HR's role in advancing AI transformation for future-proofing Energy organizations/ai-insights/hr-role-in-advancing-ai-transformation-for-future-proofing-energy-organizations

HR's role in advancing AI transformation for future-proofing Energy organizations

April 20, 2024

HR's role in advancing AI transformation for future-proofing Energy organizations

Businesses are undergoing rapid transformation driven by newer technologies and artificial intelligence towards achieving organizational growth. These changes in technological advancement and the new requirements of workplace culture pose substantial challenges and opportunities for Human Resources (HR) leaders. They deploy every alternative to upskill and retain the talent that will enable organizational growth and innovation. To succeed in this dynamic environment, HR leaders need to alter and revamp existing strategies to be more proactive, agile, and aligned with the current and future requirements of the business.

HR leaders need to leverage the potential of AI and digitalization to automate routine tasks and enhance employees' capabilities while fostering a culture of innovation and creativity that will give organizations a competitive edge.

Advantages of AI implementation in the Energy industry:

Implementing Artificial Intelligence (AI) and Machine Learning (ML) in energy organizations has substantial advantages, leading to transformative changes in strategy and operations.

  • AI enhances operational efficiency, including exploration and production activities, reservoir analysis, predictive maintenance, and supply chain management processes that reduce downtime, enhance efficiency, and improve cost savings. AI enhances operational energy efficiency, which leads to reduced waste and carbon emissions and maintains environmental sustainability.
  • AI analysis of massive datasets provides insights into geological data, market trends, demand prediction, and operational efficiency, enhancing decisions in exploration and investments and initiating targeted marketing strategies.
  • The application of AI in talent development supports personalized employee career development by recommending tailored training and development opportunities based on individual skills and experiences. It identifies high-potential employees for specialized projects and assignments to further boost their capability.
  • Moreover, AI enhances safety and risk management by recognizing and mitigating risks through innovative data analysis, predictive algorithms, and real-time monitoring to detect deviations and ensure safety compliance.

Therefore, Integrating AI in the energy sector has a substantial positive impact on increased efficiency, strides in sustainability, thoughtful decision-making, improved safety, and effective employee development. This assists in generating economic value and serving the industry to adapt to new market and environmental demands.

Critical Challenges of AI Transformation:

The implementation of AI in the oil and gas sector might face significant challenges that require a proactive, holistic, and strategic approach to overcome.

  • Firstly, adapting to rapid technological evolution is a crucial obstacle formed by the skills gap in the existing workforce. The gap between current and required AI proficiency skills requires extensive learning and development efforts. Also, there's a need for effective talent acquisition strategies to attract AI talent in a competitive job market. Managing the workplace's cultural resistance to technological transformation is another critical aspect, as employees often feel challenged to move from their comfort zone, and they fear job displacement and reduction of human contributions in an AI-driven environment.
  • Secondly, ethical, data integrity and privacy concerns pose significant challenges. Ensuring AI systems are protected from bias and aligned with organizational ethics needs attention and robust frameworks. The substantial dependence on data for AI operations also brings data privacy and security to the forefront to ensure alignment with the legal and regulatory requirements. Moreover, incorporating AI into existing organizations’ systems and workflows demonstrates technical difficulties, potentially disrupting and conflicting with the established business processes.
  • Finally, balancing the integration of automation with the workforce, especially in the energy industry, is tricky. It’s essential to balance activities executed by AI and those requiring human insight and intervention. Financial considerations and demonstrating a quick return on investment (ROI) are also crucial, considering AI transformation involves significant costs.

AI Transformation Roadmap

Various Energy organizations worldwide recognized the positive impact of deploying Artificial Intelligence on overall performance and productivity. The AI could be embedded throughout the Oil and Gas value chain from exploration and production as part of the Upstream to Refining as part of the downstream business to enhance oil and gas production and efficiency. However, impactful implementation of AI requires an adaptable transformation strategy that suits each energy organization to ensure successful deployment.

Such a transformation roadmap should cover the following:

  • Strategic Alignment and Benefits Articulation:

    Align AI strategy with the broader organization's strategic goals, visions, and future projects to ensure it echoes its ultimate goals. This includes alignment with the organization's culture, behaviors, values, and mindset that embraces innovation and promotes continuous learning. Leadership and Senior management buy-in ensure smooth implementation and effectively cascade the transformation messages across the organization. Gain the buy-ins of senior management and all stakeholders is essential for the success.

  • System Infrastructure and Alignment:

    Conduct maturity assessments of the current digital and IT infrastructure to ensure the integration readiness and availability of the big data required for the AI transformation.

  • AI Technology Selection and Approach:

    Define clear objectives for establishing an AI strategy for the organization, which will articulate and formulate the Buy, Build, or Borrow decision in line with the capability of the digital infrastructure. Due to the lack of AI capability in many mid and large-scale Oil and Gas organizations, the businesses might decide to go with the Borrow option (that may best fit their business), where they partner with AI-leading developers across the globe to develop and deploy suitable AI solutions that suit their strategic vision. Companies are establishing these partnerships to train internal talent staff to enhance their capability to maintain, adapt, and update the AI solution in the mid and long term to build the required capability to manage the AI solutions internally.

  • Talent Development:

    It is essential to assess the employee's capability to understand the related skill areas of strengths and skill gaps that require further development to prepare them and ensure their readiness for the AI transformation journey. This will ensure the organization has staff capable of effectively transforming and executing the AI strategy.

  • Security and Compliance:

    Maintain data security and establish the required rules and cybersecurity policy that control the AI legal requirements and protect the AI platforms.

  • Sustainability and Continuous Improvement:

    Establish the essential metrics framework to monitor the overall performance and continuous stakeholders' feedback for regular system enhancement and upgrade to remain fit for purpose.

In conclusion, the effective establishment and implementation of AI transformation depend on how HR leaders can successfully integrate AI goals with the organization’s overall strategies and medium-term and long-term business goals. HR leaders play a significant role in driving the AI transformation in the energy industry, and they shall analyze and explore the best suitable implementation approach for the organization before deciding to follow either the Build, Buy, or Borrow option.

It is worth mentioning that implementing a practical AI transformation roadmap requires establishing effective Change Management processes that form highly skillful transformation agents across all levels who can drive the change through effective stakeholder management and communication plans. Also, implementing pilot projects or breaking down the full transformation into phases will gain users' acceptance while improving the plan based on the lessons learned.

Moreover, to ensure a successful and smooth AI transition and adoption, it is essential to address employees' fears and concerns regarding how AI might affect their job security and role changes. By cultivating a culture of continuous learning, adaptation, and innovation, energy organizations can improve their current operations and prepare for future opportunities and challenges in a technology-driven industry.