The energy sector stands at a crossroads. The 2020s have brought unprecedented volatility—extreme weather, geopolitical shifts, health crises, and an accelerating push toward decarbonization. For energy companies, the challenge is not just to survive this upheaval, but to thrive by modernizing their value chains, improving efficiency, and enabling digital transformation. At the heart of this transformation lies a critical imperative: breaking down internal data and organizational silos to build a connected, agile, and future-ready value chain.
Decarbonization and digitalization are reshaping the energy industry. Regulatory frameworks like the U.S. Inflation Reduction Act and the EU Renewable Energy Directive are driving massive investments in renewables and sustainability. Yet, while long-term decarbonization offers the promise of profitability—Oxford University estimates a $12 trillion global saving by 2050—energy companies must also deliver short-term profits to fund this transition.
Achieving this balance requires a holistic, cross-functional approach to the value chain. From production and wholesale to distribution and retail, every link must be optimized not just for efficiency, but for agility and innovation. This is the essence of value chain modernization (VCM): adopting new business practices and digital technologies that enable organizations to operate as integrated, data-driven networks rather than isolated silos.
Despite the clear need for change, many energy companies remain hampered by three types of silos:
These barriers are not just technical—they are cultural and structural. When each division measures success by its own metrics, opportunities for value creation in the gaps between silos are lost. As one industry leader put it, “People are often incentivized to make money for their silo, not the company as a whole.”
Overcoming silos is fundamentally a leadership challenge. Executives must empower teams to make decisions in the interest of the entire organization and align incentives accordingly. This means:
While individual champions can drive change, sustainable VCM requires systematic, technology-enabled processes that outlast any one leader. Digital platforms are essential to bridge silos, unify data, and enable real-time, organization-wide decision-making.
Digital transformation is the backbone of VCM. Yet, many energy companies are still in the early stages of building the digital infrastructure needed to support a connected value chain. Key enablers include:
AI, in particular, is emerging as a critical tool. It can detect anomalies, forecast outages, and optimize the integration of variable renewable sources. As the International Energy Agency notes, without AI, utilities will miss out on much of the value offered by new digital technologies.
To modernize the value chain and enable the energy transition, companies should focus on three actionable priorities:
Data is one of the most valuable assets an energy company possesses. Bridging data silos unlocks hidden value, enables unified decision-making, and fosters collaboration across the organization. This requires:
VCM thrives when everyone is incentivized to spot and seize value opportunities for the broader organization. Aligning metrics, rewards, and learning programs around value chain outcomes ensures that collaboration is not just encouraged, but rewarded. Technology should support—not replace—this cultural shift.
The energy transition is opening new opportunities for commercialization, from renewables and carbon credits to EV charging and smart retail. However, scaling these opportunities requires an agile, resilient value chain that can pivot quickly. Companies should:
Digital platforms are the connective tissue of the modern energy value chain. They enable seamless data flows, real-time analytics, and integrated operations across production, trading, distribution, and retail. AI amplifies this by providing predictive insights, automating routine decisions, and optimizing complex, multi-variable systems—crucial for managing the intermittency of renewables and the complexity of modern grids.
Blockchain and smart contracts are also beginning to play a role, particularly in automating and securing transactions between partners. For example, platforms like VAKT are reducing post-trade processing costs by up to 40% through digitalization and automation.
Technology alone is not enough. True value chain modernization requires organizational innovation—rethinking structures, processes, and cultures to support cross-functional collaboration. This may mean:
The energy industry is facing its greatest transformation yet. Striking a balance between traditional operations and new, green ventures—while embracing a more consumer-centric, agile approach—is complex but essential. Value chain modernization is the key to unlocking hidden value, surfacing new opportunities, and building resilience in the face of ongoing volatility.
By breaking down silos, investing in digital and AI capabilities, and aligning incentives around shared value, energy companies can position themselves not just to survive, but to lead in the era of decarbonization and digital transformation.
Connect with Publicis Sapient
Publicis Sapient partners with global energy organizations to design and deliver the next generation of digital value chains. Our holistic, data-driven approach empowers clients to reimagine their products, experiences, and operations for a connected, sustainable future. To learn more, visit publicissapient.com.