How Digital Transformation Is Refueling The Energy Industry

Manas Sahoo

Since the industrial revolution, the energy industry has played a key role in fueling the global economy, boosting global trade and supporting various economic activities that have transformed the way people live, work, and engage with each other. At this juncture, we see another inflection point characterized by rapid digitalization in the context of changing industry dynamics and consumer preferences.

Industry trends such as decarbonization, decentralization, and dynamism in supply demand, together with digital technology trends such as Internet of Things (IoT), cloud, Big Data, analytics, machine learning, mobility, augmented reality, 3D printing, drones, robotics, etc., will lead to another transformation of the energy industry enabled by rapid digitalization. The industry has long leveraged emerging technologies, but the rate that digital innovations spread has greatly increased, and leaders today need to keep pace with it in order to stay relevant. Sustainability may well be determined by how best an organization leverages digitalization opportunities.

Energy companies today can redefine asset management by moving from preventive-maintenance strategies to condition-based and predictive-maintenance practices. They can manage assets with digital twins of physical assets, thereby reducing costs and improving uptime and productivity. They can bridge the IT and operational technology gap and enable various IoT scenarios by getting unprecedented insights from the merging of these two huge but correlated data sets, generating new capabilities for them to manage their business.

Imagine a world where you could connect “things/assets” in your organization in the same way you have integrated transactions and activities of people/departments/business partners. Today, the advancements in IoT are turning that vision into a reality. The digital revolution is making waves within the energy industry – from smart homes enabling better energy management through smart devices that connect with each other, to energy companies automatically updating inventory by connecting to tanks and flow meters, tracking equipment performance using sensors, and more.

The SASREF story

The Saudi Aramco Shell Refinery Company (SASREF), a 50/50 joint-venture refinery between Saudi Aramco and Shell, realized early the true potential of technology-enabled business transformation and integrating their “things” (i.e., operational systems) to their IT systems. In 2014, the company began searching for ways to modernize operations at its oil refinery. Instead of making small, incremental improvements, the leadership at SASREF choose to transform itself into a digital refinery and take leadership in the oil and gas industry. In May 2015, it initiated the Tamkeen (meaning “empowerment” in Arabic) Program. This involved a full rejuvenation of its IT infrastructure while leveraging the potential of IT-OT integration without which the following industry-leading innovations could not have been possible.

  1. Visibility into refinery unit-wise product costing for finished products as well as intermediates, based on actual material flows in the refinery streams
  1. Machine vibration-management solution enabled by IT-OT integration
  1. One-click access to business performance indicators to facilitate informed decision making

“The product costing solution is providing us significant production cost transparency as well as true actual cost per plant unit beyond levels we have ever seen,” says Mohammed Iskandar, financial controller at SASREF. SASREF is among the refinery-sector pioneers building this capability.

Leveraging various solutions, SASREF has improved customer satisfaction thanks to real-time inventories and accurate lifting schedules. It has also achieved greater asset utilization, control of shutdowns, timely payments to suppliers, and, most importantly, higher employee engagement and end-user adoption. These days whenever I pass through the corridors of SASREF, I can sense an energized and empowered organization where the spirit has been boosted. As Majed Al-Ghamdi, planning manager for SASREF says, “Coming together is a beginning; keeping together is progress; working together is success.”

Learn how to bring new technologies and services together to power digital transformation by downloading “The IoT Imperative for Energy and Natural Resource Companies.”

Manas Sahoo

About Manas Sahoo

Manas Sahoo is Senior Director of the Oil & Gas and Chemicals Industries at SAP Value Engineering in Europe, Middle East, and Africa. He advises clients on their digital transformation strategies and helps them align their business strategy with IT strategy leveraging digital technology innovations such as the Internet of Things, Big Data, analytics, data science, next-generation enterprise resource planning, cloud, enterprise mobility, and in-memory databases. His 16 years of professional experience spans across management consulting; value advisory; digital transformation; enterprise business architecture; people, product, and project management; and coaching colleagues as a top performer throughout his career.