The year 2020 is forever emblazoned in the hearts and history of the human race. Advanced technologies have enabled industries to respond, reimagine and deliver new approaches for people to work and live safely throughout this extraordinary moment in time.
Every industry sector was taken by surprise by the magnitude of the outbreak. Initial response to the crisis took time: time to accept, assess and adapt to the situation. Some businesses were able to react quickly and resume business operations, while others required significant time and support to get back up and running.
This pandemic has undeniably been devastating to the economy and human life, but it has also opened new possibilities with organizations and customers embracing digital technologies. This large-scale, rapid adoption of digital is also enabling utility companies to accelerate key business initiatives and to be more purpose driven.
The purpose-driven utilities organization
How organizations define their purpose: They ask: “What are their true sources of value?” The purpose behind their existence often defines the blueprint for their transformation journey.
Take advantage of increased digital adoption
UK citizens have moved to digital platforms for carrying out their daily activities. The increased adoption of a contactless, digital approach gives utility retailers new opportunity to aggressively drive their digital agenda.
Utility companies can also look to reap the benefits of past investments in digital channels (including apps or online accounts) through carefully crafted customer engagement strategies. Segmentation of the customers and an in-depth analysis of their interaction records, along with their demographic information, should identify individuals who will likely need help to use apps and online portals. This is a rich opportunity for purpose-driven utilities to not only reduce “cost to serve,” but also to stand out with excellent customer service.
Another opportunity for the more experienced digital customer is to offer enhanced features and capabilities within an app or portal. For example, combining consumption data with geographic data to provide insights into energy consumption could increase customer engagement using gamification features based on peer benchmarking.
Attract a digitally savvy workforce of the future
Prior to the pandemic, the utility industry in the UK was already struggling with an aging and shrinking workforce. The utility workforce could benefit from increased adoption of wearable and contactless technology, especially for field service workers. Leveraging modern digital technologies such as augmented and virtual reality (AR/VR) could attract new talent and enable utility service providers in providing quick and effective training, thereby reducing overall cycle time to deploy personnel on the ground.
IoT sensors on residential devices generate data that can be captured by utility organizations, enabling data mining. On-the-job, real-time data retrieval on repairs and maintenance on handheld devices or wearables can also help improve operational resilience. These efforts can enable utilities to build digital knowledge libraries that give field worker(s) real-time access to critical information on-site.
Utility companies can also look to combine employee data along with their intrinsic behavioral data to create role and aspiration alignment, improve hiring efficiencies, employee engagement, and productivity of agile teams considering compatibility quotient.
Capture the intellectual property of your workforce
Digitizing hand-written notes, field observations, SOPs, technical instructions and manuals will be a key priority for utilities. People who have been employed for decades at their utility companies carry a wealth of knowledge and industry expertise. It will be critical to capture that information in any form possible, including audio files, video instructions, speech-to-text converted manuals, as these elements will be critical assets that make up digital reference libraries. This data and information need to be catalogued, managed and governed in such a way that field workers can access them through easy click-throughs in the field or even through voice-enabled command mechanisms via robust digital architecture.
Utilities need to be forward looking and innovative in this area of managing not only the workforce of the company, but also the data associated with their knowledge. If utility service providers are able to build a strong data management system mapped to the employees and their skillsets, the world of asset maintenance could be improved by leveraging the combination of the energy and digital sensibilities of a younger workforce combined with the wisdom of more experienced workers. This is possible by accessing data and analytics enabled by leading-edge technology, which lets workers solve complex problems at any point in the value chain.
Use a data- and analytics-led approach for recovery of outstanding payments
When non-essential workers are advised to stay at home, it can translate into a reduced cash flow for many households. At the same time, staying at home causes increased consumption of all utility services. This reduction in cash flow combined with higher bills can result in a de-prioritization of utility payments by customers. Utility service providers need to deploy a data- and analytics-led strategy to devise a recovery program, but they must also demonstrate empathy in the process. Options include customer offers that range from hardship assistance to discounted payment options to staggered payment options. These options need to be mapped to different customer segments based on historical behavior and other external ecosystem data.
Water utilities are challenged in maintaining their overall cash flow. While most of these utilities have a robust process enabled by technologies already in place, it is now essential to develop an analytics-led strategy to improve the impact of these processes on overall company cash flow. For example, a robust analytics strategy can help optimize the “cost to collect” (CTC) and improve “promise to pay” (PTP) rates, thereby minimizing cost and improving collection throughput.
Many nonessential businesses have undergone a dramatic slowdown or complete halt in their business operations, resulting in non-payment of not only their current amount outstanding, but also historical credits. To maintain good relationships and avoid looking predatory, utility providers will need to devise flexible recovery strategies for customers, who may lack the ability to pay everything at once.
This crucial phase presents another opportunity for utility service providers to improve customer experience, if they can leverage the right strategy for the right customer segment and demonstrate helpfulness during a time of need. This might help utilities to transform their market perception, improve brand loyalty and pave the way for a stronger customer base.
Manage and exploit shifts in demand with innovation
Energy consumption trends are changing with more remote working increasing residential sector consumption and conversely reducing office-based business consumption. As a result, it is a good time for utility organizations to re-evaluate their pricing strategy, given that traditional peak and off-peak periods are shifting. With greater adoption and endorsement of an “always on” work-from-home culture, we can expect to see extended peaks and fewer off-peaks. It will therefore be beneficial to analyze the distribution of peak consumption periods (within residential and among residential, industrial, and commercial sectors) to identify various patterns emerging from this new paradigm and to redefine tariff options for both sectors.
With more individuals permanently working from home, utility companies will also need to bring innovative products and offerings to the market, which will help reduce churn and create a solid customer base. The opportunity is for utilities companies to transform from an energy provider to an energy solutions provider through new products and services for this new normal.
Identify new and emerging trends in demand
For electricity utilities, there is an emerging trend for increased usage of electric vehicles (EVs) as another electricity demand driver. This EV trend offers electricity utilities an opportunity to offer differentiated vehicle and home energy solutions in the near future. We predict the emergence of an “EnergyTech” sector of innovation, which will be a combination of energy generation, storage and consumption for the home and vehicle. For example, Tesla has applied for a license to generate electricity in the UK using batteries to store renewable energy and sell surplus electricity back to the grid using Autobidder software. This category of technologies can be applied to the consumer household using batteries in connected vehicle(s) to store and consume electricity surplus in a residential home. Complete home and vehicle energy IoT solutions such as this could be an important way of building customer “stickiness” and brand loyalty.
The post-pandemic period will likely drive innovation and change, yet it presents many opportunities for utility companies. Out of necessity, digital adoption has increased and offers new ways for utility companies to engage their customers. New workplace models are fostering customer loyalty by managing expectations with empathy and customized messaging. Moving forward, the ability to innovatively manage future demand trends and provide innovative “EnergyTech” solutions will be strategic levers for utilities to transform customer engagement, strengthen brand perception, and build brand equity far beyond the COVID-19 era.
About the author(s)
Paul has over 26 years of experience and is in an advisory role in the Analytics and Insights unit based out of London helping UK clients solve business challenges through the application of data and analytics.
Paul Wood has been associated with clients in the investment banking industry delivering large, complex, transformational software development and package integration projects. He has transferrable skills in international business development and transformation, project and program management, technology and data, people management, leadership, communication, risk management and a good financial knowledge.
Somak has over 16 years of experience and plays the role of an Analytics Consultant with in the Analytics and Insights unit based out of London helping customers solve complex business problems through the application of Data and Analytics. Somak has experience across Consulting & Solutions, Service Delivery, Project Management.
Somak has been with TCS for over 10 years and has held multiple leadership positions managing various portfolios. Somak works with customers across Energy & Utilities, Manufacturing and Hi-Tech to partner with them in their digital transformation journey and provide accelerated business outcomes.