The energy, utilities and resources (EU&R) sector is one of the few industries where financial control means managing high-value capital assets and equipment, and a large diverse workforce.
Both have a large impact on productivity and profitability. Combine this with a volatile and changing market climate and the need for a solid supporting software implementation becomes crucial.
Colin Beaney, Global Industry Director for Energy, Utilities and Resources at IFS, draws on recent IFS and IDC industry research to pinpoint the key metrics EU&R organizations must be able to quantify, in order to track success right down to every asset, worker and contract.
“There are many areas of common ground across the spectrum of EU&R organizations when it comes to running their businesses,” Beaney said. “Most deal with high volumes of mission critical-capital assets and equipment and most employ a vast workforce which comprises different skill levels, areas of expertise and even specialized contractors.”
Beaney said these common areas have a direct impact on both productivity and profitability, and that looking at business software that supports these key operational areas, the slightest improvement can translate into quantifiable benefits for EU&R organizations—extending asset service life, improving workforce efficiency and boosting their bottom line.
In its 2020 Power and Utilities Industry Outlook, Deloitte said new technologies, evolving customer preferences and the changing competitive landscape are leading many power companies to explore new business models.
“Some models may help utilities further enable the clean energy transition, and some may also provide new revenue sources, but exploring any new business model means being able to accurately measure success and failure,” Deloitte said.
The visibility into these metrics can be provided by enterprise software designed with EU&R operations in mind. IFS is already heavily involved in supporting the business strategies of some of the leading EU&R organizations in North America, including Brookfield Renewable Partners, Trans-Northern Pipelines, Covia Corporation, and Hecla Mining, Deloitte reported.
For this reason, IFS recently commissioned IDC1 to find a comprehensive view of the key areas its EU&R customers have focused on, and the key metrics they have tracked for when deploying enterprise software. Across such a varied industry, this meant working with a number of customers who manage similar pain points, including efficiently managing critical assets, optimizing a large workforce and comprehensively supporting business operations.
From their extensive feedback, it is possible to map out the key focus areas these customers outlined, as well as the quantifiable results they have achieved when addressing them with their enterprise software implementations.
Better asset and equipment management software has already established how EU&R organizations must protect revenue and manage costs while operating and maintaining capital assets. This equipment is expensive to buy, operate and maintain, and is on the front line of many EU&R operations.
This could span organizations that operate ports and relies on complex, modern installations, with fully automated assets to offload and transport containers and bulk goods, to a company in power generation or oil & gas, where assets are directly linked to the safe and reliable operation of a plant.
In this IDC white paper, the analysts found that a number of IFS EU&R organizations have successfully managed to extend the service life of key assets and increase uptime and availability. One customer highlighted better asset, part and workforce tracking as improving the maintenance of its equipment.
“The software helps us extend the life span of capital assets. I think it’s around 10–15% longer because of higher maintenance quality and assessments,” IDC said. “Other metrics include improved utilization and operational efficiency, from 80% up to the mid 90% bracket.”
One of the fundamental revenue generation models for EU&R organizations is servicing in field assets or dispatching engineers to customer homes for installations and repairs, This is often the only time many customers will meet their utility or energy provider face to face. Customer satisfaction is king here, so naturally metrics such as first-time fix rates, SLA adherence, minimizing travel and meeting appointments on time are key.
Simply scheduling the manpower and resources needed to guarantee such a high level of customer experience can be a time-intensive and inefficient process, but dynamic scheduling built into a software solution can provide some key workflow improvements.
This is where the IDC report unearthed some important metrics IFS customers were able to hit by dynamic scheduling of their field technicians. Across all the industries IFS serves, customers reported completing 28% more work orders and improved delivery speed on orders and products.
Not only does this mean end-customers are benefiting from quicker and better service, organizations increase their speed of task completion, driving faster revenue. This is an everyday occurrence once dynamic scheduling is incorporated into in field operations.
“We’re seeing big savings with IFS in scheduling activities. Before, it would take a couple of days, and now it takes minutes because it’s basically self-service. This happens every day for the field service team,” a surveyed client said.
EU&R organizations can make all the operational changes they like, but they will be in vain if they can’t consolidate all this good work and connect vast information streams into a core enterprise system of record. Consider a EU&R organization operating across the entire U.S. or even the whole North American continent. Building one, unified picture of the business is difficult when there are tens of thousands of assets and divisions located in hundreds of geographic locations.
On top of this, it’s common for many EU&R companies to operate different systems for different processes—often for historical reasons such as mergers and acquisitions, or selecting point solutions for point problems as a company has grown, Beaney said.
With an enterprise-wide solution specialized for EU&R, IFS customers reported to IDC that they are able to manage assets, projects and services alongside human capital management, finance, supply chain in one version of the truth. In fact, when it came to planning business budgetary cycles, IFS customers across multiple industries cited, on average, they had quickened by over 20%.
In a highly volatile and changing market climate, EU&R organizations need to look to increase asset efficiency, make the best use of their workforce and get smarter about their operations, Beaney asserted.
“That means focusing on these strategic business areas and making sure their enterprise software implementation can facilitate and measure the impact. Only that way will they be able to unlock efficiencies in these areas and manage every asset, worker and contract across the enterprise.”