According to the International Energy Agency (IEA), the world is in the midst of the first ‘truly global energy crisis’ (IEA World Energy Outlook in October 2022).
Pre-existing volatility and post-pandemic fall-out were exacerbated by Russia’s invasion of Ukraine. Almost one year on, the crisis shows no sign of abating. Disruption to supply chains makes supply and demand tightly balanced with constantly changing prices and availability. Consumption of energy is expected to triple by 2050, and there’s a huge emphasis on saving energy.
This is a global phenomenon. We know about the catastrophic impact of the war in Ukraine, the likely sabotage of the Nordstream gas pipeline between Russia and Germany, and the unpredictable weather the world is experiencing. But did you know that in South Africa, blackouts are increasing to 12 hours a day, threatening food and water supplies, that Harbour Energy – the largest North Sea producer is cutting significant numbers of jobs, and that last October 4.5 million UK households were in fuel poverty?
To meet the growing energy needs of an expanding global population, our planet needs a huge acceleration in deployment of solar and wind and other sustainable energy sources. Renewables are expected to account for 50% of the power mix by 2030 and 85% by 2050.
But renewables alone can’t power the transition to net zero carbon for at least the next 20 years, and demand for fossil fuels continues.
Amidst the cost of living crises, energy price hikes and cold weather are unhappy bedfellows. I’ve just come off a zoom call with a colleague who was wearing a hat, scarf and fingerless mittens to mitigate the effects of last month’s sky-high electricity bill. These days this seems like perfectly normal behaviour. Except for the very few, most of us are affected by the volatility of the energy market. Energy bills for both consumers and businesses are now sky high, potentially catastrophic at a time when budgets are stretched and margins are shrinking.
Around 53% of the UK’s SMEs or private firms with less than 250 employees are expected to collapse or reduce their activities during the current energy crisis, according to the Federation of Small Business. And it’s no walk in the park for larger firms either. Digital transformation still tops the energy industry agenda as lines between ‘traditional’ and ‘new’ energy suppliers are becoming blurred. Operational efficiency, automation and security are key to maximising budgets and minimising costs.
The Great Resignation was the phrase coined to describe the swathes of employees leaving their jobs during and post the pandemic. Having had a taste for remote or hybrid working, workforces the world over sought to take ownership of working practices. As a result, despite the volatile economy, talent is in short supply. Businesses – and energy ones are not different – need to attract and retain the best talent to weather this perfect storm.
At Four, we have tried and tested experience of helping businesses make the most of profits processes and personnel. Although these are unprecedented times, watertight contracts are a critical part of good business practices, and as energy sources and supply become ever more complex, our reliance on the contract is growing. Contract intelligence paves the way for effective operations, securing relations, saving money and freeing staff up to focus on tasks that drive sales and win business.
Contract management software can help. Taking the pain out of the day to day, full contract lifecycle management from Contract Insight, Four’s preferred contract management software solution offers:
- easier contract authoring with the seamless merging of contracts with templates from an organisation’s pre-approved clause and template library
- a centralised system for contract negotiation, contract collaboration and party review
- automated key date notifications and alerts for greater accountability
- robust risk assessment, risk mitigation and risk analysis tools
- robust process configuration and tracking for specific contract types for a wide variety of industries.
Contract Insight from Four Business Solutions
Contract Insight is a cloud-hosted (SaaS) or deployed (on-premise) contract management solution. It’s trusted by thousands of professionals for their contract management, document management, procurement and sourcing needs. Used by many Fortune 500 companies, Contract Insight gives you real time visibility into your contracts. It doesn’t just shore up your security; it will help you meet contract compliance regulations, centralise your contract management and improve your overall contract administration process. It won’t solve all the problems caused by today’s global energy crisis but it can certainly ease the pain.
For more information, contact John O’Brien, CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in Finance, Supply Chain and Operations, across a broad range of industries.