Isabelle Kocher: “We draw our inspiration from the major players in the digital world”
Transforming the world of energy through digital technology is the aim of ENGIE Digital, a new Group structure that has been set up for employees and partners of ENGIE. In an interview published by the magazine L’Usine Nouvelle on November 3, 2016, ENGIE CEO Isabelle Kocher discusses the implications of this new hub dedicated to digital innovation.
On October 5, ENGIE’s CEO had a big smile when she walked about the new, completely laid-back premises of ENGIE Digital. There is a vast open space, interspersed with meeting rooms that seem more like workspaces in start-up companies than those of a multinational group with revenues of more than 70 billion euros. This design studio is located on rue de Londres, in Paris’s 8th arrondissement “right next door to the offices of Google France,” as they like to point out in this major energy company. The young-spirited, eye-catching location is the symbol of the huge digital transformation that has taken place in the group since Isabelle Kocher became its COO.
ENGIE Digital combines two major activities. The Digital Factory is a true software factory where the company’s software developers and those of its partners get together to roll out the IT tools required by their staff in the field, industrial processes and customer relations. The new unit will incorporate a “hub” where the energy company’s various divisions and businesses can come and submit their needs so they can work out the cross-company means for meeting those needs. In comparison with ENGIE’s 160,000 employees, ENGIE Digital is a very small unit, with some fifty people.
Nevertheless this organization is destined to be key to the multinational company’s growth, since Isabelle Kocher has announced that 1.5 billion euros will be devoted to the company's digital transformation over 2016-2019. A sister organization will be developed very quickly in the USA in order to take part in the group’s major ambitions for energy services, solar power and storage. “Part of the world’s innovation takes place on the other side of the Atlantic. ENGIE must be over there too,” states Yves Le Gélard, ENGIE’s Executive Vice President, Chief Digital Officer and CIO. ENGIE Digital must focus on five major areas: big data (used in predictive maintenance), mobility, the Internet of Things, open IT systems, and cybersecurity.
A plan with 30 major projects
ENGIE has just started the second chapter of its digital transformation. The first one goes back three years. “It was initiated by Gérard Mestrallet [Ed.: ENGIE’s former Chairman & CEO, now non-executive Chairman]. It involved launching 300 initiatives with a great deal of autonomy within the company’s various organizations. The field where the most progress has been made is in mobility and mobile apps for technicians,” Yves Le Gélard notes. The second chapter started on May 4 of this year, when Isabelle Kocher took over at the head of the company. Her trademark? An avalanche of extremely constructive major partnerships with digital specialists. The first was with Fjord, a subsidiary of Accenture, for developing customer relationship interfaces. The second was with the US company Koni, which specializes in portability (the capability of a software program to work on all types of system). The third was made with big-data specialist C3 IoT. And the fourth was with the giant Thales for ensuring the cybersecurity of all of the energy company’s facilities. In addition to these alliances, there are wider agreements with General Electric and IBM on topics concerning market access. “For each topic area, we wanted to partner with major global leaders. We are not afraid to work with the best companies, whatever their size,” Yves Le Gélard points out.
The purpose of creating ENGIE Digital, a unit that incorporates employees from ENGIE and its four key partners, is to organize 30 major projects likely to increase revenues and/or make savings over the medium term. The plan’s details remain confidential but they can be grouped into five focus areas: the change in the relationship with customers (to whom new “routes” must be offered, particularly via applications), stronger relationships with professional customers, improved industrial efficiency for energy production, participation in the rapid development of smart grids (which above all correspond to a world of data management) and managing big data for the optimization of asset portfolios.
Four questions to Isabelle Kocher
L’Usine Nouvelle. Since you took over on May 4, you have made a large number of announcements in digital technologies. Is that your priority for action?
Isabelle Kocher. Digital technologies are a powerful lever. Whatever the size of the project under consideration, they can help us go much faster. The group’s transformation is aimed at making ENGIE the pioneer of the new energy world. This is a world that is becoming more and more decentralized, where large networks and small production systems will cohabit, and where storage tools will be developed, along with consumption for self-use. To join it all together, we have to develop software. Our business as an energy company requires migration to digital technologies since, if we want to maintain our expertise as an integrator of energy solutions, we must invest massively in all components of the digital world: software applications, algorithms, data, the entire Internet of Things chain, smart storage modules, etc. We cannot remain a competitive energy company without mastering digital tools.
Will your competitors of the future be the giants of the digital world?
In this sector, we draw our inspiration from the major players in the digital world – such as Amazon – which historically are not players in the energy world. I want ENGIE to rhyme with new energy sources in the same way that Google rhymes with innovation. ENGIE’s mission is to detect, challenge and select the best possible technologies. We must structure this expansion, this effervescence of innovations, and be agile. We don’t know which technologies will assert themselves. The business models have not yet been stabilized. So we must stimulate in-house innovation and remain connected to the outside world, to inventors and innovators, and have a clear view of major trends, which are moving to a decentralized and highly digital world.
With all these digital partners, is there not a risk of dependence?
Quite the contrary, since we have chosen to control our digital destiny. We have made several partnerships rather than just one! Above all, we have created our own platform. ENGIE Digital is made up of 50% ENGIE employees and 50% from these strategic partners. We have identified the best in each major segment of the digital galaxy and have signed constructive global partnerships with them. That’s the logic behind our approach: our platform belongs to us and it welcomes the best skills in the world.
With this increasingly rapid transformation, is there not a risk of creating a two-speed ENGIE?
On the one hand, we have chosen to close down some businesses because they don’t fit into our energy transition on the long term. That is the case with oil production and coal-fired electricity generation. On the other hand, this ebullient digital innovation is present throughout the energy revolution. We must distinguish between two types of innovation: incremental digital innovation, which is already pervading all our businesses, in all group entities. Then there is disruptive innovation, the revolutionary business models that we will incorporate in ENGIE, a protected area where they can be developed outside the rules and regulations of a major group. Once they have taken off, they can go back to normal life at ENGIE. We have to rethink the way we work: the digital revolution should enable everyone to be more efficient, more cross-disciplinary, and more rapid.