A key competitive advantage in the energy sector is managing big data for heightened situational awareness. To do this successfully, organizations should consider cloud technology to handle the process of merging disparate data sources, studying that data using predictive analytics and bringing useful information back full circle to design, operations and maintenance.
Cloud- driving necessary change in energy sector
Utilities have traditionally been slow adopters of emerging technologies, but these organizations must have the capability to regularly monitor and manage their production assets’ performance data and comparative data to succeed in a regulated industry and increasingly competitive market.
Cloud technology has enabled utility organizations to securely compile and continuously update key performance data that spans companies, industries and equipment types at a vastly lowered cost than other tools and manual techniques.
Here are three reasons why cloud is driving transformation in the energy sector and why securing this competitive advantage is crucial for organizations today:
First mover advantage
Globally, utilities’ staff often lack the tools required to view critical data. Few, if any, are able to fully understand the history of assets, strategies to manage those assets or even the current health of an operating asset. Cloud technology improves collaboration, information sharing and efficiency across global workforces. It enables companies to better manage asset data across various facilities worldwide, which drives uniform processes, greater transparency and more strategic decisions from the C-Suite as events are happening on the plant floor in real time.
According to a 2014 report, “How technology is changing industries – energy and utilities”, by Verizon and Harvard Business Review Analytic Services, only 25% of energy and utility organizations have extensively adopted cloud technology. The study further reveals that companies which quickly adopt new technologies and pursue the “first-mover advantage”, perform better than their peers in both revenue growth and market position. Companies who delay or decide against adopting the latest cloud-based information technology available are not only missing an opportunity to reduce cost associated with hardware, software and services, they are also creating significant risks for obsolescence, failure and safety.
The fact is, faster moving competitors will gain an advantage.
Assets that lag in performance cost companies more. Even with advances in the energy sector, it is difficult for equipment owners to target every asset in need of additional maintenance or replacement before the need arises. However, big data analytics and management solutions allow for performance assessment and comparative analysis of all utility assets. The performance of a pump, for example, can now be compared by manufacturer and model across an owner’s individual plant, fleet and the installed base of all owners included in the global database.
The problem for most utility organizations is that detailed comparative analysis has been expensive. Utilities that have fleet assets distributed across large geographic areas have been managing information storage and the associated costs for some time. Myriad decisions must be made about where to house the data and how to transfer between headquarters, operation centres and the facilities. With cloud-based asset performance management, both initial and continuing costs can be lower, but choices are still required regarding using an on-premise, shared or hosted model. Cloud-based asset performance management and comparative analytics deployments help organizations improve productivity and save significant costs, both short and long-term. The enhanced operational performance and lowered costs should quicken the pace of adoption for cloud-based solutions in 2015.
One of the more pressing concerns with moving to the cloud is security. For both public and private clouds, the first applications of the technology have been in areas where security and data quality issues are of somewhat lesser importance. For the energy sector, facility control still lies behind the local firewall, and this has been difficult for many organizations to change.
Cloud technologies are often seen as more risky; however they can be much safer. As connected devices proliferate in industrial environments, big data increases simultaneously. The vast amount of data generated by these systems and the current lack of management system or safeguards put organizations at risk for exposure or critical data loss. Safeguarding against intrusions and maintaining data integrity is possible through the implementation of a cloud-based technology asset strategy, which manages the entirety of the process and removes any guess-work or errors.
Cloud - countless benefits for utilities
Cloud technology offers discerning, smart analytics paired with instant visibility into operational data. Insights generated from cloud-based asset management solutions will help identify and address challenges before they become problems. In addition, the ability to react quickly to data translates into countless benefits – as well as safer, more informed and more profitable decisions.
While adoption has been slow thus far, the pace of adoption for utilities is expected to increase exponentially as organizations realize the value and the need.
Shawn Lifrage is Manager of Solution Marketing at Meridium.