portfolios.
SERVICE EXPANSION
Upstream
midstream
downstream
Demand forecasting, which
can be shared upstream
Remote monitoring
technology for refineries
Remote monitoring technology for pipelines and transportation
Driverless transport vehicle rentals or leases
Remote monitoring technology for oilfield equipment
Data-driven prospecting
and drilling
Oilfield equipment leasing
Emerging Areas for Service Innovation
Oil and gas companies already had limited resources available due to low oil prices, high debt levels and investor pressure to focus on cashflow, and the COVID-19 crisis is worsening these conditions. Oil majors have slashed budgets to mitigate COVID-19-related losses, and we’re likely to see more companies make cuts or put transformation plans on hold. To maximize digital ROI, oil and gas executives should prioritize their digital initiatives and dedicate resources to the one or two most likely to deliver immediate value.
Fail Factors
Reasons why digital initiatives fail
45%
Lack of leadership
or vision
Lack of skills of insufficient training
Underinvestment
42%
36%
2020 Energy Digital Transformation Survey
Powering a
Renewable Future
In response to changing consumer attitudes towards energy consumption...
36% are integrating new energy sources
34% are transitioning away from certain energy sources
Top Focus Areas for Improving Customer Service
47%
51%
43%
Consistency
Speed
Quality
Catalyzed by changing investor and consumer attitudes towards energy consumption and
evolving global energy policies, savvy oil and gas executives are thinking big to build a more sustainable planet and diversify their portfolios as oil prices are likely to stay low for
the foreseeable future. They’re prioritizing investments in the areas most critical for renewables
to succeed.
GOING GREEN
Going Lean
Going Green
The integration of new cyber-physical systems creates more potential access points for bad actors, which has led to an entirely new set of security risks throughout the oil and gas supply chain. The COVID-19 crisis has led to an uptick in cyberattacks specifically targeting remote workers, underscoring the importance of practicing good cyber hygiene.
INCREASING PROTECTIONS
19% say cybersecurity concerns are their biggest challenge
to starting a new
digital initiative
53% plan to bolster cybersecurity in the next 12-18 months
23% say cyberattacks or privacy breaches are the greatest digital threat to their business
of CFOs planned to pursue product or service expansion this year (before COVID-19)
36%
34%
say increased market differentiation is a short-term goal
45%
say diversifying revenues is a short-term goal for their digital transformation strategy
$751 Million to just under $1 Billion
25%
$1 Billion to just under $2 Billion
36%
$2 Billion to $3 Billion
9%
$501 Million to $750 Million
21%
$250 Million to $500 Million
9%
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General
Financial Services
Healthcare
Retail
Technology
Industry 4.0
* This survey was conducted in late 2019, prior to the global COVID-19 pandemic.
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View the methodology
focus on power generation
select a different view
u
Service Expansion
Increasing PROTECTIONS
Going Green
Going Lean
Catalyzed by changing investor and consumer attitudes towards energy consumption and evolving global energy policies, power generation executives are thinking big to work towards a more sustainable future. To accomplish this, they are prioritizing investments in the areas most critical for renewables to succeed—namely, in pricing, speed and reliability.
GOING GREEN
Top Focus Areas for Improving Customer Service
62%
51%
43%
Consistency
Speed
Quality
The integration of new cyber-physical systems creates more potential access points for bad actors, which has led to an entirely new set of security risks throughout the energy supply chain. The threat is very real: state-sponsored threat agents have previously targeted the U.S. power grid, and there has been a recent uptick in such cyberattacks amid COVID-19.
INCREASING PROTECTIONS
40% of power gen execs say cyberattacks or privacy breaches are the greatest digital threat to their business
66% plan to bolster cybersecurity in the next 12-18 months
21% say cybersecurity concerns are their biggest challenge
to starting a new
digital initiative
Differentiation is key to retaining customers and winning market share in the COVID-19 environment and the economic downturn expected to follow. Additionally, power generation companies that can continue innovating during the COVID-19 crisis and subsequent economic fallout will be better positioned to come out ahead when the economy reenters growth mode.
SERVICE EXPANSION
of CFOs planned to pursue product or service expansion this year (before COVID-19)
58%
say diversifying revenues is a top short-term goal
49%
53%
say increased market differentiation is a top short-term goal
Emerging Areas for Service Innovation
Direct-to-consumer offerings
Remote monitoring technology
for grid infrastructure
Energy efficient equipment
for home or business use
Onsite power generation
Leasable energy storage
Digital energy dispatch services
The COVID-19 crisis and subsequent economic fallout are likely to hinder power generation companies’ ability to execute on their digital transformation strategies and may force spending cuts that could delay initiatives already underway. To maximize digital ROI, power gen executives should prioritize their digital initiatives and dedicate resources to the one or two most likely to deliver immediate value.
Fail Factors
35%
40%
40%
BDO’s 2020 Energy Digital Transformation Survey was conducted by Rabin Research Company, an independent marketing research firm.
Methodology
Executive Titles
Executive Titles
Annual Revenues
Annual Revenues
Tech
26%
Chief Information
Officer or Chief
Information
Security Officer
15%
Chief Technology Officer or Chief Innovation Officer
11%
Non-Tech
74%
Chief Executive Officer
21%
Chief Financial Officer
17%
Chief Operating Officer
15%
Chief Marketing Officer
15%
Line of
Business Executive
6%
Executive Titles
Fail
Factors
2020 Energy Digital Transformation Survey
Fail Factors
Reasons why digital initiatives fail:
Lack of skills or
insufficient training
Interoperability with legacy technology
Underinvestment
Powering a
Renewable Future
68% are integrating new energy sources
30% are transitioning away from certain energy sources
30% are offering a flexible consumption pricing model
In response to changing consumer attitudes towards energy consumption...
Power generation companies are under pressure from several forces: tariffs, changes in consumption habits and competition from low-priced traditional energy sources—primarily natural gas. The COVID-19 crisis is exacerbating these conditions, causing electrical power demand to drop due to widespread business closures and stay-home orders. To navigate these headwinds, the industry is turning to digital transformation to improve operational efficiencies and lower costs. In the long term, they’re focused on improving market differentiation, which will be crucial to gaining a competitive advantage in the downturn and beyond.
GOING LEAN
plans moving forward
say digital investments
have increased their profitability in the past
12 months
64%
roi from digital transformation
say increasing operational efficiencies
is a top short-term business goal (12-18 months)
60%
Improving efficiencies
plans moving forward
plans moving forward
roi from digital transformation
roi from digital transformation
improving efficiencies
improving efficiencies
say increasing market differentiation is a top long-term business goal (18 months-3 years)
43%
$751 Million to just under $1 Billion
29%
$1 Billion to just under $2 Billion
28%
$2 Billion to $3 Billion
11%
$501 Million to $750 Million
17%
$250 Million to $500 Million
15%
Annual Revenues
Jump to another report
General
Financial Services
Healthcare
Industry 4.0
Retail
Technology
* This survey was conducted in late 2019, prior to the global COVID-19 pandemic.