When Ford built Model-T, and more recently Apple, and Tesla had one thing in common – when they made bold moves in design and engineering, they relied on vertical integration and built things in-house. This strategic approach, central to their groundbreaking success, contrasts sharply with the utility sector’s heavy reliance on external contractors for design-build functions. Given that the industry was largely in production, delivery and maintenance mode for the last few decades – design-build was not a core capability and it made sense to outsource.
However, the utility industry stands at a crossroad, necessitating a re-evaluation of its approach to capital expenditure. Given the Capex to be delivered over the next decade, and given its strategic importance (from asset upgrades, digitization, to accommodating changing load patterns) – it is about time that there is a serious rethinking of focusing on capability acquisition/building in capex portfolio management, design, sourcing, risk reduction, and capital projects execution.
#EnergyIndustry #Utilities #Strategy #UtilitySector
