{"id":12744,"date":"2020-04-28T11:45:32","date_gmt":"2020-04-28T15:45:32","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/shell-investments-in-digital-transformation-to-reduce-impacts-of-covid-19\/"},"modified":"2020-04-28T11:45:32","modified_gmt":"2020-04-28T15:45:32","slug":"shell-investments-in-digital-transformation-to-reduce-impacts-of-covid-19","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/shell-investments-in-digital-transformation-to-reduce-impacts-of-covid-19\/","title":{"rendered":"Shell: investments in digital transformation to reduce impacts of COVID-19"},"content":{"rendered":"

Company background<\/u><\/strong><\/p>\n

Shell is an international energy company with revenues of $345 billion and net income of $16.4 billion. The company, with 83,000 employees in more than 70 countries, has set three ambitions: thrive in the energy transition, provide a world-class investment case, and sustain a strong societal license to operate [1]. The company creates shareholder value by i) exploring for crude oil and natural gas, ii) developing new crude oil and natural gas from major fields, iii) cooling natural gas to produce liquified natural gas, iv) supplying and trading oil, gas, and other energy products such as electricity, and v) having a portfolio of refineries and chemical plants that produce a wide range of products. In this article, I discuss how COVID-19 impacts Shell\u2019s business and recommend how the company can leverage digital innovation to continue growing.<\/p>\n

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Impact of COVID-19 on Shell\u2019s business<\/u><\/strong><\/p>\n

COVID-19 has impacted importantly operations-intensive companies like Shell. Social distance norms to reduce the propagation of COVID-19 affect the way in which Shell operates its businesses. Digital technologies will play a critical role on keep operations running and on boost the efficiency of Shell\u2019s traditional business.<\/p>\n

In addition, COVID-19 has impacted the demand for oil, resulting in plummeting oil prices [2]. This effect is amplified by the Russia-COPEC price war. The impact of COVID-19 on the demand for oil, brings an opportunity for Shell to continue diversifying its portfolio. In the last decades Shell has invested in new businesses to reduce the impact of external shocks. The effects of COVID-19 reinforced the need to diversify its business. In fact, amidst the virus outbreak, Shell announced that the company has set itself an ambition to become, by 2050 or sooner, a net-zero emissions company. To diversify its portfolio and become less dependent on oil prices, digital technologies will play a critical role.<\/p>\n

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Leveraging digital innovation to grow<\/u><\/strong><\/p>\n

Digital innovation will help the company to improve its growth in the traditional and new business and reduce the impact of COVID-19.<\/p>\n

Traditional business<\/strong><\/p>\n

In the traditional business, digital innovation can help to keep operations running and boost its efficiency.<\/p>\n