The energy sector is ahead of most in introducing new technology into its operations and less risk averse, as detailed in the recent publication: KPMG global tech report: Energy insights (based on KPMG’s Global Tech Report 2024). Nevertheless, investment is still critical for energy companies to keep up with the competition, given the rapid evolution of technology, in particular, AI. The survey covered a wide range of sectors, drawing on the views of 2450 global technology leaders in total. Its Energy Sector perspective covered 122 technology leaders from 19 countries and territories from the energy industry (including power and utilities, oil and gas, natural resources, and chemicals).
At a crossroads
More than many other sectors, energy is at a key transition point as the drive to net zero and the eventual phasing out of fossil fuels progresses. It is a time of challenges, but also opportunities, as the use of clean energy develops. Addressing the challenges and seizing the energy transition opportunities will require a unified approach that integrates technology, data and strategy across the entire business.
Energy companies are bolder than most in introducing technology
Our research finds that the energy sector is more resilient and willing to take risks than other sectors. Compared with the cross-sector average, the energy industry is less likely to say that market influences such as economic uncertainty and market competitiveness have damaged their confidence about investing in new technologies. Twenty five percent of the energy sector technology leaders said that say that risk aversion rarely makes senior leadership in their organizations move more slowly than the competition, compared with a cross-sector average of seventeen percent.
But approach to AI is gradual and methodical
The majority of energy firms are in the top two maturity stages of AI, and sixty seven percent of energy businesses say they are achieving business value from their active AI use cases. But a sizeable proportion are taking a cautious approach and are still at the proof-of-concept stage of AI experimentation. Three main factors are tempering the pace of AI development. Firstly, many companies in the sector made significant investments in previous generations of enterprise resource planning (ERP) systems, and now face a large task in bringing this entrenched infrastructure up to date. Secondly, many companies which have introduced AI are struggling to scale it across the organization and hence gain the full benefits. Thirdly, many firms in the sector have yet to establish unified data foundations, and this makes it difficult to deploy AI to full effect.
Sector lags on data management
The majority of energy executives in the survey say that their organization is satisfied with the value it gets from technology. But measuring its effects is a different matter. In every data management category measured in the research, the energy industry is lagging behind the cross-sector average on data maturity — especially in relation to data interoperability, security and extracting meaningful insights. On average, energy technology leaders are 11 percentage points less likely than the cross-sector average to say they are confident in their organization’s ability to quantitatively measure the value being generated by its technologies. Customer, employee and environmental metrics are the areas where confidence is lowest.