Why energy companies need to be innovative

The corporate world is littered with the carcasses of companies that failed to innovate. The video tape rental company Blockbuster was once found on every high street. At its peak the company employed more than 80,000 people and operated more than 9,000 stores. Today, only a single branch – in the city of Bend, Oregon – remains. In the year 2000, the company turned down an offer to buy a fledgling company called Netflix for $50 million. Seven years later, Netflix offered to buy Blockbuster’s online business. That was turned down too. As the world turned towards streaming, Blockbuster tried too late to get into streaming and by 2019 a sole store remained, which now does well as a tourist attraction.

Meanwhile, photography pioneer Kodak had to file for bankruptcy in 2012 even though one of its engineers had invented the digital camera. While its digital products were successful, they could not replace the volume of film business that the company relied on.

Why is innovation important?

Several studies have shown the link between innovation and profit. An Australian study of almost 1,300 companies over the course of two decades found the most innovative firms experienced 1.95% higher yearly growth in profitability compared to non-innovative firms.

An earlier study by BusinessWeek and Boston Consulting Group looked at the world’s 25 most innovative companies, including Apple, 3M, Toyota and Samsung, and found that their profit margin grew by 3.4% a year over a ten-year period compared with 0.4% a year for companies in the S&P Global 1200.

Energy companies are having to innovate more than ever. On the one hand, companies are having to embrace the energy transition away from fossil fuels towards renewable energy as individuals, companies and governments aim towards their net zero goals. At the same time, conflict in various parts of the world have shown just how finely balanced the world is when it comes to energy security.

Energy companies are also starting to innovate in ways that go beyond the production and distribution of energy.

Despite the benefits of innovation, doing it can be hard. As businesses get bigger, they often find it hard to keep innovating because existing processes and traditions become entrenched and, if those things have delivered success in the past, there can be a feeling of if it isn’t broken, don’t fix it. This can then become an inherent corporate unwillingness to change. This can be even more difficult in large companies who can also be held back by hierarchical structures that have been put in place over years.

One way to harness innovation in such a situation is to work together with a technology partner such as Procode.

We work with several energy companies, and our experts work closely with our customers so it is like having an in-house innovation hub. Our clients often find it a refreshing change to work with Procode.

Energy companies asking their technology provider for changes to their software systems are sometimes surprised by the costs they are quoted. We work hard to collaborate with our customers to understand if the change will benefit the software as a whole and try to tailor our quotes to reflect this. We work together to build stronger software and in turn better customer service for our clients.

Innovation is built into the way we work too.

Procode uses an agile scrum methodology to build our systems, such as the Intelligent Data Adapter and Smart Datastream.

Being ‘agile’ in the world of technology is a system of delivering complex projects, such as energy platforms, through iterative development, where requirements and solutions evolve through collaboration. By frequently inspecting what is being developed and adapting as necessary, agile methodology allows for the rapid delivery of high-quality software that closely matches the company’s needs.

Agile scrums are one way of being agile. Using agile scrums, a combination of meetings, defined roles and tools to ease collaboration, helps the team structure and manage their workload. Each process is broken down into manageable chunks which have to be completed with a short time-limited period known as a sprint, typically every two weeks.

This means we can do a new release of software at a rapid rate, whether that be bug fixes, enhancements, or new features.

This rapid and efficient process means that we deliver innovation on a regular basis and that innovation can then be passed on to our customers’ customers. Happy customers are often instrumental for the heightened profits that innovative companies generate.

To talk about working with an innovative technology partner, speak to Procode today.