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Falling energy prices in 2020 are undeniable. In one month, WTI crude prices have fallen over 12%. If the COVID pandemic continues, we may be facing a recession. This means less demand for Energy. This leaves just one critical question. How can companies obtain profitability targets when prices fall through the floor like this?
The conventional playbook to respond to falling energy prices has some value. You might defer projects into the future. You might cut back on development. Some companies may even look at laying off some of their workforce. Other companies might refocus their energy efforts on jurisdictions that offer high tax incentives to the energy sector. These measures make a difference, however, there is one critical problem with these steps.
All of your competitors know about these moves, and they are all going to take them as well. That means that taking these steps will yield limited returns. To get ahead of your competition quickly, you need to look at alternative options.
An emerging technology, robotic process automation (RPA), is one of the best ways to improve your efficiency in Energy. Unlike staff layoffs, RPA does not generate negative publicity. Further, RPA can pay dividends during hard times and make the boom times even better. In essence, RPA helps to automate repetitive tasks in your company. Instead of having a person work through a requisition form or analyze standardized data in a spreadsheet, use RPA to carry out that task.
Is RPA worth the effort to implement? It’s a fair question to ask before you start a new technology project. DTE Energy, a Detroit based energy company with more than 10,000 employees, achieved these results with RPA according to ZDNET.:
By automating these processes with RPA, the company has saved nearly one quarter million annualized man-hours and has 75 automations in the backlog queue. Throughout 2019, DTE plans to implement 35 more automations in 5 additional business units.
That’s impressive! We can quantify that further by translating those figures into concrete terms. According to the U.S. Bureau of Labor Statistics, the average hourly wage rate in the utility industry was $42.22 in February 2020. That means DTE’s efforts have already generated more than $8 million in savings. It is also important to highlight that DTE achieved these savings by automating dozens of business processes. If you want to achieve similar results, plan to analyze and automate multiple processes.
Pipelines are one of the fastest-growing segments in the modern energy industry. More than 200,000 people are working in the oil and gas pipeline construction industry alone. As pipeline infrastructure continues to expand, managers need a way to monitor and manage thousands of miles of pipelines in a cost-effective and safe manner.
RPA helps improve pipeline management by processing reports from your field crews. For example, you may receive 200 weekly maintenance reports from your staff. Manually summarizing all of those reports takes a long time. Each day you spend summarizing the data means you have less time available to consider your options and make good choices. Use robotic process automation to summarize safety reports in minutes so that you can provide quick feedback to your field crews.
Consumer behavior and environmental factors are a significant variable in energy demand. Using sources like the short-term energy outlook from the U.S. Energy Information Administration, you can make some educated response plans for weather conditions and how they will impact energy demand. However, other factors may be less noticeable. Let’s say your utility supplies a college town like Ann Arbor, Michigan. In that case, you may have a customer service challenge with a large number of new tenants arriving every September. The university has over 40,000 students, while the city of Ann Arbor is only 113,000, so addressing student demand for Energy and other services matters.
Robotic process automation helps to manage customer demand by processing orders and common inquiries. For example, you can use an RPA system to evaluate new customer applications and automatically contact the customer if there are fundamental errors. Following up on these errors through automation gives customers faster service and saves your customer service staff for inquires that require a human touch.
Adding robotic process automation to your energy company may feel scary. As the DTE Energy example shows, there are significant benefits available in the form of faster service and cost savings. However, there is some prep work before you can jump right into this project. Before you begin, you will need to analyze your business and prioritize which processes to automate first, get budget and staff allocation approvals, then research how to execute this technology. After that preparation is done, your job is not yet done. You still need to select an RPA technology, configure it, and fine-tune it for your environment. Don’t put the burden solely on your technology department. Contact Blue Orange Digital to explore the robotic process automation opportunities hidden inside your company.
For more info see our Case Study on Energy Grid Optimization: