With new digital technologies entering the market, the utilities industry is facing increasing pressure to improve both operational performance and customer relationships, and adopting a strategy to incorporate these technologies is imperative.
In 2016, a report by IDC Energy Insights found external pressures on utilities for digital transformation are huge.
“As consumers are empowered by the proliferation of IT interfaces and multiplication of communication types, their expectations for borderless everything-anytime-anywhere, customer-centric interaction are profoundly redefining the nature of services,” it said.
Because of these heightened consumer expectations, start-ups and “digitally transformed companies” are turning energy consumers’ heads away from their traditional utility provider.
The report found the biggest threat that utilities face today is from outside the industry, from non-utility companies which have brands with better consumer appeal, stronger ability to extract value from data, deeper relationships with their customers, and are digitally more mature.
For example, according to a 2015 study by J.D. Power, of 66 US electric and natural gas utilities, while 57 offered an online mobile channel for customers, satisfaction among the customers using their utility’s mobile website or app was lower than among those using the website from a desktop.
Andrew Heath, Senior Director at J.D. Power, said, “Unfortunately, utilities are not meeting customer expectations when it comes to the mobile experience.”
For the next generation of consumers, who are used to interacting with their business providers via smart phones and tablets, this will not be good enough.
So what’s a utility to do? It all begins with a comprehensive digital strategy.
Three focus areas for digital transformation
For utilities, there are three core areas in which digital transformation occurs:
- Transformation of the customer experience
- Transformation of the workplace
- Transformation of technology and information
According to IDC Energy Insights, “The new reality for utilities business leaders is that they need to transform and lead digitally powered organisations that are not only adaptive to change but also able to predict and drive the change.”
Furthermore, according to PwC, “Top-performing companies are more deliberate in their digital strategy, innovation, and execution. They are more likely to have CEO commitment, strategic clarity, and shared understanding.
“They are more apt to take a broad view when applying technology and identifying sources of innovation. And they are more prone to being skilled at turning their data into insight, proactive in cyber security, and consistent in measuring outcomes from digital investments.”
Developing a digital strategy
There are three fundamental steps involved in developing a digital strategy.
Step 1 – Assessing Capacity for Transformation
Gauge the scope of change needed and the ability of the organisation to take the leap necessary to make the change.
Step 2 – Building a Strategy
Transformational efforts typically fail due to the lack of a clear strategic approach and poor execution. Building a clear strategic approach and executing it well will allow for a smoother transformation.
Step 3 – Executing your Strategy
You have assessed your capacity for digital transformation, and determined and refined your digital strategy roadmap. You are now ready to execute your plans.
How to get started
As the utility industry continues to change at a rapid pace, it is more important than ever that utilities take on digital transformation as a critical business initiative. Utilities must be ready to adopt new technologies and use those technologies to uncover value.
Turning the challenges of digital transformation into digital opportunities requires an industry partner who is uniquely positioned to understand your enterprise needs in full, not just in part.
Today’s electric, gas and water utilities need software applications and technology to serve as a robust springboard from which to meet the challenges of the digital future. And they need solutions to be delivered more quickly, at lower cost and risk to their organisations. That’s what Oracle Utilities offers.
Oracle Utilities is a software partner for utilities around the globe, providing leading-edge, value-driven innovation that is crucial for utilities embracing transformation.
Oracle Utilities brings together a worldwide team of utility experts who understand your business, software applications that address mission-critical needs, a rock-solid suite of corporate operational software, high performance servers and storage, and world-leading middleware and technology.
The result: proven, flexible innovative solutions with faster implementation times that improve customer experience and enhance operational efficiency to help today’s electric, gas and water utilities achieve performance excellence.
This partner content is brought to you by Oracle. For more information about how Oracle can help you successfully implement a digital strategy read the white paper here.