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Building the Modern Energy Workplace Whitepaper

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1 quorumsoftware.com | © 2017 Quorum Business Solutions, Inc. All Rights Reserved. How New Digital Tools and a Changing Workforce Are Transforming the Industry WHITEPAPER Building the Modern Energy Workplace Rapid changes within today's energy industry are different from past cycles and supercycles. As energy markets adapt to a new normal, a convergence of industry and technological forces has produced both new challenges and new opportunities. Commodity price volatility is ongoing, the competitive landscape has expanded, and job-seeking Millennials are entering the workforce with new skills and expectations. Meanwhile, technologies like mobile, cloud, the Internet of Things (IoT), and business intelligence (BI) are beginning to change the competitive landscape in the energy sector. To capitalize on the opportunities these changes represent, and to remain competitive in the "new normal" era, some companies are embracing digital transformation. This whitepaper examines the coordination and fusion of strategy, culture, and technologies necessary to ensure that transformation efforts don't fail and that value is captured through improvements to efficiency and productivity, risk mitigation, and attracting and keeping top talent. When successfully undertaken, these improvements result in the modern energy workplace. "[Over the next decade], digitalization has the potential to create around $1 trillion of value for Oil and Gas firms." 1 World Economic Forum Challenges and Opportunities The need for cost-saving efficiencies and margin improvements in energy has never been greater, thanks to supply-and-demand trends, developments in alternative power, competition in new markets, and power storage innovations that have disrupted the industry. Battery, hybrid, and fuel cell technologies have begun to impact gas consumption in the automotive industry, and that impact is likely to grow. McKinsey & Company estimated in its most aggressive assertion that oil demand for light vehicles could decrease by approximately 4.5 million barrels per day by 2035. 2 A combination of alternative power sources and power storage improvements is shaking up domestic and commercial demand for heating fuel. That same McKinsey report found that the potential share of power generation by renewables in 2035 could be up to 36 percent from 4 percent today. And production innovations like shale fracturing have opened up the market to fierce competition, led by intense battles over market share and price, with the potential for international arbitrage of prices now possible on a scale not seen in previous cycles. But efficiency alone is insufficient. These forces are following unpredictable patterns as people, companies, and governments struggle to establish new behavior, business, and regulatory models to suit the changing socioeconomic and geopolitical realities. Organizations must create strategies to improve their ability to adapt—preemptively.

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