The utility industry has historically been viewed as conservative, traditional and slow to adopt leading business practices and technology solutions. In recent years, this has been changing with ever-increasing momentum. Today, it is not uncommon to see utility companies adopting cutting edge customer-facing solutions, leveraging highly capable field service technologies and experimenting with advanced business intelligence capabilities. Utilities have quietly been rolling out extensive Internet of Things (IoT) platforms for many years—long before the IoT moniker came to be. Which of the countless buzzwords and management philosophies should garner the most attention from utility technology executives?
As an energy industry consultant and former utility CIO, I believe these five trends sit atop the agenda for utility technology leaders in early 2017:
- Closing the Customer Engagement Gap
- Enabling Digital Field Operations
- Responding to Energy Consumerization
- Bringing the Sharing Economy to Energy
- Protecting the Customer and Digital Grid
Let’s examine each of these trends, their key value drivers and some ways in which technology leaders can position their organizations for success. This information can, in turn, serve as a basis to evaluate IT investment strategies and enumerate projects required to meet the emerging needs of the new utility.
1. Closing the Customer Engagement Gap
Customer expectations are rapidly changing and the utility industry is not sheltered from these winds of change in the way it once was. Deregulation in markets like Texas and California has led to direct competition between retail entities that has upped the ante for utilities and the products and services they present to the marketplace. If that weren’t enough, customer expectations for their power or gas provider no longer exist in a vacuum. The experiences customers have with other retailers and service providers they interact with on a more regular basis like Amazon, Uber, Starbucks, etc. are driving these expectations to new heights.
Utilities are often heavily dependent on specialized, purpose-built technology solutions that address a particular business need (e.g. GIS, outage management) but aren’t well integrated across the value chain and have limited native ability to directly serve the customer. Meanwhile, customers are adopting an evermore diverse set of digital tools (e.g. mobile, social) in their daily lives and expect to utilize them in their dealings with all of their service providers--utility included. Further complicating matters is the rise of the energy prosumer, a class of customer that takes control of their own energy management—including generation—via distributed energy resources (DERs) like rooftop solar.
Customer solutions at a great many utilities tend to be rudimentary, highly transactional in nature (e.g. pay bill, report outage), and created for legacy engagement models centered on call centers. Often, these limitations are driven by the capabilities of legacy customer information systems (CISs). Leading organizations are overcoming these limitations by:
- Creating and staffing new roles such as Chief Customer Officer with consolidated responsibility for all customer interactions enterprise-wide (and, assigning strategic IT-specific liaisons)
- Developing and embarking on a broad omnichannel engagement strategy prioritizing initiatives based on customer metrics
- Leveraging experience design practices such as customer journey mapping based on personas to improve services
- Integrating back-office and operational systems along the customer value chain to overcome some of the inherent limitations of existing IT systems
- Launching new products and services on mobile and digital channel platforms first (vs. walk-in, call center) to rapidly build digital momentum
- Expanding the use of social media (SoMe) around events such as major storms, as well as direct messaging for online assisted customer support
2. Enabling Digital Field Operations
It’s no longer sufficient to view digital field operations as a process of eliminating paper and automating repetitive, low-value tasks. The combined forces of increasing customer expectations and those of the digitally aware workforce will press utilities to make important, targeted investments in the technologies delivered to their crews in the field and operators in the plants. A generational transition is well underway and new utility workers just entering the workforce can’t remember a time before the ubiquity of PCs or when Internet access became as basic as any other utility service. These digital natives have had smartphones in hand since their early teen years and want to come to work and use technology the way they do when they’re off the clock. It should be an enabler, not an encumbrance.
Many utilities were relatively early adopters of mobile solutions for their field services personnel. These platforms have often been constructed around a ruggedized laptop with some kind of rudimentary communication platform (e.g. radio-based modem). Using these hardware devices, crews are able to run the same kinds of desktop software as has long been available in the back-office and access them in the field resulting in improved productivity. Since these tools evolved from back-office, design and engineering use cases, they aren’t well suited to use in the field. They don’t naturally integrate into the work process and also present ergonomic challenges. In most cases, they simply enable operators and supervisors to perform administrative tasks from their truck or while making rounds reducing nonproductive time, eliminating double entry and improving the timeliness of basic measurements and/or work status information available to management.
Utilities closer to the cutting edge of field service technologies are commonly:
- Expanding the use of well established consumer device form factors such as smartphones and tablets
- Combining and delivering more comprehensive job-relevant data to the operator beyond basic work order information to include location, asset spec, condition information, performance data, maintenance history, work procedures, safety guidelines, etc. Moving to higher speed communications infrastructure such as 4G LTE to satisfy these high volume, real-time data requirements
- Exploring ways to improve situational awareness of crews through the use of heads up displays (HUDs) and wearables for safer, more productive “eyes free, hands free” work
- Providing means for the workforce to connect, collaborate and share information within the utility similar to the ways they interact using social media in their personal lives
3. Responding to Energy Consumerization
Somehow, the basic provisioning model for electricity has remained largely unchanged since the days of Thomas Edison—but that business model is now under siege. The forces at work in the utility sector have already transformed other industries like transportation services (Uber, Lyft), lodging (Airbnb), and media (Facebook). These types of services are not rooted in an asset intensive business model structured for a predictable rate of return. Rather, they are built around the notion of maximizing the return on assets--often owned by others--through the use and sharing of information.
At the same time, customers have the ability to fundamentally change the way they manage their energy use. New market entrants are offering a dizzying array of consumer products and services that sit between the utility and their customer while providing those customers with more control than ever before. Google’s Nest is one example. Tesla’s Powerwall is another. All manner of smart home devices are now available to provide utility customers with the ability to control how, when, and even where they use electricity. Distributed energy resources (DERs) like rooftop solar panels, small wind turbines and compact natural gas generators are a few examples that have enabled some utility customers to become both consumers and producers or, commonly, “prosumers.”
A number of leading utilit have concludedthat simply selling electrons or gas molecules for a conventional rate will prove insufficient to satisfy the rate of return owners/investors demand in a sustainable way and are responding by: