Birlasoft Sees Major Opportunity for IT & OT Integration in the Energy and Utilities (E&U) Sector

Aug 13, 2021
Utilities | 5 min READ
    
This article was originally published in ETEnergyWorld - Source link
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Birlasoft, the IT arm of CK Birla Group, is bullish on growth in the key energy sector verticals, driven by digital transformation and changing consumer preferences. With the impact of Covid-led economic slowdown ebbing, the company is seeing growth in business in the Utilities and Renewable Energy segments, Sangram Kadam, tells ETEnergyworld in an exclusive interview.
Sangram Kadam
Sangram Kadam

Former Vice President and Business Head (APAC & META)

Birlasoft

 
What is the broad structure of Birlasoft operations and where does the energy industry fit into it?
Birlasoft acquired KPIT's IT business three years ago. The company focuses on five key verticals -- Manufacturing; Life Sciences; Energy & Utilities; Communication, Media & Technology; and finally BFSI. These verticals are supported by horizontal service lines – Enterprise Solutions, Digital Transformation, Infrastructure and Cloud and Customer Relationship Management (CRM) etc. These operations are spread over three key geographies including Asia Pacific, Europe and North America. We are a public listed organization with revenue close to $500 million and the Energy & Utilities vertical contributes close to 20 percent of the overall business. That means it is close to $100 million vertical globally. As far as energy is concerned, we have three focus areas or sub-verticals including Oil & Gas, Utilities and Renewables.
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How has the Covid-led economic slowdown impacted business for the energy vertical? Can you highlight the larger trends?
Even before Covid, the Oil & Gas business was getting impacted because of low crude prices, which had turned negative. Covid has further added to the problem. Most of the customers who were in the upstream business had to cut production and investment. So, there was an impact on Oil & Gas last year. Because of the lockdown, consumption of petroleum products was down and therefore the downstream oil companies' business was impacted. The only silver lining was the Utilities business. This was because the utilities found that there is a sudden spurt in demand from households. We also realised that these companies are utilizing this time to launch transformation initiatives.
As an organization, we have grown in these tough times, whether it is about revenue or profitability or order book. Last year, the order book on the energy side was at the same level as the earlier year but this year we are already seeing growth. So, in the current year and the next year, the growth rate in energy will be back to normal.
 
You said the business on the utilities side has been a silver lining in these tough times. What about the growth from the Renewables vertical?
Both these segments have presented a silver lining. The discoms have been running on old systems and this is the time when they have realised the need to adopt digital strategies to serve the customers. On the renewables side, because most of the companies are private, they were already investing. There is a lot of push for alternative fuels from the policy side, too. So, as an organization we are seeing a lot of upside on renewable energy.
Can you briefly explain Birlasoft's business in the renewables segment?
There are two separate offerings. The first one is traditional IT which includes ERP or backend systems. We find there is a lot of room for IT transformation of energy sector companies, whether it is web-based systems, e-commerce, billing systems, financial reporting, enterprise applications, employee management etc. The second offering, and where we have seen the biggest upside in the last few years, is Operations Technology. That deals with automation, robotics, sensors, communication infrastructure, managing devices or assets etc. This also includes some of the newer areas like AI, Machine Learning, Blockchain, IoT etc. This is a big segment and growing fast. Over time, we have also seen the line between IT and OT thinning. Hence, we see a lot of growth in digital IT & OT in the coming years -- digital experience, smart and connected operations or assets, intelligent enterprises and the next generation platforms. Apart from this there are specific functional areas like asset lifecycle management. The energy industry is asset intensive where the business is capex driven. How companies can get more insights into the functioning of the assets is one of our strong areas. The same goes for supply chain and field service.
There is a lot of activity happening in the smart metering space not just because of policy push but also due to the rising demand from consumers for better services. How do you view India's smart metering market, from the point of view of technology and also project execution.
Because of Covid and the resulting disruption, people have come to understand the importance of digital technologies in areas like smart metering. The adoption of smart meters has been slow in most states and most of the discoms have run pilot projects. But now things are changing and even the customers have come to understand the importance of smart metering to better understand consumption patterns and have accurate billing based on reliable data. Apart from this, most of the action is happening also on the B2B side. For industries, energy accounts for a major part of the cost and therefore they want to plan operations better based on intelligence provided on power or fuel consumption. That is one of the reasons why the use of smart metering or digital technologies is picking up. For example, discoms' losses stand at more than 17 per cent and that is a huge number. Today, it is possible to use technology to recover a large part of these losses. We are also seeing a lot of outages happening due to reasons like natural calamities. It is possible to use technology to develop an understanding of these outages and manage them. The government has also made enough provisions for execution of smart grid projects. Going forward, technology will play a major role in the shaping of the energy transition, whether it is machine-to-machine, IoT, AR, VR, and blockchain.
From a growth point of view, what would be the top highlight of the current financial year for the Energy & Utilities division of Birlasoft?
We are seeing constant upside on digital adoption in the overall energy sector and that represents a major opportunity for IT & OT integration. This is specifically true for the utilities business. Also, IT transformation includes modernization of enterprise solutions.
 
 
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