How Energy Companies Succeed in the Digital Era!


Information is the center of the new energy world. The abstract world has joined the physical world.

Energy has itself become the currency of daily life  – through blockchain and other energy-intensive processes. 



1. THE NEW ENERGY WORLD IS BEGINNING TO TAKE SHAPE THIS YEAR, 2020, WE SEE THE FIRST SPROUTS OF SPRING COMING UP FROM THE GROUND BELOW


We have stumbled into the information age with phenomenal speed. An unrivalled tour de force of social and economic disturbance, standing in front of us like some sort of mighty impasse, seemingly impossible to cross. The 2020’s have begun without much upheaval. There wasn’t much ostentatious display in the media and society in general. Even fewer expected the 2020’s will bring much change into our lives. Many of us were indifferent, expecting the 2020’s to be like to 2010’s. Decades come and decades go they say.


As the year has turned, and the new decade has arrived after all, a mysterious pandemic fraught with danger derailed industry and commerce. Few individuals that I know of have acknowledged what was happening in front of their eyes. In the face of this pandemic even fewer have opted to take precautionary measures for their businesses, which would have allowed them to turn the levers of digitization to their own advantage, and to take decisive action in the face of adversity and ruddy waters.


We now see the sparring of old and new ideas – more so, ideals, we see markets tumbling, and we are in the midst of a magnanimous, astonishingly transformative period – and let us keep in mind where it all started – back when industrialists electrified industry & commerce in the early 20th century.


Melting the waning ice: Electrification was the last piece of the puzzle, the last building-block that was need for full-scale machination of urban centers. Coal fueled mass immigration in the late 19th century (the steam engine and steel being the symbol of that age, what people considered high tech back then). It allowed people to get from your home to your work place. What was the process?

The gradual introduction of the car, tram and subway system allowed the urban population to move around. Electricity enabled modern work life, which allowed people to work any time of the day. One could argue that electricity and copper were the symbols of the early 20th century.

It was the world’s first encounter with high tech, which illuminated the city from the dark circumspect, while small towns and villages remained largely agricultural. In  Europe, many localities were still steeped in the post-Napoleonic period and the associated socio-economic order.

We are just at the beginning of the information age, and it is relatively difficult to ascertain what the future may hold for industry and commerce. As shown above, the energy industry always played a key role in the transformation process. The changes will probably be gradual.


As we protrude or better, intrude, into the first decade of this new age, more and more economic activity has begun to make the move from the asphalt to the digital sphere. The empires of this new age, companies like Amazon, gained further ground and they seem to relish changes. And why should they not do so when it is in their own self-interest? But we should remember that not every company is as formidable as Amazon, and few have been sufficiently prepared to embark into the information age, dressed for the occasion and strutting along the path of glory in full swagger.


2. ENERGY COMPANIES HAVE BEGUN TO CHANGE THEIR STRATEGIC VISION, THEY ARE LOOKING OUTWARD, FOR NEW MARKET OPENINGS IN THE INFORMATION AGE THAT HAS BURST THROUGH 2020 


2020 is THE pivotal year to make these changes, we are at the center of the action. Energy companies have found themselves right in the belly of the beast with all this ferment and gore – so to speak. In April we have seen the pulpy underbelly of the oil price movement, the frantic stirring became – much more notable. Crude noise was heard all across the planet. Now here is an opportunity you might say. Sure, energy companies have worked on their strategy. Then again, not every company paddles in rich cash deposits, cause not every energy company had the chance to to build liquidity pre-corona. And let’s keep in mind that implementing a strategy can take more then 5 years to see the sun-lit horizon.


Reducing labor costs will become more important post-corona: That is so because quite a number of businesses (in various sectors of the economy) have become aware of the fact that they have to reduce labor costs to remain competitive somehow, they are facing declining sales even after this massive shutdown of the economy. That is not taking into account the fact that labor costs have exploded in most Western countries. If they want to make their businesses more productive, they can do so by streamlining processes, simplifying processes which often fly in the face of stringent regulation, automating processes in sales and establishing processes that work around the clock. That will yield more productivity, eventually.


The big picture / merger of business functions: Across the entire energy landscape, we find plenty of opportunities to invest and still achieve a reasonable return. In the East German Hanseatic cities there is still a famous saying: The money is in the street. Smart businessmen may invest in online marketing these days. These are opportune times – to mobilize business models dry as dust, the possibilities are ripe for it. At a time when our streets seem to be free of all traffic, B2C sales favor the world of the Internet.


Some may argue that every 50 – 80 years a new tech wave replaces the one before that. It seems like a wavy motion of technological succession, we pass from one technological superstructure to another. We are currently in the age of the internet and there is no certainty this will be it.


It remains to be seen whether digitalization will be the end point of industrial development, the cherry on the cake of industrial development so to speak. We are currently seeing new developments in the block chain business. But also block chain has yet to assert – or, more to the point – prove itself to be the successor to the internet of things. It may be the case that the internet of things, the latest iteration of technological upmanship, will reach the point of maturity around the year 2030. And let’s keep in mind that block chain is very energy-intensive. Blockchain is still heavily dependent on coal production in Western China. Blockchain also depends heavily on coal as energy fuel.


This gives further credence to something we believe is actually quite important: Sales operations will become more important in the future, but sales will play a different role in the business. Because technology changes so rapidly, sales will be tasked to keep track of industry trends and if needed, act proactively. Sales will closely examine where there are opportunities in your industry and keep in touch with other businesses.


Let’s think of it this way. Coal did not disappear over the course of the 20th century. Coal has not been replaced by renewables in the 21st century. What has happened is that another energy fuel, namely oil, has gained market share, became more accessible and easier to use, convert to energy, possible to put into different machines and could be converted to produce other derivative products with it: Plastics, window frames and other devices needed such as kitchen appliances for example.


We see that in many cases real competition does not come from within your industry, but from without your industry. First and foremost, future competition derives from new markets coming into existence, new players appear on the fringes of your industry making old practices redundant. There are other factors as well, such as new energy resources, new industrial processes, new geopolitical players, different legal structures and so on. They all play an important role.


3. SOCIAL MEDIA HAS PUSHED ENERGY BUSINESSES TO THE FOREFRONT AS THEY ARE AN OLD INDUSTRY BUT WITH A MASSIVE POTENTIAL FOR GROWTH – 2020 AND BEYOND.


The information age offers many dazzling business opportunities. Those of us best able to make the transition will face competitors from outside their industry intruding upon our slice of the economy. It is a world which allows for faster access to potential customers, you can build more business connection, have to leverage the intersection between energy markets, and networking with stakeholders from within and without the energy world. The key is to reach out to potential customers and to broaden your reach to get in touch with potential allies and get a feel what are the trends and general flow of ideas.


It is absolutely critical to talk to all of your stakeholders, and on that point, we reach out to our customers and potential business clients via social media. This greatly magnifies one’s voice. Many businesses, oil-producers for example, are already using social media – to their advantage – be it for interaction with stakeholders, businesses, media, or for recruitment purposes and there are many other uses of course.


Another aspect to keep in mind is that a significant minority of Generation Y has a razor-sharp grasp of the digital world like no other generation to date. They luxuriate in new tech, smart phone technology, apps and social media platforms and have spent much of their lives using these tools becoming expert users. These tools have now become a major source of income for businesses relying on all sorts of consumption-based activity selling online.


4. ONLINE SALES GENERATE SOLID REVENUE STREAMS FOR ENERGY BUSINESSES, BUT THIS IS JUST THE TIP OF THE ICEBERG OF WHAT IS TO COME.


Other companies have chosen to build various new types of online businesses and platforms, and see revenue growth through online sales. In the marketing world, we believe this to be a good approach to measure success by anyone’s yardstick. The easiest option is probably to build an online presence, a well-run, content-rich website with plenty of media interaction to sell your products or utilities. And hopefully it is not overloaded with advertising.


Online sales allows businesses to reduce labor costs and streamlines sales processes to such a degree that it allows your business to reduce labor costs and become more productive. Your sales team will be in a position to offer targeted services and take customers on a journey through the energy world, exploring. B2B-customers are invited to explore new opportunities to cooperate and build on an existing partnership.


Many thanks for the shared interest in the energy world!



Disclaimer:


This article is just meant to inform the reader of recent developments in the energy industry at large and to share knowledge and insights with a wider audience. The author does not put forth investment recommendations. This article should not be taken as investment advice and the author cannot be held to account for investments made. For more information, please refer to the Legal Disclosure and Privacy Policy, which you can click on or find at the top of this page in the menu bar. 


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