Read Mr Radhakrishnan Ramarathnam Executive Director - Information Systems (Functional), Hindustan Petroleum Corporation thoughts on the digital transformation of the energy industry.
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How do you see Digital Transformation reshaping the energy sector?
Digital transformation impacts almost every section of energy sector. Both upstream and downstream activities have been transformed substantially due to advent of digital technology. In case of refining, switching over to Distributed – Digital Control System ( DCS ) and its overlaid advanced supervisory controls ushered in the first major digital transformation. This was followed by transformation leveraging various operational technologies viz Maintenance management system, Project management system, Yield reconciliation and accounting system etc. With the integration of operational technologies with Information technologies like ERP, Business intelligence and Mobility, the transformation is taking new dimensions.
The digital interventions have certainly contributed to significant disruptive improvements in operational efficiency. Advanced analytics stemming out of the technology interventions are providing critical insights in better decision making, thus reshaping the energy sector beyond traditional comprehensions.
What is driving innovation in Digital Transformation – strategy, technologies or both?
Changing requirements from customers continuously pose challenges to create differentiated superior value to the customers. The revolution in Information and Communication Technologies started impacting the world as it has transformative impact on the business. Business strategies are built around creating superior value to customers and hence, it is imperative that the ‘strategy’ is the primary decision point for adopting a technology as a tool. A host of digital initiatives to support business strategy leads to development of any organization’s unique digital strategy as a key “allied-strategy” to the core business strategy.
How is (HPCL) driving innovation in Digital Transformation?
HPCL has always been at the forefront of implementing various initiatives in the arena of digital transformation. Innovation is a part of the culture in the organization where a process of continuous learning and development happens to the human resources. Digital initiatives come out of ideas from the employees working in refineries and marketing locations. These ideas come out through idea banks, workshops, strategy meets and conferences. The ideas are reviewed along with the functional Information Systems teams that closely collaborate in educating and sensitizing the business groups on the power of technology on a continuous basis. The technical teams join in when the requirements are assessed and firmed for a digital intervention. A pilot implementation is undertaken and the proof of concept is validated. This is thereafter rolled out across the organization. Stakeholder feedback is obtained all along and improvements are undertaken as a continuous process.
How will the customer journey be impacted by Digital Transformation?
Many digital transformation initiatives arise as solution and relief to pain points, business needs and growth imperatives of customers. In order to deliver value to a customer, a deep understanding of stated and latent requirements of the customer is essentially required. This understanding should be transformed into the design of robust processes. Digital initiatives to drive these processes and consistently track measurable metrics shall bring enormous value to the customers in terms of optimized cost of product/service, wider choices, transparent and comfortable decision on product/service and ultimately a sense of comfort and satisfaction.
Are you able to give a case study or an example of a company that has applied digital transformation in the energy sector and how this has tangibly improved its business?
HPCL refineries were one of the firsts to implement DCS (Distributed Control Systems) and APC (Advance Process Control) for improving operational efficiencies and quality assurance through LIMS (Laboratory Information Management System). Similarly, in HPCL Marketing wing, the implementation of innovative digital initiatives like TFMS (Tank Farm Management System), TAS (Terminal Automation System) and Retail Automation system has tangibly improved the way HPCL do the business. The external applications interfacing with the core ERP system have added enormous value to the organization. An integrated B2B solution with oil companies in India has eased the process of information transfer in the Oil Sector. Finally, deriving meaningful insights from the use of Business Intelligence system has provided meaningful insights for superior decision making and performance monitoring.
What are some key indicators of better measuring/assessing customer’s satisfaction along this journey?
Businesses strive to create memorable experiences for their customers measured primarily in the key areas of customer service excellence, new revenue potential, cost efficiency and capital efficiency. Increased sales volumes, market share, improved footfalls at outlets, profit per customer, percentage of goods returned, low customer complaints and more customer feedback, etc are some of the key indicators of higher satisfaction which can be measured through analytics. The organization culture built to consistently drive innovation, robust processes, strong IT infrastructure, competitive workforce and effective business management philosophies contribute to the success of customer service excellence strategies.
What role does IoT play in the digital transformation journey in the energy sector?
IOT has the ability to connect the sensors embedded in various equipment’s that are geographically dispersed.
In energy sector, with reference to HPCL also, we have equipment’s and installations that are crucial to the business, but are remotely located. These installations receive, store, process and ship high value and volatile products. It is therefore essential to constantly monitor and evaluate the health, safety and security of all these equipments. IoT enables to connect and collect data from the various equipment’s and transform the data into meaningful information. This means unstructured, machine-generated data can be analyzed for insights that drive improvements in design and execution, and lead to smarter, faster decision-making at both strategic and tactical level.
While it is well acknowledged that IoT plays a pivotal role in the digital transformation journey in the energy sector, the challenge here is to install intrinsically safe devices conforming to statutory safety regulations.
Is Big Data really the new oil?
Both Oil and Big Data provide excitement upon exploration. Both bring rich value to the producers and owners. Data, big or small, is not a commodity like Crude. Crude, a fossil fuel, is widely believed to be depleted over time with consumption. Data, on the other hand is generated with human ingenuity and driven by technological innovation. Data is available all over the world, and is growing with the technological advancements in mobile devices and internet of things. Thus Big data is truly transformational and democratises the society to probably make human life better. Indeed, Big data is new Oil in a “no depletion” state depending on technology to support business in providing new insights through refined exploration for creating a continually growing value.
About: Hindustan Petroleum Corporation Ltd (HPCL) is a Government of India Enterprises with a Navratna Status, and a Forbes 2000 and Global Fortune 500 company. HPCL owns and operates two major refineries producing a wide variety of petroleum fuels and specialities. HPCL also owns and operates the largest Lube Refinery in India producing Lube Base Oils of international standards, with a capacity of 428TMT. HPCL has the second largest share of product pipelines in India and a vast marketing network consisting of 13 Zonal Offices in major cities and 106 Regional Offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG bottling plants, Inland Relay Depots & Retail Outlets, Lube and LPG distributorships. Consistent excellent performance has been made possible by highly motivated workforce of over 11,000 employees working all over India at its various refining and marketing locations.