Digitising energy: The story of Sembcorp

In assessing the global energy landscape, a “fundamental shift” is taking place.

That’s the view of Matthew Friedman, speaking as executive vice-president and Chief Digital Officer (CDO) at Sembcorp Industries, a Singapore-based utilities, marine and urban development group.

“Digitalisation is disrupting and transforming the energy industry,” he observed. “From generation to customer relationship management, fundamentally changing every facet of the industry’s value chain.”

With presence across five continents, Sembcorp is a business built on providing solutions across the energy and utilities value chain, spanning gas and power, renewables and environment, and merchant and retail sectors.

Coupled with offshore and marine engineering expertise, the organisation also houses a balanced energy portfolio of over 12,000 megawatts, including thermal power plants, renewable wind and solar power assets, as well as biomass and energy-from-waste facilities.

Commitment to a sustainable industry

In February 2018, Sembcorp unveiled a new strategy for the future, designed to pursue sustainable growth.

“Core to the strategy is an acceleration of technology adoption and the deployment of digital technologies to support new capabilities as well as improve performance and capture opportunities,” Friedman said. “As a company, we recognise that technology and digital platforms can be powerful differentiators.”

Under the leadership of Friedman – who joined the business in 2017 following more than 16 years at IBM – Sembcorp also established a new Digital and Technology team in 2018, with a mandate to drive business performance through innovation, research and development (R&D), and deployment of advanced technologies.

“Our aim is to broaden and deepen our digital capabilities around four themes: establishing a strong and secure information technology foundation, digitising our business, embedding innovation, and managing the digital journey and change,” he explained.

“The majority of our investment in R&D is going towards building intellectual property that will help improve how we manage and optimise our assets and reduce greenhouse gas emissions in our energy business.”

For example, Sembcorp is developing fully-automated drones powered by artificial intelligence (AI) to help inspect pipeline and equipment, “faster and more accurately” than the manual checks that are being conducted currently.

“Some of the initiatives that we are currently driving, such as our work in advanced predictive analytics, are the first of their kind in the energy sector,” Friedman added. “These could help differentiate us in our industry.”

Beyond the company, Friedman said collaboration on R&D is also underway with government agencies, research institutes, technology providers and institutes of higher learning.

For instance, in 2018, Sembcorp announced a S$10 million extension to its joint fund with Singapore’s Energy Market Authority (EMA) in support of R&D for the country’s energy and utilities sector, as well as another collaboration with EMA to explore applying energy storage in Singapore.

“Enabled by a wide range of technology, from cloud computing and robotic process automation to artificial intelligence, Sembcorp’s digitalisation initiatives have received the support of the Singapore Economic Development Board,” Friedman added.

“Sembcorp will continue to innovate and embrace digital technologies to create competitive advantage and strengthen our position as a leading energy, urban development and marine group.”

Road to digitalisation

In drawing on more than 25 years of experience, from startups to large multi-national corporations, Friedman is well versed in negotiating the ever-changing technology cycle.

For digital leaders, options appear endless as innovations such as blockchain, robotic process automation (RPA) and micro-service architectures enter mainstream markets.

Add digital workplace collaboration, workflow automation and data lakes into the mix, and the energy industry appears spoilt for choice on the path to digitisation.

“Embracing digital technologies is critical if we want to stay ahead of the game,” Friedman acknowledged. “Developments in AI, machine learning (ML), cloud computing, the internet of things (IoT), blockchain and RPA, underpinned with cybersecurity, are disrupting most industries, including ours.

“These technologies are also enabling new business models that offer competitive advantages to early adopters.”

For example, Friedman said Sembcorp has built insight platforms using ML and AI to “radically improve how we operate and optimise our thermal and renewable assets”.

“These platforms run on an advanced, secure data lake that has over 200,000 IoT sensors streaming real-time operational data from multiple markets,” he added.

From CIO to CDO

During his tenure at IBM, Friedman was responsible for a team of over 500 people, delivering more than US$5 billion in annual revenue by helping leading global and regional technology companies digitise their service delivery and solution platforms.

Friedman joined Sembcorp as Chief Information Officer, focusing on driving business growth through the digitalisation of business operations and processes.

“I also drive innovation through technology and technology investments at Sembcorp, and oversee the company’s efforts to build a secure technical and digital environment,” he said.

“When I first joined, I was immediately roped in to help conceptualise Sembcorp’s new strategy for 2018 and we quickly concluded that digitalisation would play an important role in the strategy.”

In addition, Friedman also led the Digital and Technology team to engage internal and external stakeholders on the overall digitalisation strategy, outlining how the plan will impact and aid the company’s overall growth and sustainability requirements.

“The next challenge was to build and develop a team of digital experts within the company,” he recalled. “For example, we built a team of about 20 data scientists in less than a year and have witnessed several advanced AI and ML applications being installed in our plants worldwide, optimising plant performance and improving efficiencies.

“What’s crucial for the team is to constantly engage our stakeholders so that they understand the value that digitalisation can bring to their areas of work.

“From automating repetitive processes such as data verification to migrating enterprise systems and applications to a highly secure cloud environment, these digitalisation efforts will help stakeholders do their job better and our plants function at a higher level.”