In the energy, power and utilities sectors, operational efficiency and reliability are cornerstones to success. As the industry transforms and becomes an increasingly competitive market, the convergence of information technology (IT) and operational technology (OT) is emerging as an essential tool in bridging the gap between digital systems and physical operations. With this unification, organisations can unlock new levels of asset oversight, data understanding and value chain optimisation.
According to McKinsey, getting ahead with this transformation can add as much as $100million incremental value to a business. However, the benefits go beyond financial reward with the opportunity to enhance sustainability, support distributed energy resources and improve customer engagement.
Here, we’ll explore how organisations can ensure return on their IT/OT convergence investment, fuelling efficiency and driving innovation.
What is IT/OT convergence?
Before exploring the many benefits, it’s crucial to have a clear understanding of what this convergence involves. In the energy sector, we’re referring to integration of IT systems – such as software for data analysis, enterprise resource planning and customer relationship management – with OT systems such as devices, sensors, control systems and monitoring tools.
By bringing the two together, organisations can use IT to analyse data collected by OT devices and get a full view of both operational and business performance. For example, IT systems can analyse data from OT devices like grid sensors and smart meters, monitoring power flow and ensuring reliability.
The Internet of Things (IoT) also plays a vital role, connecting OT devices to IT systems through the internet. IoT devices help to collect, communicate and share data in real time.
The benefits of IT/OT convergence
With a clear view of performance, organisations can unlock a host of operational benefits that, along with improved efficiency, can reduce operational costs. For example:
- Real-time visibility on power flow and generation assets to optimise generation and distribution, preventing outages and rolling blackouts and ensuring maximum efficiency.
- Improved predictive maintenance to more accurately plan for replacing aspects of the grid, or dispatching crews to remote locations for repairs only when needed.
- Continuous monitoring through IoT devices allows for data analytics leading to better performance and longevity of key assets.
- Data-driven decision-making fuelled by a comprehensive understanding, allowing for confident investment and strategic changes.
IT/OT convergence also unlocks opportunities for future growth. With integrated, unified systems, organisations can more quickly deploy new technologies. For example, utilities can expand smart meter networks more efficiently, while grid operators can introduce AI-powered solutions faster.
As more companies seek to introduce AI innovations, this convergence will be crucial. AI relies on high-quality data to deliver actionable insights. Beyond data-driven decision making, AI and robotics are automating more elements of energy operations. From autonomous grid monitoring to predictive maintenance, these technologies are reducing downtime and enhancing efficiency as well as reducing human error. By integrating IT and OT systems, AI can access and analyse both business and operational data to make decisions and provide business value.
The challenges of IT/OT convergence
Despite the sector’s ongoing transformation, many organisations still rely on legacy systems – some energy generation assets are not even connected to the internet. These outdated legacy systems present a significant barrier to IT/OT convergence, leveraging emerging technologies and remaining competitive.
Core modernisation must be the first step to overcome this hurdle. By modernising legacy systems, organisations can ensure their infrastructure is compatible with emerging technologies. With a strong foundational tech stack, organisations can unlock the potential of real-time data analytics, AI and IoT solutions. Moreover, this foundation allows for companies to invest in custom, proprietary software and AI-driven solutions, offering a competitive edge and giving them greater control over data, automation and predictive capabilities.
As more systems become interconnected, the potential for cyber threats expands, making robust security measures essential. Addressing this involves ensuring the security of both physical and digital assets and remaining complaint to protect against breaches that could disrupt operations.
IT/OT convergence driving the next wave of innovation
Overcoming these barriers will be crucial – the convergence of IT/OT is fast-becoming a foundational pillar in successful digital transformation as businesses respond to the digital shift towards the era of AI. By integrating digital intelligence with physical operations, organisations can optimise their processes, reduce costs and position themselves at the forefront of the industry.
As companies navigate the energy transition, companies that embrace this transformation will lead the charge in innovation, sustainability and delivering value across the entire energy value chain.
This shift also presents opportunities for companies developing proprietary IP or custom software to the energy sector. These solutions can unlock new revenue streams, from licensing AI-powered analytics tools to offering automation platforms that improve operational reliability. By investing in tailored software engineering early, businesses will be well-positioned to capitalise on this digital shift.
Get started by downloading our latest whitepaper and learn how to overcome barriers caused by outdated legacy systems.