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Smart meters offer companies 3 new lessons in competitive advantage

"The technology is racing way ahead of organisations’ ability to take full advantage of it”.



Roger TrappFuture of Business Blog18 October 2011


To most people, it appears, smart technology is confined to those mobile phones and other portable electronic devices that are increasingly capable of doing a lot more than just making and receiving phone calls. Sure, smartphones are a key component in the technological revolution, but just as important – from a business point of view – are developments such as smart meters that have the potential to unleash the growth for which so many companies are striving in these turbulent economic times. Unfortunately, though, it seems that many firms are missing the opportunity.


According to a survey of international companies by PA Consulting, a leading management and IT consulting and technology firm, there are three key hurdles confronting businesses. These are organisational difficulties, people issues and a lack of direction from the top. The result, says Peter Siggins, an expert in smart organisations and leader of the project, is that “the technology is racing way ahead of organisations’ ability to take full advantage of it”.

It is well worth businesses making the effort to catch up. PA believes that the information generated by new technologies, such as smartphones and smart meters, can deliver a low-risk, low-cost route to innovation and subsequent competitive advantage. Because the resource is already there, organisations just need to use it more effectively – to link data, systems and people – to gain new insights and release value.

This in turn makes organisations more intelligent, with a greater capacity to make timely decisions with greater confidence. Information derived from smart technologies can show organisations where and how to innovate. It can help identify new markets, increase efficiency and cut costs, says the report. “Crucially, it can help them stay one ahead of the competition.”

MAN Diesel is an engineering company that has been formed through a series of mergers and as a result had various different business models, processes and IT systems. It has developed a cost-effective master governance model and data management processes to give the business access to standardised data across all its locations. Moreover, it engaged with key people in the business to ensure commitment to the new approach. The result is that the company has a global overview of customer and supplier activities and no longer wastes time and money trying to match data across functions, departments and national borders.

In keeping with the low-cost promise, Siggins stresses that sometimes the solution is relatively cheap and easy to implement. For example, a healthcare insurance company had millions of customers but did not really know anything about most of them. The relationship was really little more than a financial transaction. But simply by introducing two-way SMS as a way of communicating it was able to improve the service provided to the people insured and gain much better access to them. Similarly, in Australia, the established banks were able to counter the threat to their payments business from independent payment providers by joining together under a system developed by PA. BPAY claims to cover 90 per cent of the consumer banking market.

So how can other businesses make the most of the technology and realise the competitive advantage of the smart organisation? Siggins and his colleagues propose three key steps.


First, business leaders must make the move towards a smarter organisation a corporate priority. The most senior executives need to champion innovative thinking and inspire their organisations to think about how they do business. They also need to be aligned in their approach. The PA survey highlights a lack of consensus – indeed, a tension in some cases – among members of the senior team about the key challenges confronting the businesses and how they should be addressed. For example, 16 per cent of Chief Operating Officers believed new technologies were having a significant impact, compared with 52 per cent for Chief Information Officers.

Second, organisations need to create the conditions that allow data and information to be readily shared, analysed and combined in innovative ways. The survey shows that traditional organisational boundaries can be an obstacle to utilising information and data across the enterprise. Corporations that experience or recognise this situation – and the survey suggests that more than a third of businesses struggle to work together to facilitate cross-company information intelligence, with middle management resisting the change – should consider forming enterprise-wide initiatives focused on taking advantage of smart technology.

Third, businesses need to support and recognise their people in the process of becoming smarter. Just 11 per cent of the organisations surveyed were focusing on training and developing staff to adopt smart technology. But it is people who use smart technologies, people who communicate the benefits (as customers and employees) and it is people who can stop companies accessing the main benefit of smart initiatives – information.

It is clear that businesses are at an early stage of maturity in maximising the value of smart technology,” says Siggins. He adds: “Organisations must allocate dedicated resources to look at how data and information – both within and outside the enterprise – can be fully leveraged.” Then they can put the smart meters to work.

To read this article on the Future of Business blog, click here.

To find out more about how PA can help your organisation get the most from smart technology, click here or contact us now.


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