by Greg Guthridge, Managing Director Accenture Utilities Asia Pacific
For years, ‘digital’ has been heralded as the disruptive solution that will allow organisations to drive growth and transform their operations, but the digitalisation of utility operations needs to be handled with care in order to avoid digital disappointment.
In the utilities marketplace, digital capabilities can be leveraged across the entire value chain – energy generation, transport, distribution and consumer demand.
According to a recent report by Accenture, 80 per cent of utilities and energy providers plan to increase or maintain investments in digital capabilities to manage costs and enhance revenues.
Most digital investment strategies also focus on engaging energy consumers who, on average, are 20 per cent more likely to buy additional related goods and services using a digital channel.
Digital adds value when enabling people and capabilities. For instance, while email may be the current default tool for collaborative communication, technological advancements in video, social media and the Industrial Internet of Things all represent new opportunities to enhance teamwork and partnerships.
In addition, analytics capabilities in real-time processing, visualisation and alerting demonstrate the huge potential organisations have to respond to customer behaviour.
Lastly, energy self-sufficiency, storage, distributed generation and microgrid usage are all set to grow in importance over the next few years, creating new areas of opportunity for energy providers.
In light of this, the benefits of digital enablement have sparked great expectations, particularly amongst a new generation of customers entering the market – and as a result, a new benchmark has been set.
Millennials are set to become the largest energy consuming cohort by 2020 and more than any other generation, they expect strong digital experiences from their energy providers.
According to Accenture’s recent New Energy Consumer survey, 75 per cent of Australian millennials are likely to consider switching to a different energy provider if their provider is not able to provide a seamless digital experience.
These expectations are particularly impactful in an environment where traditional business models are eroded by new threats.
Today, the energy market confronts ongoing challenges posed by falling energy prices, the reduction in demand, increased cost of customer service and an emergence of new energy technologies. These challenges all represent a catalyst for change.
Given the undeniable value organisations place on harnessing digital, the question remains; how can organisations prevent themselves from suffering ‘digital disappointment’?
In order to optimise investment and deliver better digital solutions, energy providers must alter existing workflows and processes and overcome concerns about physical and cyber security.
In order to minimise ‘digital disappointment’, organisations should consider the following:
- Avoid the age old “build it and they will come” approach where technology is deployed without a strong emphasis on changes to underlying business practices and workplace capabilities.
Network operators will struggle to maintain their relevance unless they adapt to new models and offer more than just basic infrastructure while quickly expanding their range of services.
New market entrants that prioritise digital are constantly sprouting up in Australia to meet the needs of the digitally savvy citizens. For instance, Telstra is entering the energy market by leveraging its capabilities to provide users with a bundled value proposition.
- Adopt a 360-degree holistic approach that is human-centered in advancing technological changes alongside culture, marketing, process change and governance structures.
For today’s energy consumer, energy is no longer just a commodity. It has become an expression of who they are and what they value.
As consumer attitudes shift toward greater alignment with their personalities and values, leading energy providers can engage consumers looking for more than a core product. They can generate interest in broader lines, such as connected products and services.
- Incentivise employees and consumers to achieve a positive attitude towards digital transformation as well as encourage innovation. The ability to understand changing customer needs and behaviours is, of course, vital.
But the real deciding factor in the era of intelligence will be a company’s ability to evolve its corporate culture to not only take advantage of emerging technologies but also, critically, embrace the new business strategies that those technologies drive.
Enable short-cycle investments based on insights derived from a more robust and ongoing analytics capability. Establish a baseline of current performance levels to ensure benefits and capabilities can be calibrated.
- Use digital capabilities to simplify the experience of customers, employees and shareholders alike. People are now continuously online, moving seamlessly among the web, phone and social media whilst messaging across multiple devices.
Digital services should be designed so that regardless of the channel the consumer is using, the customer experience stays the same and is easy to complete. Ideally, the transition from channel to channel should also be as simple and seamless as possible.
These steps work to meet growing customer expectations, ease the transition towards a new generation of capability and enable ongoing growth across the energy market.