Digital transformation is taking the world by storm. While companies were adopting digital technologies and developing digital strategies rapidly pre-covid, the digital transformation wave swelled during the pandemic, and continues to grow so as we emerge from covid.
What is Digital Transformation?
What exactly is digital transformation, though? SAP says “Digital transformation happens when organizations embed digital technologies across all their operations. This helps businesses scale and compete by responding to changing markets and better serving their customers.”
Deloitte defines digital transformation as "the essential bridge between today's and tomorrow's business... For every organization, a strategic approach to digital transformation is crucial. Digital possibilities must shape strategy. And technologies and operational decisions need to be adaptive and aligned."
Digital transformation goes beyond simply adopting new technologies ad-hoc. True digital transformation requires a strategic, operational plan for leveraging technologies to drive innovation, business results, and overall business transformation.
Why Digital Transformation is a Key Priority for Leaders
Digital transformation is a top priority for c-level leaders around the world. In a recent survey, Accenture found that "accelerated digital transformation, including cloud and data, has become the number-one topic CEOs prioritize for the board since the pandemic hit."
Time has proven that digital transformation is a key topic for leaders for good reason. Digital transformation leaders grow more quickly than others and unlock increased market capitalization. Accenture found that there are “leaders” and “laggards” in terms of technology and innovation. "Leaders" focus on making smart technology investments – focusing on innovative technology sooner rather than later and reinvesting frequently. In contrast, “laggards” invest in technologies as needed to stay operational.
The performance differences between these two groups are staggering. Pre-pandemic, the research found that leaders were growing 2x faster than laggards. Since then, the gap has increased, with leaders growing at 5x the rate of laggards.
Deloitte recently found that "the right combination of digital transformation actions can unlock as much as USD $1.25 trillion in additional market capitalization across Fortune 500 companies."
There is a clear business case for developing and implementing a digital transformation strategy, no matter your industry. Within the energy industry specifically, digital transformation initiatives are required as utilities, investors, regulators, and other market participants are having to adapt faster than ever to a changing grid. There's never been a better time to ensure your organization is moving forward with digital transformation at speed.
Digital Transformation in the Energy Industry
The energy industry is undergoing significant disruption. Globally, regulators, governments and citizens are prioritizing decarbonization and the energy transition is picking up speed. Alongside that, electrification of everything is driving increased load. Extreme weather events are also occurring more frequently, impacting both energy demand and production. Last year’s Russian invasion of Ukraine further upset the balance with the resulting price volatility and shift in geographic supply and demand of natural gas.
Amidst all this disruption, the industry is still expected to supply a stable, reliable and reasonably affordable supply of energy and electricity. Organizations operating within this environment must develop the capability to innovate at scale, with rapid speed.
Accenture's research above demonstrates that digital transformation allows organizations to excel - even during challenging and disruptive times, like throughout a global pandemic. As disruption across the energy sector continues, digital transformation can provide energy companies with the technical capabilities to innovate, collaborate, scale, and pivot as necessary. These capabilities will allow energy companies to strategically and successfully navigate the industry's challenges.
If your organization has not yet begun its digital transformation journey – it's not too late. Accenture’s most recent research found yet another group called “leapfroggers” who are using second mover advantage to surpass their peers and catch up with the “leaders” in digital transformation and growth. These "leapfroggers" are strengthening their systems by moving to the cloud and flipping their budgets, allocating the majority of their spend towards innovation drivers, and far less to maintenance and operations.
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Energy Exemplar understands the importance of digital transformation for members of our industry. That's why we launch PLEXOS Cloud and continue to invest in and innovate solutions to serve our customers' digital and technological needs. PLEXOS Cloud offers a single, unified system for performing and sharing the increasingly complex studies required to respond to market forces and innovate at scale and speed.