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How Digital Transformation is Disrupting the Utilities Industry

Jun 27, 2022



Digital transformation in utilities – When you think of digital transformation you probably consider the banking and finance sectors that are already a decade through digital.


However, despite utilities being perceived as behind with innovation due to slow adoption rates, aversion to risk, traditional work practices and an ageing workforce; things are about to change as a new wave of disruption hits the utility industry in Europe and US.

A recent study by Capita, Five Years of Challenge and Change: Payments, Collections and Recoveries in the Water Industry, outlined some of the disruptions which lie ahead for the utility industry:

  1. “The changing behaviour and expectations of consumers in their day-to-day interactions”. More and more customers are now looking for personalised services, in particular, an “omni-channel approach” which allow consumers to view all of their data in one place. This will mean plenty of utility companies will need to look at their digital capabilities or risk being left behind by competitors who are able to provide this for their customers.
  2. This also ties in with the rise of “smart homes”. There are now a plethora of apps and devices dedicated to “smart homes”, with the likes of Google and Amazon spearheading the movement with products like Alexa. We will see further technological advances in this area and this is no different for the utility industry.  For instance, the energy-conscience and frugal members of society, are driving demand for products like Smappee. Smappee energy monitors track how much energy you consume and produce, which allow users “a better insight and sustainable energy savings up to 30%”.
  3. Technological improvements may also mean that the utility companies can mitigate bad debt through early engagement strategies. The best engagement strategies will be strongly aligned to customer behavior data.
  4. Stronger use of “business process outsourcers” will mean a stronger alliance of experts in specific fields, thereby providing a clear application of current and emerging best practice techniques.

Digital Transformation in utilities from around the world

Thames Water adopted remote asset monitoring to anticipate mechanism failures and respond in real time. The Consumer Council for Water (CCWater) allows retailers to submit complaints on a monthly basis, which helps the council to identify and solve problems with non-domestic water supply. Meridian from New Zealand allows customers to control how much power they can buy using a subscription-based plan that is typically found in data companies.

Here are the core benefits that create ripples of efficiency and customer satisfaction in your industry:

● Better customer service: customers can choose services online, make payments, add or remove services, change plans and models, change addresses and get alerts for timely bill payments, which also helps companies to reduce overheads.
● Predictive analytics: real-time alerts, supply maps, downtime trends and maintenance become easier with predictive analytics that allows smart data analysis and further service for engineers to solve problems before they escalate.
● Smooth internal operations: a company or industry must improve its day-to-day operations, ensure robust operations and make optimum use of resources if it wants to provide better customer service.
● Disaster management and crisis control: Australian Water Association are using geographic information system (GIS) data to predict crisis situations. Location intelligence helps consumers to plan ahead in the face of a crisis such as droughts, seasonal changes and extreme weather conditions.
● Innovation & disruption: When Meridian offered personalized power management service to its customers it opened up a whole new avenue for their customers who preferred greater control over their power usage. IBM Watson is doing some phenomenal work through a cognitive intelligence engine, which identifies dislodged joints and blockages in sewer pipes, making the task of maintenance significantly more efficient.

These examples show that digital can help to improve processes by enhancing customer satisfaction. The utilities sector is riddled with a number of problems and it’s time they evolve, become more customer-centric, adopt agile techniques and change the status quo or risk being washed away by the next wave of innovation.

The Economist look at disruption in the energy market in more detail


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