Owner/Operators in the energy & utilities sector must transform their business models to become more intelligent, efficient, and innovative in their management and delivery of capital programmes. Here’s how.

Meeting increasing complexity and scale requires an overhaul in approach

In the first instalment of our ‘Future of Capital Delivery’ series, we explored how owner/operators in the Energy & Utilities industry can unlock billions from capital delivery programmes by digitally integrating the delivery and asset management lifecycles.

To achieve this future marked by efficiency, sustainability, and innovation, Energy & Utilities owner/operators must become more intelligently integrated and lead their supply chains by developing internal capabilities to drive productivity at scale. To meet increasingly stringent regulations, fill resource gaps and more intelligently govern delivery of outcomes, owner/operators must look inward and assess which capabilities they lack, by looking outward to other industries.

Owner/operators must shift their focus from traditional service models to meet the largest and most ambitious period of infrastructure investment we have ever seen, and recognise that the majority of their business effort is now on the delivery and management of assets.

What’s driving the change in the role of the owner/operator in Energy & Utilities companies?

Traditionally, owner/operators are set up to be service businesses that have an operation and maintenance function. However, with the increasing complexity and scale of capital projects, capabilities must expand to capture the reality of where the majority of their resources are being utilised.

Most UK Water companies, for example, are doubling their capital delivery investment in AMP8 (commencing in April 2025), while in Energy Networks the scale of investment in clean energy is nearing £300bn with a hard commitment date of 2030. As such the scoping, delivery, and onboarding of new and upgraded assets is a major part of business operations and should be recognised in business models, capabilities, and technologies.

A more intelligent and integrated owner/operator is required to deliver at scale more efficiently and address several other factors:

• Technological advancements: From smart grids and advanced metering infrastructure (AMI), Common Data Environments (CDEs) and Generative design, digital technologies have transformed infrastructure delivery – enabling better whole lifecycle performance. Owner/operators must leverage them to stay competitive and understand how to deploy these technologies in their existing asset base.
• Increased complexity: Modern capital projects are more complex than ever before – involving multiple stakeholders, intricate supply chains, and stringent regulatory requirements. Owner/operators should navigate this complexity by developing new capabilities and collaborating, seamlessly integrating more closely with their supply chains and driving them to innovate.
• Productivity and sustainability: The construction sector lags behind other industries, such as manufacturing and agriculture, as it has not used the power of digital to transform ways of working in the way those industries have, delivery of construction remains largely unchanged since the early 1900s. This has an impact on sustainability and resilience in capital projects, where waste, over-specification and over-runs are a drain on resources. By considering the entire lifecycle and using digital to drive new ways of working, not just making existing methods faster, we can turn the dial-up on both productivity and sustainability.

How should owner/operators transform their business models?

To adapt to these changes, owner/operators can transform their business models through these key steps:

• Supply chain capabilities: Traditional supply chain models and capabilities are not enough to drive the level of productivity and outputs required. New partners should bring innovation to the entire delivery enterprise and elevate performance across the value chain. Delivery partners should be incentivised to collaborate, be there for the long term and have skin in the game to deliver the outcomes intended, not just the project.
• Supply chain integration: Supply chains are now too large to be driven by individual relationships and manual processes. Digital Integration involves enabling better communication, collaboration, and productivity through aligning systems and processes to avoid wastage, duplication, over-runs and delays that lead to non-value add costs. For instance, using Common Data Environments to quickly share asset, project, and commercial data with supply chains – enabling improved collaboration, change management, and delivery efficiency.
• Adopting a manufacturing mindset: Looking to other industries that leverage tools like Common Data Environments, Generative design, AI agents for automated scheduling, Supply chain automation, 4/5-D dynamic planning for informed decision-making and to more intelligently manage all phases of the delivery lifecycle. These technologies enable the onboarding of intelligent assets into the operational business and the information required to operate them optimally.
• Focus on sustainability: As stewards of the natural environment and critical national infrastructure, owner/operators must prioritise sustainability in projects. This involves adopting green building practices, using sustainable materials, and implementing carbon-efficient systems. Additionally, considering the long-term environmental impact of projects incorporating resilience measures can help ensure asset sustainability. Improved upfront decision-making and greater overall intelligence can enable increased investment in non-traditional and nature-based solutions, which have proven to be more capitally efficient and sustainable than traditional civil infrastructure.
• Owner/operator capability development: All of the above is underpinned by becoming an intelligent client, having the core capabilities to deliver large programmes, achieve outcomes and onboard and operate an intelligent asset base. Owner/operators must conduct a thorough capability assessment to identify gaps in systems, people, and processes by looking to other industries that have transformed their productivity. For example, how can capabilities from manufacturing improve asset and programme performance? What does this mean for the kinds of skills and systems owner/operators need?

What is the role of the Digital Delivery Partner in this future?

In this new landscape, the role of the Digital Delivery Partner (DDP) becomes increasingly important. The DDP is the delivery enterprise performance catalyst, a new kind of partner who is focused on delivery of outcomes and the increase in performance of each area of the delivery enterprise, unifying people, processes, and technology.

Previously, supply chain partners provided the capability and technology to deliver capital programmes, but due to the startling scale and complexity of UK infrastructure investment, scaling the current supply chain and delivering the same but faster, is not enough. A new kind of partner with a Digital Engineering pedigree is needed to provide a step change in efficiency.

The DDP enhances project outcomes, and identifies and drives value, predictability, and performance across all lifecycle stages:

• Digital enablement: Driving a digitally connected, collaborative workforce for people to thrive in a changing digital landscape.
• Digital continuity: Driving an intelligent, integrated, optimised model for seamlessly orchestrating processes across complex supply chains in a digitally-enabled landscape.
• Digital ecosystem: Owning the Enterprise Digital Ecosystem, integrating best-in-class digital tools across programme management, supply chain, costing, planning and scheduling, engineering execution, construction and commissioning and bringing specialised knowledge in digital technologies and data analytics to drive new ways of working using these tools.

A holistic DDP can bring a wealth of capabilities to a consortia of traditional civil delivery partners across the entire design and build lifecycle.

Specifically, they add value in the areas of:

1. Portfolio and Delivery Management:
   
   
   • Intelligent delivery planning: Using the Asset Information Model to drive enhanced decision-making by giving the business access to insights from asset data.
   • Product mindset: Using previous successful projects to drive efficiencies and adopt a product management approach to delivering new assets.
   • De-risk alternative interventions: Providing improved asset data and a product-based approach delivers efficiencies for traditional projects, freeing up capacity to tackle the big problems and allowing time to de-risk and promote alternative digital and natural interventions.
2. Design Phase:
   
   
   • Digital design tools: Providing access to collaborate in software for 3D modelling, Information Management, and geospatial analysis. This facilitates collaborative design, clash detection, and cost optimisation, speeding up time to site and accelerating the delivery of outcomes.
   • Data analytics and visualisation: Transforming complex project data into actionable insights. This allows for data-driven decision-making and proactive risk mitigation.
   • Virtual Reality (VR) and Augmented Reality (AR): Implementing VR/AR tools for design visualisation and stakeholder engagement – enabling better communication of project plans and identification of potential issues early on.
3. Build Phase:
   
   
   • Construction management software: Offering cloud-based platforms for project scheduling, resource allocation, and performance tracking. This streamlines communication, improves transparency, and facilitates collaboration across the consortia.
   • Digital workforce management: Utilising digital tools to manage a skilled workforce effectively. This can include skills gap analysis, training management, and real-time worker location tracking for improved safety and efficiency and dynamic task scheduling.
   • IoT and sensor integration: Deploying IoT sensors for real-time monitoring of site conditions, material usage, and equipment performance. This allows for proactive problem-solving and data-driven adjustments to the construction schedule.
4. Lifecycle Management:
   
   
   • Digital document management: Creating a centralised platform for storing, sharing, and version control of all project documents to ensure they become governed at an asset level. This ensures easy access, improves collaboration, and reduces the risk of errors.
   • Truly digital operating manual: Providing the business with information digitally integrated with Asset Management systems, meaning uncontrolled printed folders and PDFs are replaced with trusted and change-managed as-maintained asset data.
   • Data analytics for future projects: Leveraging data collected throughout the lifecycle to inform future projects undertaken by the consortia. This allows for continuous improvement and better decision-making across projects.

Overall, this approach drives significant benefits:

• Increased efficiency and productivity: Digital tools can streamline workflows, automate tasks, and improve communication, leading to faster project completion and reduced costs.
• Improved collaboration: A holistic digital platform facilitates seamless communication and data sharing between all partners within the consortia.
• Enhanced risk management: Data analytics and real-time monitoring allow for proactive identification and mitigation of potential risks throughout the lifecycle.
• Innovation and future-proofing: Exposure to cutting-edge digital tools keeps the consortia at the forefront of the construction industry and opens doors for future innovation.

By working with a Digital Delivery Partner, Capital Delivery Enterprises can predictably meet outcomes set by regulators and do their very best for customers and shareholders by leveraging digital technologies throughout the design and build lifecycle.

Our parting thoughts

The future of capital delivery in the energy and utilities sector requires a more intelligent and integrated approach from owner/operators. By transforming their business models, developing new capabilities, and leveraging digital technologies, owner/operators can deliver projects more efficiently and effectively. The role of the Digital Delivery Partner is crucial in this transformation, providing the expertise and support needed to navigate the complexities of modern capital projects, and providing a digital layer between clients and their supply chain partners.

Traditional approaches – engineering your way out of it – will most likely fail in truly delivering a step change in performance, it will just be more of the same. In the 21^st century, a digital-first approach – digital engineering with traditional construction engineering capabilities – is needed to shift the dial in construction delivery.

Capgemini is perfectly aligned to take the role of the Digital Delivery Partner – with our unique blend of deep industry expertise and end-to-end approach to transformation. Get in touch to understand why Capgemini is your number one trusted business and technology transformation partner. Helping you use more data-driven and digital practices to increase the productivity of each individual resource and pound spent, bring in new types of thinking, and meet the greatest infrastructure challenge of our generation.

We’ll be further exploring this thinking in our What’s Now | Constructing Tomorrow event. Check that out here