Traditionally, players in the energy space have responded to periods of market volatility by cutting CapEx spending on aging assets and infrastructure, reducing headcount and postponing or cutting OpEx spending on maintenance activities. To a large extent, the response to the COVID crisis was no different in this respect.

But cutting costs can be done only so many times before the reliability of assets, the integrity of the infrastructure and the safety of employees and customers are put at risk by accidents or outages that may also have legal or regulatory implications. Additionally, the COVID crisis added so many other complicating factors that energy players and their service providers were not able to respond exclusively by leveraging the playbook that had seen them through previous crises:

• Much of the available overhead was already cut during the 2008 and 2014 crises, so energy operators were challenged to find new ways of driving efficiency during the market instability
• COVID-induced lockdowns impeded technicians from being deployed to customer sites to maintain assets
• Supply chain interruptions impacted the availability of parts and equipment needed to maintain assets and infrastructure
• New revenue streams with accelerated time to value were needed to survive the COVID-induced market volatility

The crisis challenged operators and service providers alike to find ways of stabilizing operations and keeping assets up and running. But it also acted as a catalyst that has accelerated innovation and transformation while at the same time generating ideas that have supported optimizing costs and driving efficiency in existing processes.

What are some of the ways that energy industry players have leveraged innovation to survive the pandemic and build resiliency for the future?

1. Keep assets running with remote technical support

During the height of the COVID crisis, we heard many stories of companies that put in place or expanded upon existing remote technical support operations. Technical teams used historical asset data combined with live data from sensors where available, or communication with onsite customer teams for assets not monitored remotely, to maximize their ability to remotely troubleshoot assets.

The success rate of remote troubleshooting efforts has convinced both service providers and customers that continued investment in technical support teams and technology can help contain field deployment costs while reducing downtime and driving a new level of service and responsiveness for customers. Before COVID, many customers expressed reluctance to try remote troubleshooting: Calling a technician to the site was perceived to be the fastest way to resolve issues. The crisis demonstrated to customers that remote troubleshooting is a viable and more cost-effective alternative to a field call, and they are now much more likely to accept engaging with vendors through remote interaction.

2. Support stable operations with accurate, actionable data

One of the primary distinctions between organizations that thrived and those that struggled during the COVID crisis was access to accurate and actionable data on everything from operations to customers to assets. One energy company recently shared an example of this: During the COVID crisis, they were able to cross reference installed asset history data with “as maintained” bill of materials data to predict which parts of their customers’ assets were most likely to fail. With this information, along with on-hand inventory data, they were able to locate available inventory and bypass supply chain interruptions by proactively staging parts close to the customer sites where they were most likely to be needed, thus keeping their customers’ assets operational throughout the crisis.

Most organizations already have access to various forms of data that can be used to support critical business processes. However, many say they are overwhelmed by volumes of data in varying formats and struggle to find ways of turning this data into meaningful, actionable information. I recently heard a business leader interviewed who cautioned that businesses that try to analyze too many variables often lose sight of the truly vital ones: Organizations that were able to harness the power of data and technology were successful because they understood that the outcome of their analytics efforts needed to drive action. They focused first on identifying the issue they were trying to solve, and then on identifying, collecting and analyzing the data needed to solve it. In this way, they were able to tackle one issue with one analytic, solve it, then move on to the next.

3. Define new service models using data and technology

For the energy industry, repairing and maintaining assets in remote locations is difficult under the best of circumstances. During COVID lockdowns, the added logistical complexity of getting resources into the field quickly and safely made it nearly impossible to execute emergency repairs within reasonable timeframes. Those that had assets that were monitored remotely fared a little better than their counterparts without connected assets. But for the most part, energy players are still not consistently able to leverage data from connected assets to be proactive in their maintenance approach. As one service leader recently told me, “We still can’t figure out how to use our asset data to accurately predict when our assets will fail, much fewer leverage data to design the next generation of products so they won’t fail to begin with!”

For many in the energy space, the COVID crisis brought home an important lesson: Future products will need to be designed to drive outcomes. They will need connectivity built in, they will need the upgrade process for both hardware and software to be agile, and they will need components and parts that can be identified and replaced quickly. Service companies that want to shift to an outcome-based service model will need to learn how to harness the power of data to build the historical evidence that will allow them to analyze how, why and when assets fail. From this information, they will need to formulate a maintenance strategy that ensures the future availability and reliability of assets. Only by implementing a shift from reactive service models to outcome-based service models will players be able to control operating costs while at the same time delivering on customers’ evolving expectations of uptime and reliability of assets.

The number one lesson learned from the pandemic is how unprepared players in all industries were to deal with a global calamity of COVID’s magnitude. However, the crisis also provided a unique opportunity for companies to build resiliency through innovation. Some companies learned to harness the power of data to enhance process efficiency and ensure business continuity. Others were able to lay the foundations for new service models that will ultimately strengthen ties with their customers.

One thing is clear, in the post-COVID world, the ability to innovate will become a competitive differentiator that will determine who succeeds and who is left behind. The companies that started the innovation journey during the height of the crisis and can leverage their experience to put in place a post-COVID roadmap will be more resilient and better positioned to tackle the business challenges that lie ahead.