During the past few decades, the energy industry has changed significantly. A combination of horizontal drilling and hydraulic fracturing has completely changed the way oil markets operate. Furthermore, there has been a massive increase in the demand for oil. Even though renewable energy has become more popular, oil is still the most common energy resource for boats, cars, planes, and the vast majority of other vehicles.
With a significant increase in the demand for energy across all markets, including emerging markets, it is important for energy companies to focus on scalability. When it comes to the energy industry, scalable energy resources are important because they can reduce costs, which is even more critical when inflation is on the rise. What does scalability look like in the energy industry, and what does it mean for the future? Keep reading to learn more.
A Marked Reversal of Trends in the Energy Industry
For the overwhelming majority of the 20th century, increasing scale economies were responsible for shaping the energy industry. When it comes to the growth of electricity, the demand skyrocketed, forcing the energy industry to make changes to keep up with the rising demand. In oil extraction, a small number of firms dominated the vast majority of the global market. Natural gas industries, even when contained to a single continent, were also dominated by a relatively small number of firms. The transmission and distribution of energy fell under the definition of trusts or monopolies, which had a tremendous amount of regulatory influence and political power.
Now, in the 21st century, these trends are changing quickly. Thanks to new technological advancements, it is possible for relatively small entities to use advanced equipment to extract energy sources from the earth. Furthermore, appliances have gotten more efficient, meaning that not as much power is required to power a single device. Despite that, demand is on the rise because there are a lot of people interested in energy resources.
How Emerging Themes Can Create Value From Scale
Today, the energy industry is more competitive than ever before. Therefore, companies need to be structured and deliver it in the way they pursue scalability. There are multiple dimensions that have to work in concert with each other to make sure businesses put themselves in the best position possible to be successful. A few factors to consider include proximity of assets, the business model, market maturity, and advanced technology. Some of the examples of these points in action include:
- Renewable technologies are only becoming more popular. Development costs are dropping, new value is being created, and new opportunities are being explored thanks to the advances made in modern technology. This should make it easier for companies and renewable energy fields to scale up.
- A lot of power markets are shifting the way they operate. Merchant exposure—which is key when company returns depend on wholesale power prices—is becoming more important. This will benefit companies across the spectrum, making it easier for smaller companies to compete in this industry. Wholesale power prices can make it easier for companies to scale.
- The geographic proximity of assets continues to play a significant role. The closer assets are together, the less maintenance is required. This makes it easier for energy companies to scale up their operations.
- New companies in the industry need to think carefully about what to do with their capital. Capital constraints may predispose them to a specific business model that makes it difficult for them to expand. Scalability is incredibly important in helping newer companies find success in this field.
These are just a few of the many ways that scalability is becoming more important in the energy industry. It is critical for businesses to think carefully about what they need to do to successfully scale up their operations and compete in a difficult environment.
What Energy Companies Need To Do To Scale Up Quickly
It is critical for energy companies to think carefully about everything they need to do to scale quickly and maximize their resources. Some of the most important points to keep in mind include:
- Resource Utilization: Businesses in the energy industry need to think carefully about how they utilize their resources. Continuous project delivery can make it easier for businesses to optimize their workforce and processes. In particular, businesses need to think carefully about their procurement efforts to ensure they always have enough resources available but do not waste money on overhead expenses and maintenance.
- Brand Management: Brand management is critical at all levels. Reputation management is critical for helping companies develop strong relationships with local resources. This can also help them make a positive impact on their customers and clients, providing them with a stable cash flow.
- Risk Diversification: Risk diversification is also critical. Energy industries need to do everything they can to hedge their risk with multiple asset pools.
- Appropriate Monitoring: There are a lot of regulatory requirements in the energy industry. Businesses in the energy sector need to keep an eye on their infrastructure to make sure they are compliant with all regulatory requirements. That way, they can reduce their chances of being hit with fines and sanctions.
If companies in the energy industry can keep these points in mind, they will have an easier time scaling up. Companies in the energy industry must make sure they do not expand too quickly, but they also need to ensure they have the resources necessary to support rapid expansion.
Short-Term Operating Margins and Long-Term Scale Benefits
As businesses in the energy industry continue to grow, it is important for them to analyze the trade-off between short-term operating margins and long-term scale benefits. This means there’s a delicate balancing act that companies in this space need to hit. If companies limit their growth, they can keep their operating expenses lower and won’t need to spend as much money maintaining their equipment if they do not expand their operations. On the other hand, if companies try to limit their operating expenses by limiting expansion, they will also cap their revenue growth. It can be difficult for companies in the energy industry to decide how quickly to expand.
The appropriate way to address this challenge is to make sure all pieces are in place before growing. For example, today, there are many energy companies that are spread out across a wide area. It can be challenging for companies to manage multiple moving parts, mainly when they are geographically dispersed. What do energy companies need to do to ensure they have the resources to manage so many moving parts in many different locations? A secure file-sharing solution is an important place to start.
The Top Benefits of Having a Secure File-Sharing Solutions
There are several significant benefits that companies in the energy industry will enjoy if they have access to a secure file-sharing solution. Some of the top benefits to keep in mind include:
- Security: Energy companies have a lot of resources, making them a common target for hackers. If you decide to go with a secure file-sharing solution, you can definitely maximize your security. As long as you rely on a scalable file-sharing solution, it will grow as your company gets bigger. This makes it easier for you to protect yourself, particularly if you rely on a program that updates itself automatically, such as SmartFile.
- Save Money: If you do not have a secure, scalable file-sharing solution, you will need to replace your program relatively quickly. As your program grows, you will need a larger file-sharing solution to handle your operations. This means you need to purchase a new program, train your employees on how to use it, and hire new technical staff to take care of it. If you get a program for your files that will grow with your company, you don’t need to waste your money or time training your employees how to use the new programs.
- Save Time: Time is your most valuable resource—it is important to make sure you protect it. If you have a scalable file exchange solution, you’ll save a significant amount of time. You will have access to a wide variety of automation features that can make it easier for you to send your files from place to place, and you might be able to have multiple people working on the same file simultaneously. If you want to spend your time on more critical tasks, invest in a secure file-sharing solution.
- Reduce Employee Turnover: Companies must do everything they can to keep their most talented employees around. If you find a good program you can use to manage your files, you will keep your employees’ lives easy. They will have the tools they need to get their work done quickly, and they will be more likely to stick around. Find the right program if you want to reduce your employee turnover.
Clearly, there are a lot of benefits that energy companies will enjoy if they decide to use a scalable file-sharing solution. How can you choose the right program to meet your needs? More information below!
Security Considerations for the Energy Sector
As you look for the right program to help you grow your energy company, there are several essential considerations you need to keep in mind. They include:
- Proactive Defenses: You need to find a program that has the right defensive measures. Cyber-attacks have become more common during the past few years, and they have increasingly targeted energy companies because they represent a vital component of national infrastructure. Ensure you find a program that updates itself regularly with the latest cybersecurity measures.
- Better Surveillance: You should also find a program that makes it easier for you to keep an eye on everything that is going on. Even though it is great that you can automate a lot of your operations, you must make sure you have access to the right surveillance. Remember that you are only as strong as your weakest link, and knowledge is power. Make sure you use a program that makes it easy for you to see everything that is going on in your network.
- Comprehensive Encryption: You should also find a program that will help you encrypt your files from start to finish. Even though your files are probably encrypted at their origin and destination, they might not be encrypted in between. This could leave your business vulnerable to an attack, so use a program like SmartFile that provides you with end-to-end encryption.
- Ease of Use: Finally, you should find a program that is relatively easy to use. You may have found the best program available, but if your employees struggle to use it, you may have a difficult time taking advantage of all of its features. Look for a program that provides you with advanced features and a short learning curve.
If you take the time to find the right file exchange solution for your business, SmartFile is here to help you. Count on our program to place your energy company in a position to grow.
SmartFile Prioritizes Scalability in the Energy Industry
Scalability is incredibly important in the energy industry. You must ensure you have the right program available to help you manage your most important documents. That is where SmartFile can be helpful. You get access to the latest security measures, granular permissions, end-to-end encryption, and file versioning. It would be our pleasure to help you take full advantage of these features. Contact us today to learn more about how SmartFile can help you scale your energy company.