Eighty-six percent of energy executives surveyed earlier this year by Accenture Strategy agree that ecosystems – partnerships with other companies, including “frenemies” from other industries, to share customer insights, technology and industry knowledge – represent an increasingly important platform for growth.
The ecosystem, or agile, business model received broad support from the 104 oil and gas and other energy executives in the survey, which polled a total of 1,250 C-level individuals across various industries. However, the companies that the energy executives lead could do more to put the concept into practice, Accenture Strategy observed.
“While energy executives believe ecosystems are important and will have a significant impact on revenue growth, most have yet to seize their full potential,” Muqsit Ashraf, managing director and global head of energy practice with Accenture Strategy, told Rigzone. “The time is now – waiting is not an option when so many disruptors are taking advantage of this stepping-stone to growth.”
Ashraf recently enlightened Rigzone on several factors that Accenture Strategy believes could spur oil and gas companies to team up more often with their frenemies. Keep reading to learn more.
Rigzone: Oil and gas companies already partner with their peers in various joint ventures in areas such as offshore exploration and production and onshore refineries. How is the agile/ecosystem business model a departure from this?
Ashraf: Our research shows that the majority of energy leaders globally say that joining forces with other companies – including frenemies or players from different industries – is critical to their growth strategies, and 33 percent of energy companies are actively looking for partners today.
The partnerships in oil and gas today are operational and transactional in nature – they are focused on mitigating risks and sharing scarce skillsets. In the agile business model, competition between companies will be replaced by competition between dynamic ecosystems of partners.
Oil and gas companies will consign to history the adversarial, contract-based relationships between operators, service companies and vendors clogged with silos of data and insights that were never applied. Partnership-based models with aligned incentives will re-draw how ecosystems, versus individual companies, win.
Also, as oil and gas companies look for growth through pivots into power, sustainable materials, transportation, storage and digital services, the types of relationships and the focus on the customer will have to evolve considerably.
Rigzone: What are some potential disruptors in the next several years that could prompt oil and gas companies to take the ecosystem route?
Ashraf: First and foremost, the rapid pace of development of digital technologies – everything from robotics to artificial intelligence (and machine learning) and cloud to big data analytics will reshape how work is done or delivered. There are hundreds of traditional and non-traditional players investing heavily in this space, and no one company can manage the pace of change and breadth of developments. Being part of an ecosystem will be the only way to manage to be at the leading edge.
Next, there are new business models that will emerge as oil and gas companies considering pivoting to extra value from molecules and electrons – this again will require partnerships with data providers and aggregators, utilities, automotive and chemicals (and materials) companies. Success will require disintermediation of the value chain by forming partnerships that provide access to intellectual capital, customers and channels.
Finally, the customer will sit at the center of the expanded energy ecosystem, seeking the best from a multitude of players. Harmonizing the offers to meet the collective needs of the consumer will again require close collaboration and coordination within the ecosystem.
Rigzone: Are there industries that are providing a model for how to make ecosystems work in terms of embracing new mindsets, changing resource allocation, cultivating value and devolving control from the executive suite?
Ashraf: We’re seeing companies across industries forming ecosystems to make major innovation plays – delivering new products and services that grow the customer base and drive expansion into new markets.
Retail is a good example – we’ve seen retailers working not only with tech giants, such as Walmart and Microsoft – to drive innovation and outpace the competition, but also with other players in their own industry. For instance, Ikea announced a creative partnership with Adidas to understand what people want and need when it comes to exercising, sleeping and eating at home – such insights can be funneled into research and development and inform new product and service lines.
To learn more about the Accenture Strategy survey, visit the consultancy’s website.