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Digital Transformation in Utilities

June 1, 2020
By ProArch

The world of utilities is changing. Despite being slow to begin digital transformation due to traditional, risk-averse cultures, the global utility sector is undergoing a wave of disruption.


According to Capita, there are four areas where the utility industry is experiencing disruption:

  1. Customers have had their expectations of good customer service raised by other sectors, like financial services. Consumers want personalised services that allow them to better understand their data. This means that utility companies who are not investing in new digital products are at risk from competitors who are.
  2. Companies who are not involved in utilities are nevertheless driving the rise of smart homes. Companies like Google and Amazon are merely at the forefront of a wave of new products and apps dedicated to helping people manage their homes using technology. It isn't just disruptors forcing the utility sector to change. The recent push towards home working prompted by lockdown may delay the roll-out but will only increase the urgency to empower households to better control their energy spend.
  3. Innovations from other sectors, such as bad debt mitigation, are being applied to the utility sector. The power of data in helping understand customer behaviour is of particular interest to companies keen to provide a good service in a more environmentally conscious marketplace.
  4. The utility sector is particularly reliant on business process outsourcing providers. These third parties are bringing their understanding of the modern best practice to how utility organisations operate. This isn't just theory or speculation. Many utility companies are beginning to implement digital into their operations. Thames Water is using asset monitoring to predict failure and either pre-empt mechanism failure or respond more rapidly when it happens. Many housing providers and utility companies are beginning to allow customers to more effectively track their energy usage and to submit complaints or service requests. Meridian, a New Zealand organization, is applying lessons from the world of data and allowing customers to control how much power they buy via subscription-based plans.
Therefore, other utility companies need to ask how they can use digital to transform their operations. Here are five ways that could happen:

1. Self-management applications:

Utility organisations can improve their customer service by creating self-service websites. These allow customers to easily make payments, add or remove services or change personal information. This reduces the need for large call centres, disliked by customers for not being a good customer experience and disliked by organisations for being a large and inefficient cost centre.


2. Predictive analytics:

Utility organizations are data-rich. That means they have huge opportunities to use data analytics to better understand and improve their operations. This might mean understanding how much ‘downtime' they experience, how long maintenance projects really take or by better understanding supply chains or seasonal trends.


3. Improved operational efficiency:

Strong Cloud and data strategies also hold the potential for a much more efficient organization. Leveraging data can help reduce duplication, improve automation and simplify tasks, ensuring that companies are more efficient and productive.


4. Disaster recovery:

When data is stored in highly available cloud environments, the risks of data loss or downtime significantly diminish. Modernizing and strengthening IT and OT security also can't be forgotten. Digital transformation, specifically advancements in AI, are driving development of tools that expedite threat detection and response.


5. Industry-specific innovation:

Many companies have applied innovation from other industries and used that to gain a competitive edge. As the utility sector becomes more comfortable with digital transformation, there will be space for them to invest in their R&D and use technology to solve problems unique to the sector.

The utility sector faces many challenges. Increased regulation, climate change and higher customer expectations are all making the industry a more difficult place to compete. However, digital can improve processes and provide a better experience to customers. It is time companies in the utility sector fully embrace digital transformation or risk getting swept away by more innovative competitors.

If you'd like to talk to ProArch about these changes to the utility and power generation industry, get in touch with us.

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