Decarbonization in Utilities: The New Mandate
Decarbonization is the driving force in utilities investment trends.
With 2022 behind us, the early months of 2023 are seeing a continuation of increasing energy prices and persistent inflation. The energy transition has been placed in “high gear” by public sector funding and supply chain pressures have continued. CIOs are under pressure to adapt and change as never before.
For Utility companies, it is all about the squeeze on O&M combined with the need to support, with technology, the immense pressure to assure grid stability during this time of change.
For Oil & Gas (O&G) companies, record profits were recorded in 2022, providing substantial earnings and board approval to fund their strategies in 2023. And while O&G companies recognize world issues in the geopolitical and macroeconomic environments, focus and importance continues to be on transitioning to cleaner energy in the long term. We expect continued acceleration of digital transformation and re-visiting business models that drive growth and focus on renewables. Cybersecurity, engineering technology, cloud adoption and data analytics will be the main IT drivers in 2023 and extend into 2024.
ESG is an important topic for Oil and Gas companies as it is with all participants in the Energy space. ISG is seeing a shift from shareholder to stakeholder focus with higher expectations for transparency and accountability from more stakeholder groups.
Chemicals, Metals & Mining industry have experienced headwinds due to higher energy costs around the world along with their customers destocking inventories due to economic concerns. Despite the economic concerns, we are seeing continued investments in digital transformations, data analytics and enhanced hyperscaler/cloud computing initiatives. Operational efficiency will be among the focus areas which will influence the need for OT solutions.
ISG has the industry knowledge and experience to advise utilities on cloud and agile digital projects, divestitures, mergers and acquisitions and more.
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Many regulators put the onus on you to demonstrate that your costs are reasonable with outside benchmarks. When it comes to providing testimony as an expert witness for utilities, our competitors’ survey approach to data and benchmarking is not sufficiently dependable on the stand. At ISG, we do not collect benchmarking data through broad-based surveys, and we do not purchase data for benchmarking purposes. Instead, we provide:
Get visibility into the root causes of your gaps in performance and actionable recommendations to achieve the “right cost to serve.” Along with these key insights, ISG is experienced at testifying to our benchmarking methodologies and resulting studies in regulatory proceedings around the world.
ISG combines organizational change management (OCM), target operating model and IT service management expertise and our relationship-health tool to help one of the world’s largest metals and mining corporations ready 47,000 workers for a new ServiceNow platform, related IT processes and organizational changes.Learn more
Facing system obsolescence, a leading US utility sought a trusted system integrator who could be depended upon to deliver a cutting edge Maximo-based solution on-time and on-budget such that business objectives would be achieved.Learn more
ISG helps a major energy retailer transition to a new digital workplace service, improving its performance and enabling its digital transformation.Learn more
ISG is a leader in proprietary research, advisory consulting and executive event services focused on market trends and disruptive technologies.
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The oil and gas industry is going through a phase of long-standing uncertainties. An unpredictable economy, the Russia- Ukraine conflict, reduced investment in upstream assets, price volatility and energy transition initiatives have all created an imbalance in supply and demand. Despite the uncertainties, rising oil prices resulted in record revenues and profits for major oil and gas companies. Majors have posted profits much higher than their previous year’s numbers. For example, BP posted a profit of $8.15 billion in the third (July to September) quarter of 2022, which is approximately 1.5 times the previous year’s number.
Embracing a cloud-based ERP application may be the single most important move you can make to springboard your organization into true digital transformation.