The growth of digital technology in the energy business offers a benchmark for OSV owners in their own digitalisation efforts, says John Snyder
The growth of digital technology in the energy business offers a benchmark for OSV owners in their own digitalisation efforts, says John Snyder
Seemingly, not a week goes by without us reporting on OSV owners investing in digital technology. Some do it to reduce fuel consumption, some to improve logistics supply chains and others to lower vessel maintenance costs.
Nearly all are doing it out of necessity.
Following a market downturn that was both reaction to and precursor for fundamental energy market shifts, OSV owners are using new technologies as marketing tools and as added value propositions on fiercely competitive contract bids. But, by and large, they are not doing it fast enough.
The market has changed for good, and many OSV owner balance sheets are still struggling under the weight of disused assets and razor-thin profit margins (often as a best-case outcome). These realities mean owners have to make carefully calculated moves when the market is better suited to nimble, reactive players.
So, in this post-oil price bust, pre-100% renewable energy world, are OSV operators making the digital leap quickly enough to keep up?
If all goes to plan, renewables, including offshore wind, are expected to provide about 70% of the world’s electricity by 2050. Simultaneously, digital technologies are dramatically transforming traditional business models as the world moves towards decarbonisation of its energy supply.
Many of these same digital technologies have already become mature forces in the energy business. And a recent report from DNV GL shows just how much further along energy companies are with regard to adopting digital technologies than the OSV sector, revealing which technologies organisations are investing in, the benefits they are deriving, and some of the roadblocks they face.
Among other things, the report, Digitalisation and the future of energy, said energy companies are leveraging large and small distributed cloud networks, blockchain, artificial intelligence (AI) and machine learning, automation, augmented reality, electrification, sensor technology, drones and remote sensing, digital twins and mobile connectivity.
One of the first digital steps OSV owners need to take is to add VSAT connectivity on all their vessels to create a common platform for adopting internet of things (IoT) solutions. This will allow OSV owners to take advantage of the rapid advances in sensor technology that are making devices smart. There are about 23Bn IoT-connected smart devices now. By 2025, there should be at least three times as many.
But before you implement new digital technologies, your employees need to be on board. If they are not, no matter what you invest, your strategy is bound to fail. Some 41% of respondents to the DNV GL survey said a lack of a digital mindset among staff and their ability to change the way they work was one of the main barriers to digitalisation.
Besides buying into digitalisation, your employees will also need to be trained to properly use it. Some 91% of survey respondents regard it as fundamental for their organisation to invest in digital skills training, with 71% considering this important for immediate investment.
While it is tough to say what technologies will be the winners, there some clear trends among vessel owners that are leaning into digitalisation. Technologies that improve efficiency, lower operating costs and improve safety have been the first choices. Electronic fuel monitoring systems, remote monitoring of shipboard equipment, logistics supply chain tracking, project planning solutions and even telemedicine have been gaining traction.
In the future, data sharing will become more commonplace across the supply chain, although only 10% of survey respondents in the energy business said they would be willing to do that now.
What is clear is that digitalisation is having a significant impact on how assets are operated and managed in the energy sector and that a digital tidal wave is now sweeping through the OSV sector. Those that don’t catch the wave are bound to be left behind.
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