Massive technology changes, never seen or experienced before are revolutionizing the businesses with advent of the new wave of digital innovation. From cloud computing to mobility, to big data analytics, IoT, machine learning, and artificial intelligence, these technologies have completely transformed the business landscape irrespective of the industry— banking, retail, telecom or utility alike. The pace of this technological advancement is growing exponentially, establishing new business models and creating tectonic shifts in market dynamics.
The technology-savvy and digitally connected customers of today are further forcing businesses to take cognizance of their preferences, expectations and consumption trends. Unless business aligns their approach and processes with this customer centric approach, survival may be thwarted in the competitive landscape.
Today, the energy and utility industry grapples with its unique set of challenges comprising aging infrastructure, workforce retention and recruitment, widening demand-supply deficit, evolving regulatory mandates, stricter environmental compliances, need to increase grid resilience, and economic and social ramifications. Ultimately, utilities face the risk of disintermediation of their relationship with the customer, allowing new entrants to capture the value, while they are left holding the costs.
For utilities to meet these challenges while delivering quality service and sustaining their financial viability, it is paramount to reexamine their approach technology and digitalization. While the traditional energy and utility industry had been a relatively slow adopter of technology compared to other sectors, nonetheless, it has picked up pace in last couple of years. The energy and utility companies today are beginning to comprehend the value of digital innovation and its impact on improving their operational efficiencies, boosting service levels, reducing costs and most importantly on increasing customer satisfaction. This has led them to explore the opportunities extended by adopting latest technologies such as cloud, mobile, big data, predictive analytics, IoT, machine learning, artificial intelligence, robotics and others. The industry is now quick to leverage latest innovations to modernize processes, gain efficiencies and gain customer confidence.
By adopting a “mobile-first” strategy, the utilities can enable real-time connectivity with customers and their workforce alike – from anywhere, anytime and using any device. This has empowered customers who can easily manage or monitor their real-time and historic usage, and make better choices based on data-backed insights. They can conveniently plan and manage their bills and payments with increased ease and flexibility. The utilities can use mobile technology to become proactive in sending alerts, notifications and personalized communication to the customers. It can also boost the workforce productivity and efficiency by equipping them with on-the-go updates using mobile devices. Driving customer engagement can help utility increase customers’ adoption for energy efficiency and water conservation programs. This in turn is a win-win for both – the customers who save on resources as well as on bills, and even the utility which is able to manage peak loads and optimizing resources; thereby also meeting the state mandates.
However, this digital shift poses another set of complexities for utility industry – huge quantum of customer data, lack of in-house technical expertise, implementation risks, integration complexities and ongoing support concerns. Thus, for utilities, the adoption of technology and solutions necessitates a strategic outlook rather than tactical detours focused on quick fixes.
The industry must carefully assess and evaluate the “build vs. buy” adage to be able to deploy technology or solutions which are a best-fit for their business requirements and are also cost-effective and efficient. They must look for solutions that can easily integrate with existing legacy systems, require minimal deployment cost and can deliver faster returns on investment. Since, customers today are prime drivers of change; another important consideration for the utility industry must be customer adoption rate. The customers are doubtlessly more technology savvy today, but adoption rate depends upon how user-friendly a platform is, and does it offer self-service capabilities. Similarly, how quickly and easily the utility workforce can familiarize with the solution and can use it address customer concerns. Carefully weighing these considerations can help the industry truly leverage the emerging technologies and thrive on the wave of digitalization.
The acceleration of digital transformation in the utility industry has predictably driven an upsurge in the number of service providers offering technologies to address these needs, each with their unique value proposition, but generally focused on only a small sub-set of the overall challenge. Thus, the utility companies must be cautious while identifying their digital transformation partners’ basis not just the technical competencies but also ensures both are aligned in terms of long-term architectural compliance and are driven by a shared goal to build the utility’s primacy with its customers.
As more and more utilities adapt and adopt emerging technologies, CIOs have an important role to play as they must carefully balance long-term and short-term deployment decisions. With the evolving utility-customer relationship, they must probe areas where digital can help them strengthen relationship with customers, while improving operations, bridging organizational siloes, and developing topline opportunities. Indeed, digital transformation opens arrays of opportunities for utilities, but, success will require a significant investment in new talent and capabilities, and careful prioritization.
About the Author
Eric Dresselhuys is the President at Smart Energy Water (SEW). He has been contributing in the energy, utility and infrastructure industry for 20 years. With his domain know-how, technical expertise and business acumen, Eric is responsible for the overall strategic outlook and business development at SEW. Over the years he has played a leading role working with utilities across 5 continents to help guide their digital transformation. Eric is a well-known speaker thought leader across the energy, utility and infrastructure industries.