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Digital Transformation is the Path Forward for Utilities

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Kelly James's picture
VP & GM, Energy & Utilities Salesforce Industries

Kelly James is Vice President and General Manager,  Energy & Utilities at Salesforce Industries. Salesforce Industries with Vlocity delivers the Energy and Utility Customer Cloud. Kelly has...

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  • May 24, 2019 8:45 pm GMT
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This item is part of the Special Issue - 2019-05 - Customer Care, click here for more

The utility industry has always been adept at effectively managing change – adapting to the constant advancements in energy production and consumption. Today, given the critical forces at play from a stakeholder, regulatory and technology standpoint, we find ourselves at an unparalleled stage where this capability has become even more crucial.

Globally, energy systems are going through rapid transition that will bring important changes to how we fuel our cars, heat our homes and power our businesses. These trends are having and will continue to have far reaching implications for consumers, businesses, energy companies and governments over the coming years and decades.

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As a sector, we are faced with key developments that have added new dimensions to the overall landscape and increased the pace of change:

  • The shift to a more distributed, renewable, sustainable energy model is ongoing. Where the costs of renewable energy continue to decrease, many countries will soon reach a tipping point where they are the cost-effective alternative to conventional fuel types
  • Similarly, improvements in battery technology and declining costs are bringing us close to the point where electric vehicles will be more economically viable than internal combustion engines – potentially seeing cost parity in the early 2020s
  • Dramatic advances in technology – in terms of sophistication and functionality as well as how it is deployed, integrated and used – will be the norm
  • Customer expectations are increasing, and they have more choices than ever in both competitive and regulated markets

It’s a very different environment to that of even five years ago, and energy companies will need to have the systems and processes in place to manage and thrive in this new operating environment. While there are significant challenges, there are also massive opportunities for improved performance and growth.

New Challenges Bring New Challengers

There is no doubt that technology has become better, faster and cheaper to deploy, delivering tailored solutions that not only delight customers but enable growth. Consumers and businesses today trust energy companies to install and manage energy technology. But going forward there will be increased competition from engineering, telco and technology companies hoping to grab a share of this changing ecosystem.

Energy companies will need to proactively manage this threat to successfully transition over the next 10 years. But by using the inevitable disruption to their advantage – e.g., embracing advanced technology, new partners, transformation and innovation to redefine how they operate – it will lead to differentiated services and solutions and recast their interactions with customers. Technology will be the engine driving this change and enabling the convergence and collaboration of ecosystem partners essential for future operations. With new competitors and technological innovation already inspiring enhanced propositions – energy companies must adapt to this challenge if they want to retain their customers and their trust.

Digitalization is transforming the sector from one that provides simple undifferentiated products to one that provides sophisticated, personalized solutions and services packages combining commodity and non-commodity products made easy for customers. The companies that can embrace these opportunities will continue to grow and redefine how they interact with their customers.

And as margins on power become further challenged, we see this packaging of a wide range of products and services as a clear way for suppliers to not only deliver superior levels of service but drive growth and value.
Consumers want services tailored to their needs that provide high quality, seamless, omni-channel access. Digital when it’s needed. Human interaction when it’s necessary. They also demand value as a constant.

Soon customers will expect the same of their energy supplier. Why can’t one company give me energy, smart home, telecommunications, broadband and insurance in a competitive, well-managed subscription? Customers will expect to interact with their energy supplier as they do with Netflix or Amazon – simple, intuitive, proactive and personalized. Just as these companies offer recommendations to boost my engagement and enhance the brand experience, consumers will come to expect the same of their energy supplier. Intelligent digital advice to inform and educate me and to help incrementally with the move towards a carbon neutral economy.

Putting the Power in the Hands of the Business

With the wealth of customer information, utility companies are in a strong position to provide tailored, innovative solutions. The latest cloud solutions are putting control firmly in the hands of your businesses. SaaS subscription models make it easier to buy and consume at the levels you need now and in the future. Consequently, companies are moving away from custom-coded software that can be difficult and costly to manage to “low-code platforms,” where transformation and differentiation are achieved through clicks not code.

Similarly, we are also seeing a marked change in how solutions are deployed – large IT projects taking years to deliver are now being replaced by smaller, agile implementations where solutions and value are being realized in a matter of weeks.

Convergence and collaboration to meet market conditions is now the norm. Partnerships are and will continue to be needed to deliver omni-channel solutions. We are seeing huge innovation in the software arena with companies such as Salesforce, Google and Amazon providing value that is masterfully created, consumed and regularly updated. And these learnings are moving cross sector. Just imagine how the EV market will be managed in the future – will it be similar to how telco companies manage roaming charges? Companies that adopt technologies driving convergence will become leaders in provisioning complex packaged solutions – all delivered with the highest quality customer service via all digital channels.

Standardizing on a Future-Proof Platform

The rapid “consumerisation” and digitization of technology is happening in all industries, and the same applies in the utility sector. And it is all based on the cloud. It allows businesses to put the customer at the absolute heart of  their thinking – directly tailoring solutions to exactly what they need rather than being restricted by what legacy systems can accommodate.

Improvements to integration approaches have made the linking and leveraging of data much more straightforward than in the past, effectively allowing solutions to quickly parse and use data from other systems to improve the customer experience. This is where convergence reigns.

There is a massive opportunity to re-define and transform the relationship between customers and utility companies. Partnerships and collaboration are going to be key in how we look at the challenges of creating differentiated ways of working, harnessing the changing energy landscape, addressing increasing customer centricity, innovation, digitalization and operational excellence.

To do this, a utility needs the right platform and a digital transformation strategy in place that allows for, and propels, the innovative, creative re-imagining of the customer experience. (And as aggressive industry M&A continues, the right platform allows for the desired customer and employee front office experience while the merged companies do the hard work for combining billing and back-end systems.) Also, beware of general purpose, bolt on CRM solutions. Having a solution designed specifically for the industry – one that delivers value today and can flex and scale for tomorrow – will allow for continual growth, agility and differentiation, and the path to a bright future.

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