Navigating Challenges in the Energy Sector with Phil Schwarz at OpenText World 2024

This is Techron tv. Hey folks, we're back at OpenText World in Las Vegas, and we're gonna be talking about what's going on in the energy sector with my new friend, Phil. Phil, welcome.

Yeah, thank you. Thanks for having me. Pleasure.

I'm, in my mind at least, the energy sector is almost, sometimes it's in its own bubble because, um, the requirements change, the industry changes sometimes when the economy's up the sector's down, vice versa. Yep. Um, what do people need to appreciate about it in the energy sector these days?

And, um, what kind of impact does it have and what are you seeing? Yeah, so I, the world we live in right now through the lens I look through is we're energy limited. Um, the, the world's population's gonna go from 8 billion people to 10 billion people and by 2050.

And, and we need to scale energy, and that's gonna be a very challenging task for the world. And there's going to, information's gotta be flowing through enterprises in the industry efficiently to be able to make that happen. And how much of that challenge is actually like, you know, getting the natural resources versus just the distribution of the energy from one place to the other.

All of it, all of it's a challenge. It's, it's, it's a challenge to extract it, to generate energy, to ship it, to transport it, to distribute it. It's all a challenge.

And in for, for all of those logistics to happen in a coordinated, synchronized fashion and industry information needs to flow synchronously, um, as well to make that happen. Is data management therefore more challenging in that sector than other sectors or just different, I mean, for folks who don't work in that sector Yeah. What, what should they know if they decide to move into this sector?

Yeah, so, so through the lens, I look through, um, I don't come from a career in software. I come from the energy industry. And so I spent a decade of my career on the oil field services side as a field engineer.

I spent a decade in industrial automation on the sensor side. And coming in the software world, it's been eyeopening for me because I see software as being the, the link between man and machine. And we talked about, you hear Mark Beche talk about that is that don't send a human to do a machine's job and vice versa.

Don't send a machine's job to do a human's job. And so I see, I see information management as a technology to that o energy companies can use to modernize how people work to elevate their potential and ensure the world has the energy that it needs in 2050 and decades beyond. Uh, on the energy side in, I guess in your previous life, I guess we'd call those operational technology people, OT folks Yep.

Who are managing all that stuff. And then there's the classic IT folks and those two don't always see eye to eye. Is that getting better?

I mean, are we melding those things together? I think so. I think so, but there's still a lot more room to go.

Um, one of the most fascinating, uh, metrics that I look at when I have an opportunity to speak with a client is I go into their annual report and I look at the ratio of the gross plant property and equipment, which, where it represents all the equipment and assets and machines they have. And I look at it per person in their company. And if you look at that ratio of machine and man over the last decade, that ratio is anywhere between 40 to a hundred percent.

There are more, there are more machines being maintained on a per person basis. And to be able to, to continue with those efficiencies safely, people need the information to be able to do their job to keep those critical assets running. You can't leave your house today without tripping over somebody telling you about some great new AI things.

Yep. How will AI get applied to make energy more efficient? Oh my gosh, there's so many angles to that.

So as if, I'm gonna start with the, as a field engineer is, as a field engineer, I had to, I, to get safety information, I had to go to our safety system to get our maintenance records. I had to go to our maintenance system. I had to go to five different repositories to get content equipment manuals, uh, field tickets, safety instructions, procedures on the content side.

If that isn't a system of record for content, now I can start using AI to ask that content questions, right? That content was originated by humans. Somebody wrote that equipment manual, somebody wrote those safety instructions.

And as a field engineer, now I can just type in how do I safely, uh, maintain a turbine or make, do, do the work that I need to do safely. And instead of spending time to find information and then not just find a document, but scroll through a 300 page document, I can just ask a question for the information that I need. How soon, and maybe we're already there, will we get to the point where, um, I feel like we use all these tools to investigate issues after the fact?

Yeah. Or we get to the point now where the machines might tell us proactively that there's gonna be an issue unless we go fix this thing now. Yeah.

So it it, the whole root, so I was ingrained with root cause analysis and fishbone diagrams and coming into the information management domain. When I think of information management, I think of a, a simple equation, information plus human action equals business outcome. And for any business challenge, whether, whether it's a delayed project, unplanned asset downtime, a safety incident, any, any business event, if you did a root cause analysis and you found out the root causes for why that occurred, my guess is that there are going, you could group those reasons into human related issues in information management related issues with inadequacies and how information is managed.

Right. And a lot of those human related ones are just somebody kick something, they shouldn't have fatigue, um, didn't prioritize work. Um, poor communication, that type of stuff.

Yeah. We hear a lot about security. Is that becoming a bigger conversation among the energy companies because they are a critical infrastructure?

Yeah. The, the amount of the, the amount of security related cyber attacks or at an all time high as well as the incurred costs associated with them. And so security is a very integral part of the information management domain.

And, and companies need to not just organize and connect information and automate information, but secure it and protect it as well. Back in, back as a field engineer security back when I was a field engineer was connecting my laptop to with a cable. And we would, we would connect that cable around legs of tables and chairs.

And that was my view of security back in the day. But seeing the comprehensive technologies that OpenText has, it goes, it goes well beyond what it was when during my day as a field engineer and all these systems seem to be increasingly connected to the internet, but they weren't designed for that in the first place. Yeah.

Are we trying to overlay a security framework on top of critical infrastructure that's now connected to, uh, essentially a public network? Any information needs to be protected and secured. Um, and so wherever that information resides, it needs to be protected, whether it's it's on premise or in the cloud.

Um, it needs to be secured and OpenText specializes in in that security domain. Mm-Hmm. We were talking earlier with other folks here about the persistent divide between IT and the business, and of course, you know, OT guys are in that mix too.

Yeah. Um, in the energy sector, is that better or do they have a greater appreciation for it than other sectors? What's your sense?

I think it's gradual, but there's a lot more room for improvement. And I read a recent report, uh, analyst report within the past week, fairly recent. And the analysts, uh, rec suggested that just anybody across the enterprise should have a basic understanding of IT architecture.

And having been an operational user of information my entire career in non-IT roles, I completely agree with that. If, if people in the business, whether it's in operations or maintenance or engineering or supply chain, that they understood the basic concepts of IT architecture, they can be better stewards of information across the enterprise. Do the executives in the energy sector trust the data that they're shown or they kind of dubious about the, where, how and when it was collected?

I think it varies by company. I think their information management maturity, uh, varies by company and, uh, there are some companies that trust your data and some companies that lack lie behind. I think the industry as a whole, uh, lags in its information management maturity relative to some other industries.

But I think they're committed to to progress it because of the challenge the world faces with trying to generate enough energy to supply for 10 billion people here in just 20 years. I'm sure as a field engineer you would've found yourself in some pretty obscure places. Yes.

Are we getting to the point where we don't have to dispatch a field engineer to the remote corner of the world to go check some widget? I think, I think humans, in my opinion, humans will always be needed in some shape or form. Um, human action will always be needed with information, but that human action's become gonna become more efficient, more productive, more safe because of the information that's gonna be at their fingertips and how well it's managed for them to safely execute their jobs.

We live in a world of, shall we call it interesting times and yeah, energy may need to be rerouted almost instantly because we don't know what kind of conflict or Sure. Or for that matter or climate event occurs. And so is the energy sector getting more dynamic with the aid of it to kind of ship things around as needed?

That's, that kind of is a whole conversation around our business network capabilities and connecting people systems and thing and seeing those real time shipments of whether it's a a, a con, a shipping container of oil or a critical spare part that is needed at, at a certain location by 8:00 AM 8:00 AM tomorrow. Um, those logistics are handled and best managed by a business network, uh, connect once, reach anything platform. And I think with time, more and more companies are gonna make strategic connections with their vendors to be able to have visibility into all those, all those information exchanges.

There are some probably IT folks who are not in the energy sector who are not familiar with it, but what's your best advice for them to kind of break into this space? 'cause you know, how do you get in for, for IT providers? Yeah.

Speak their language. Um, so I've, I, I've won the boots of a field engineer and I've felt the pain of inadequacies of, um, of information management at that time. And so I, I can relate to the pain, whether it's a safety accident or unplanned downtime.

I've felt the challenges associated with those signi significant events make make partnerships with customers and to understand their pains and what they're trying to solve and how, how they're gonna use information to address those business challenges. Do we need to restructure the way our IT and OT teams are organized today to kinda get to the outcomes that we're looking for? Or, you know, are we served with this kind of semi federated approach and we have different spheres of influence and disciplines?

I think I think those spheres and disciplines are, are coming together and that it OT convergence and I think they're coming, whether they're, I don't see tomorrow or next year or even maybe five years from now that IT and OT will completely come together, but I, I think they are, they are starting to merge and there are synergies that can happen between IT and ot, um, to, to better deliver business outcomes for companies. Sometimes when I talk to OT people, they have a much higher standard of what's acceptable for, uh, downtime Yeah. Than IT folks and they kind of look at IT folks and they go, Hey, you're telling me you're gonna drop a few packets?

And I'm like, I don't think so. Yeah. Yeah.

Um, we live in a world of, we all feel it. We all feel it when we fill our cars with, whether it's electricity or gasoline, we feel it in our home utility bills and the heat we pay and not just us as, uh, you know, home, uh, residential consumers, industrial consumers. We all feel the added cost of energy and for the world to incrementally produce more energy the way we manage information, whether it's from information technology resources or operational technology resources.

That information needs to be best managed so that those critical assets can always be kept running and that new assets can be scaled efficiently without any delays safely. To your point, the sources of energy we have are more diverse than ever. There's everything from windmills to nuclear power to, um, solar and there's traditional oil, gas and whatever else.

All that has to be managed in some sort of cohesive fashion because I'm kind of playing one off the other based on availability and cost. So, yeah. Um, do the IT systems in the energy sector kind of, are they able to manage that or is that in the next big aspiration?

I think all, all of them manage information a bit differently. I think these new new new industries that, um, whether it's geothermal or renewables, they're basically get to start from scratch. And so they get to kind of start where they wanna be.

Whereas, whereas the legacy energy companies, they've gotta change. And so I see companies evolving their information management regardless. It's gotta be evolved, it's gotta be a, it's gotta improve, but there's different starting points, you know, uh, based on the type of company.

And I think, I think whoever is most efficient with how they manage information, um, we'll win the race. Do you think there's gonna be a lot of merger and acquisition activity across the energy sector? 'cause that's always a challenge when it comes to integrating the IT system.

Yeah, and we're, we're seeing that, and I think, I think it'll continue to happen. And I think information management plays a key role in that. Um, we have customers that, um, when they, when they get divested, they realize, uh, and they're becoming a standalone company, they realize, oh, we can't, we don't, we can't find all the information that we need.

And so they use OpenText solutions to go out and crawl their networks, identify information, organize it, automatically, apply it, and classify the data and then migrate it to a standalone system. And it's, I think information management is in integral for divestitures acquisitions, and it's a great starting point to get your information under control. If it's not, of course the whole sector is highly regulated.

Um, are those regulations becoming more stringent or less stringent? I think it varies. I, I think it, I think it varies.

It, it varies. Um, and regardless whether they become more stringent, it comes in waves. And no matter what the regulation is, companies still need to manage their information.

You know, and some of those regulations vary by state, sun, vary by country country. So how complicated does all this get at the end of the day? Do I have to be a rocket scientist to manage all these different data governance rules?

No, no. I OpenText serves, we serve industries with the most complex information challenges. And those often entails, industries with that are highly regulated.

And so in your information management journey, whether you're in a highly regulated or a moderately regulated industry, the, the technologies that OpenText provides serve those needs for those complex industries. Alright, folks, you heard it here. Hey, if you're looking for guaranteed lifetime employment, the energy sector's not a bad place to look, bill.

Yeah. Good stuff. Yeah.

All right. And we'll be back in a minute.