The dawn of digital: Quick gains for utilities
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- Ilene McDonald
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1 The dawn of digital: Quick gains for utilities utilities
2 We take power, gas and water for granted, despite the fact that utilities are large, complex businesses. It is the steady investments made in infrastructure for over a century that makes them reliable. Now that business model built based on trillions of dollars in generation and distribution networks is under threat. A perfect storm of technology, renewables & storage, micro grids, customer demands, regulations and policy is forcing utilities to become nimble, versatile and customer focused. At the core of the problem and the solution is the role digital can play in the industry. Digital presents unprecedented challenges to utilities and, if not quickly embraced, could wipe out organizations that have been leaders in the game for decades. On the other hand, digital presents fresh opportunities to lead the way with innovation and build more resilient businesses. When utilities executives meet, the most urgent discussions are around renewables that are taking entire communities off the grid; the key headlines are around regulatory bodies capping profits and permitting expansion only when the utilities provide & incentivize cleaner energy and improve customer satisfaction; the main concern is on the changing demand patterns triggered by electric vehicles, smart grids and smart buildings, forcing a change in workforce skills, capabilities, orientation and agility. When a utilities executive looks around, what is visible is this: customers using the convenience of mobile apps to hail a ride or book hotel rooms; a growing number who are able to leverage dynamic pricing for products and services; and everyone seeking the convenience of digital channels that offer personalized service. The consumer wants the same level of service, convenience, choice and control from utilities as they are experiencing from industries such as consumer goods, retail, telecom, travel, financial services, media and healthcare. These are the industries that have embraced digital and are setting new expectations. Utilities have therefore, wisely, begun exploring the four key areas where digital can have a quick, broad and significant impact: operations, the workforce, customer service and the sales and marketing function. Operations: New networks and partners Utilities grids were designed to manage peak demand. Everything, from plant capacity to support services, is blueprinted from peak demand estimates. Today s utilities must become flexible and be prepared to meet peak demand plus variable consumption using distributed generation, partner networks, new storage systems, etc., with the help of improved digital forecasting tools. This means looking beyond generation, to the edge of the grid where businesses, communities and individuals are investing in renewables. Utilities need to be able to answer questions such as: Who are the key producers? How much are they producing? When can they offer their products at the best costs? This has a profound effect on operations that have traditionally depended on trading markets for expensive power (or gas). Digital technologies that sense demand in real-time and scale capacity by tapping into partner networks are the future. Industry discussions have started to focus not just on the operational efficiencies & avoiding expensive capital reinforcements but also creating revenue streams in the process. Some utility markets are moving towards separation of the larger system operations and commercialization of opportunities from the traditional management of network assets. Field workforce: Achieve targeted outcomes Utilities have rugged and dependable processes. These have been tried and tested over decades, creating rigid workflows and schedules. These processes guide field force operations. 2
3 Digital presents unprecedented challenges to utilities and, if not quickly embraced, could wipe out organizations that have been leaders in the game for decades. But the time is ripe to enhance these processes that depend on sub-optimal centralized scheduling. Utilities must opt for assistive technologies such as chatbots backed by natural language processing, automation, augmented reality, drones and rich video-based step-by-step troubleshooting processes to empower the field force and achieve targeted outcomes. It is imperative that manual interventions are steadily reduced and replaced by digital processes to enhance operational efficiency, field force collaboration, asset performance and service delivery. Customer service: Personalized service through digital channels Utilities need to mirror the customer servicing standards and processes of other industries. The goal should be to move from the listen-respond paradigm of customer service to one of predicting customer needs and pro-actively responding to those needs. Templated, cookie-cutter responses to customer issues are becoming history. Today, based on customer profile and customer journeys, CRM is increasingly getting personalized. In addition, utilities must develop two-way community engagement using social platforms, chat and mobile applications. These not only create customer intimacy but also help utilities wean customers away from the traditional, investment-intensive call center approach. Sales and marketing: Add new revenue streams The product portfolios of utilities have remained remarkably slow to expand. Utilities have long recognized the largely unmined value embedded in their access to large customer bases, the massive amounts of data they own, and their core competencies in engineering and operations. With the advent of digital technologies and new business models they now have the opportunity to exploit these value sources to grow their business. Simultaneously, as the product and services bouquet expands, decades of applying fixed tariffs with a focus on contract renewals can shift toward dynamic pricing, bundled products and loyalty rewards. The cumulative effect of applying digital processes to sales and marketing will be to bring down cost to serve and creating stickiness through differentiated services. The digital opportunity canvas For utilities the key questions are often about where to begin and how to build on successful digital interventions. Grappling with a plethora of problems and a myriad of digital solutions it can be daunting for any utility to create a 3
4 meaningful digital roadmap. The digital opportunity canvas that Wipro has created for each of the utility segments assumes relevance in this context. It provides a starting point for clients to shape their digital journey; it includes a number of candidate digital interventions that can be undertaken by utilities based on their goals starting from foundational initiatives to those initiatives that can be trendsetters for the industry. The tool also provides enough flexibility to onboard client specific ideas and priorities. The ideas are firmly couched on the business goals that they seek to deliver values like reducing costs, improving operational efficiency, enhancing customer experience etc. About the author Krishna RS General Manager, Utilities Digital, Products & Innovation, Wipro Krishna RS has over 2 decades of experience working with IT/Consulting firms including KPMG and Wipro with 15+ years in the global utilities industry. He has successfully managed large ($100 million) business transformation programmes, led business development efforts in new geographies and was involved in new practice development. In his current role, Krishna is responsible for Digital, Products and Innovation for utilities across multiple geographies. He can be reached at krishna.rs0@wipro.com 4
5 Wipro Limited Doddakannelli, Sarjapur Road, Bangalore , India Tel: +91 (80) Fax: +91 (80) wipro.com Wipro Limited (NYSE: WIT, BSE: , NSE: WIPRO) is a leading global information technology, consulting and business process services company. We harness the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help our clients adapt to the digital world and make them successful. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, we have a dedicated workforce of over 170,000, serving clients across six continents. Together, we discover ideas and connect the dots to build a better and a bold new future. For more information, please write to us at info@wipro.com IND/B&T/JUL-DEC2017
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