Change for Good: The Energy Transition

Oil and gas companies across the board are transitioning to cleaner and more sustainable energy. Larry Fink, founder and CEO of BlackRock, the world’s biggest asset management fund with more than $7 trillion under management, said, “Climate change [has] become the defining factor in companies’ long-term prospects.”

This also represents massive opportunity for those in the energy sector.

As Bernard Looney of bp stated in a recent Fortune article, “Trillions of dollars will be spent rewiring and replumbing the world's energy system. That presents an enormous opportunity for a company of our skills.”

In my last blog I talked about essential complexity and accidental complexity. I discussed how companies needed to integrate, simplify and speed-up in areas like IT so that they can better manage the essential complexity of the business. Similarly, companies need to differentiate between the types of change they are experiencing.

I am probably over simplifying, but I break it down into four fundamental types of change:
 

• Unavoidable change – the pandemic made it necessary to work from home wherever possible, with restrictions on movement and travel. Change such as this has had a profound impact on the way we do business and has accelerated many digital developments.
• Strategic change – by transitioning from being Oil & Gas companies towards becoming "integrated energy companies,” you are implementing strategic change. This requires leadership and commitment and is to be applauded because strategic change is incredibly hard, but has the potential for massive rewards when done correctly.
• Operational change – needed in order to support strategic change, from organisation structure (removing the upstream and downstream silos is a clear example) to IT, operations must evolve to support the new business goals and model. For me it is pretty clear that any operational changes should enable strategic change, align to the corporate goals and support real business results.
• Superficial change – change for the sake of it. While the previous three types are changes for good and well documented, this type is less explored. Unfortunately, it is just as prevalent across industries.

What is superficial change?

If the change you are making does not significantly impact the business or strategy, is not extensive or important in the grand scheme, then that change is superficial. Many traditional IT departments, for example, have been guilty of implementing change for change sake. They embrace the latest fad or trend without fully understanding the impact or business outcome.

One key thing to note is that superficial change does not necessarily mean a superficial or insignificant cost! I know of an IT department that spent over $200 million to migrate a fully operational data analytics system to Hadoop, only to never deliver. That could charitably be described as implementing superficial change. No doubt the business users within that customer would have used much stronger words on wasting $200 million, and question who should be making the decision on such infrastructure changes; IT or the business that is affected? Who owns that decision?

A more recent phenomenon has been the migration to cloud. Don't get me wrong, there are many good reasons to move applications and analytics to the cloud. The problem is that some people see moving to the cloud as the big change, when in reality it is a change enabler. Cloud migration can, when done properly, support the operational, strategic and unavoidable changes that are essential. But it can also add complexity, cost and delay, if not handled carefully.

A third example, and one that I recently experienced first-hand, is the business that wants shiny, cool new reports and dashboards. The kind that look brilliant when demonstrated by the sales rep, but don’t really do much beyond looking nice. The feeds, timeliness and even quality of data don’t meet the business needs to make better and faster decisions. It’s all so superficial.

The reality is that below the surface is where the real value, and the real hard work, can be found: the data management, real time data feeds, connections between datasets, integration and metadata, plus the governance and ownership that goes along with it. This is the stuff that matters. The integration, simplification and speed that will deliver real change is all below the surface. This is where forward-looking IT departments focus their energies and skills, enabling the business to drive positive operational change.

Over the coming weeks I am going to use this series of articles to explore the themes of change, simplification, integration and speed, and explore in greater detail the ways Teradata supports real, positive operational change and results in the Energy sector. We help companies avoid superficial change, and I’m going to show you how. In the meantime, please get in touch with me to learn more immediately.