This article first appeared in Utility Dive
Imagine the Next Generation Energy company—a utility that has evolved beyond just serving electricity and gas to its customers, instead providing a modern end-to-end digital experience. A utility that invests in customer-facing technology, with a reimagined operating model that enables it to smoothly implement future changes, minimize risk, increase efficiency, and better serve its customers. It provides customers with the ability to directly interact with the utility through a variety of platforms and channels in a convenient and independent manner. Additionally, it leverages data management capabilities, process automation, and the integration of new technologies into its organizational framework to succeed in a rapidly changing industry—all while improving the customer experience along the way.
For a utility to evolve into a truly digital organization, it is important to act decisively and commit to lasting change. Here are a few steps utilities can take:
- Look in the mirror – A utility must conduct an honest and objective assessment of its capabilities and maturity, and how far it wants to and can realistically go in the future. This includes understanding existing digital capabilities, desired timeline for implementation, level of commitment from senior management, regulatory and economic factors or limitations, etc. It also means defining the vision and the key drivers behind considering this significant change to the business.
- Develop a business case – To evaluate and deliver upon the anticipated value of this digital evolution, a utility must define clear objectives, process owners and stakeholders, as well as the key metrics that determine whether the business is modern and agile or operating inefficiently in a business as usual mode. Metrics should cover both operational efficiencies and cost reductions and span across the organization. The key here is socializing these metrics with process owners prior to and during execution of the project to ensure stakeholder buy-in and to identify pain points early in the process. This is particularly important when dealing with sensitive areas such as operational efficiency improvements, which can often times involve potential workforce reductions.
- Introduce “Customer Advocates” into the process – Critical to a successful digital evolution is maintaining the primary focus of improving the customer experience. Creating new roles within the organization, such as “Customer Advocates,” allows the interests of customers to be properly represented throughout all stages of the evolution. These advocates work within the evolving organizational structure, participating in key discussions, providing guidance when necessary, and owning process changes that most directly impact the customer. The value a digital utility brings to its customers is clear—customers can interact with the utility on their own terms, easily manage their business through multiple modern channels, receive real-time alerts on urgent issues like service outages, and spend less time on hold.
- Design a Digital Operating Model (DOM) – When altering the way business is conducted to properly implement digital solutions, a new organizational structure is fundamental. A DOM allows operations to shift to an agile model that encourages stakeholder collaboration and seamlessly integrates new technologies into business operations to improve products and services. By changing how the business communicates and works, future changes and enhancements can be channeled through a defined process. The utility will be able to maximize its quality of service to customers by encouraging proper stakeholder representation and ensuring the utility can adapt to the accelerating technology landscape.
- Eliminate silos – Leadership commitment and vision are critical initial steps, but they will only take a utility to the starting line of this evolution. As with any game-changing decision, the process benefits from being transparent, and involving stakeholders from various business units, such as the information and technology group (IT) and customer advocates. A common mistake made by utilities at this early stage is failing to bring the right players to the table and achieving some quick wins to generate momentum. It is critical to involve all key decisionmakers and team managers to ensure that the solution is properly vetted, with sufficient resourcing to drive it forward. To be successful with an evolution of this magnitude, all stakeholders need to be engaged early and often during the process.
By way of example, we recently worked with a large energy provider that was embarking on the journey of revolutionizing its business to create a better digital customer experience by providing customers with the necessary tools and platforms to engage in 24/7 self-service effortlessly and efficiently. The provider is improving its customer-facing digital platforms: introducing a new mobile application, a user-friendly website, and an advanced billing and collections system, all of which empower customers to easily pay their bills, report outages, ask questions, and resolve any other routine issues— without needing to pick up the phone. Through these investments, the energy provider is improving customer satisfaction, while also reallocating resources towards further investment in forward-thinking initiatives.
The benefit of becoming a Next Generation Energy company is fully realized when value is driven both from improved customer interaction capabilities and expanded technological functions, creating an organization that is more responsive and adaptive. Challenges will occur along the way, but the key differentiator between the best digital utilities from all the others will be their level of organizational self-awareness and stakeholder alignment. A Digital Operating Model that brings together IT and business groups is essential to creating clear and transparent processes, governance, communication channels and decision-making processes in the utility. Ultimately, the utility will always put the customer first, evolving into a business that implements innovative solutions that best serve them.
Spencer Borison and Sofia de la Garza are energy and utilities experts at PA Consulting