The Digital Utility – 4 Factors for a Successful Transformation

“Digitise or die” is the harsh reality for businesses across every sector, but smart meter reform has injected particular pressure upon Australian utilities.

Yet the AEMO has commenced investigation into the smart energy meter roll out to find its only achieved installations across 17% of businesses and households outside of Victoria. At this rate, the roll out is one of the slowest in the world, only set to be completed in 2039. In the meantime, frustrated consumer advocacy groups and the AEMO has promised to investigate ways to improve uptake to stimulate customer service improvements for consumers.

On the bright side: by now there are plenty of examples of successful digital transformations to learn from, including utilities at home and abroad. It’s also encouraging to find digital service results usually exceed expectations on cost savings, process efficiencies and market share.

We look at some tactics proven to support a successful, sustainable digital transformation and commercial excellence in the Utility Sector.

Factor 1: Don’t Digitise Everything at Once

Do you have a bucket of digital projects?

Successful transformation can’t be achieved if you attempt to digitise everything at once. Rather, assess where digitisation will achieve the biggest bang for buck for the business via cost savings or boosted profits the next 2-4 years. That’s your starting point on your digital roadmap of priorities.

A clearly articulated roadmap will also help you to build a blueprint for your transformation across systems, process, people and data. It will also help you to assess the feasibility of your project, or dependencies for each stage of the digitisation journey.

Each project on your roadmap should be broken down into stages that will represent efficiencies first, and expand from there.

Demonstrating results in the short term is motivating. Those projects with an observable financial impact in the short term build momentum for further digitisation efforts.

It’s critically important to articulate the impact of your project or new technology will have on the business and how it contributes to corporate strategy. This will help you to achieve buy-in from key stakeholders and internal support across the organisation; McKinsey has found an 89% correlation between clear direction from leadership and a utility’s transformation success.

Factor 2: The Best Metric for Performance – User Uptake

A recent Australian study identified 75 benefits attributable to digital meters – some are mutual, some primarily benefit the utility, and some only the consumer.

But without users, neither the business nor the consumer receives any payoffs; the utility’s investments in digital programs is wasted and opportunities for the customer to save money is lost. That makes adoption and usage critical metrics for the success of any digital program.

Setting adoption or volume targets within a nominated period of time before moving to the next stage will also support your success by:

  • Helping to keep budgets concrete
  • Making project management easier
  • Keeping goals specific, and easier to measure
  • Making it quick and easy to identify, reform or remove problem areas to save money.

Factor 3: Focus on Customer Priorities

It is often difficult for the utility to drive customer loyalty to build business value (because “water is water”, right?). But not if you look at the opportunity to enhance customer experience by going digital; this can become your point of difference, where information is more important than the material asset.

Understanding what matters most for the client will help you to prioritise digital projects that build customer loyalty. McKinsey’s annual utilities customer-experience survey identified the four primary influencers of customer satisfaction:

  1. The billing-and-payments experience
  2. Managing energy usage
  3. Reporting outages
  4. Resolving billing and payment issues.

Case studies overseas have demonstrated that tech projects that address these hot buttons not only benefit the customer, but the utility too.

In one example, a European multi-channel customer portal that allows consumers to monitor their usage and access self-managed services simultaneously improved billing accuracy and reduced costs for the customer and meanwhile, achieved operational efficiencies and customer satisfaction for the utility.

Further, the digitisation of services allowed for the capture of analytics. This was applied to identify significant opportunities for new products that represented cross and upselling opportunities.

Map out your customer journey. By starting with your end user and working backward, you’ll quickly illuminate any opportunity for the business to streamline process, remove unnecessary products and how to deliver customers what they want from an interface to your services, your people and your services.

Factor 4: Redesign Legacy Processes

It’s important that your digitisation project fully leverages the opportunity to transform and reformat the business where necessary to achieve articulated objectives, rather than simply recreate existing processes.

A core part of this is improvements in data sharing across the enterprise. Demolish any silos between systems and departments to unlock the potential value of data and insights across the business to achieve genuine, client-centric services.

By achieving a single view into all equipment, resources and data, the digital transformation process will unlock efficiencies that will allow you to expand, road-mapping your utility to new frontiers.

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