Outlook 2025: Energy Sector to Increase Investments in Asset Optimisation Tech

Vijay Jaswal, Chief Technology Officer, APJ, ME&A, IFS, says industrial AI will be deeply embedded into core manufacturing systems in 2025

How did the industry and your company fare in 2024, and what were the key highlights?
Our key highlights in 2024 were:

• Q1 2024: IFS reported its best first-quarter results, with Annual Recurring Revenue (ARR) increasing by 26% year-over-year (YoY)
• Copperleaf Technologies Inc.: IFS completed the acquisition of this global leader in strategic asset management and asset investment planning (AIP), enhancing its capabilities in asset management
• IFS Cloud 24R2 Release: Unveiled at IFS Unleashed 2024, this release introduced over 60 AI-powered features, facilitating the adoption of Industrial AI at scale for customers
• IFS was named a Customers’ Choice in the 2024 Gartner® Peer Insights™ Voice of the Customer for Cloud ERP for Product-Centric Enterprises. Additionally, it ranked #1 for Enterprise Asset Management (EAM) market share in the Gartner Market Share: All Software Markets, Worldwide, 2023 report for the third consecutive year.

What opportunities do you foresee for 2025, and how do you plan to leverage them?
IFS will be adding more Industrial AI use cases to its portfolio to further support and enhance the efficiency of our customers in their day-to-day operations. IFS anticipates that by 2025, Industrial AI will be deeply embedded into core manufacturing systems, driving efficiency across all levels. This integration is expected to enhance production optimization, energy management, predictive maintenance, and demand planning, significantly improving agility and operational efficiency.

IFS has pledged to achieve carbon neutrality by 2025, reflecting its dedication to environmental responsibility. This commitment is part of a broader sustainability strategy to improve the company’s operations, support customers’ sustainability goals, and positively impact society. IFS forecasts that by 2025, 80% of construction firms will prioritize standardization of processes, data structures, and materials.

This approach enables repeatable, efficient operations across projects and geographies, enhancing productivity and project control. The energy sector is expected to see a significant increase in investments in asset optimization technology, with a 15% rise anticipated to support data-driven decision-making. This investment aims to enhance asset performance and operational efficiency.

Which emerging technologies do you believe will be in high demand in 2025, and why?
The extra computing power of Quantum Computing will drive multimodal AI (processing larger models with multiple data sources). This in my opinion will be the largest advancement. Extended Reality (XR) which is the convergence of Augmented Reality, Virtual Reality and Mixed Reality will create more immersive experiences that have numerous applications in the workplace. Imagine an example where an engineer has to be trained in how to put out a fire in an oil refinery – through Extended Reality this training can be completed in a safe environment.

What will be your primary focus areas and strategic priorities for 2025?
As of December 2024, IFS has outlined several strategic priorities and focus areas for 2025:

Sustainability and Decarbonization
IFS is committed to achieving carbon neutrality by 2025. Their decarbonization strategy emphasizes:

1. Reducing Emissions: Implementing measures to lower emissions across operations.
2. Replacing Energy Sources: Transitioning to greener energy alternatives to minimize Scope 1 and 2 emissions.
3. Engaging Stakeholders: Collaborating with customers, suppliers, and partners to reduce value chain emissions (Scope 3)

Technological Innovation

IFS plans to integrate advanced technologies into its offerings:

1. Industrial AI: Enhancing products with AI capabilities to improve efficiency and decision-making.
2. Asset Lifecycle Management (ALM): Following the acquisition of Copperleaf in 2024, IFS aims to provide end-to-end ALM solutions, enabling clients to optimize asset performance and capital planning.

Service Industry Transformation
IFS is focusing on revolutionizing service delivery by:

1. AI Integration: Leveraging AI to enable autonomous, intelligent, and context-aware interactions, providing personalized responses and task execution.
2. Workforce Optimization: Addressing global skills shortages by promoting workforce flexibility and utilizing AI-powered scheduling optimization.

These strategic initiatives reflect IFS’s commitment to sustainability, technological advancement and service excellence as it moves into 2025.

Are there plans to explore new markets or introduce new products/applications to your portfolio in 2025?
As of December 2024, IFS has announced several strategic initiatives for 2025, focusing on both market expansion and the introduction of new products and applications:

Market Expansion
IFS anticipates that by 2025, 60% of construction and engineering companies will diversify their business models. This includes exploring new revenue streams such as facilities management, modular construction, and rental models. IFS aims to support these companies with robust digital infrastructure to manage diversified operations effectively.

New Products and Applications

1. Industrial AI Integration: IFS is enhancing its offerings with over 60 new Industrial AI capabilities available in IFS Cloud 24R2. These features are designed to optimize manufacturing processes, service management, asset performance, and sustainability efforts.
2. Asset Lifecycle Management (ALM): IFS has introduced the market’s first end-to-end ALM solution, enabling asset-intensive companies to achieve unprecedented accuracy and resiliency in project planning and execution. This solution is expected to increase capital efficiencies and improve maintenance capacity by up to 30%.
3. AI-Driven Enhancements for Energy Sector: IFS has released next-generation, AI-driven product enhancements to help oil and gas organizations improve efficiency and sustainability. These advancements include modern usability features, enhanced security, and open data access, all powered by IFS.ai.
4. Sustainability Management Module: In collaboration with PwC, IFS has launched a new sustainability management module to support customers in meeting Environmental, Social, and Governance (ESG) disclosure challenges. This module is designed to help businesses navigate new regulatory requirements and achieve their sustainability goals.