In today’s digital age, many different industries find themselves in the midst of game-changing disruption as new competitors emerge, empowered by their ability to harness groundbreaking technologies in truly innovative ways.
We are all aware, for example, of the hugely disruptive impact that businesses like Amazon, Airbnb, Uber, and their contemporaries have had on a whole host of well-established industries.
Equipped with an arsenal of new technologies and innovative business models, these firms have revolutionised what it previously meant to do business in these sectors and made the process of digital transformation an absolute imperative for their competitors.
This rampant disruption and transformation is clear to see in industries such as retail, hospitality, and transportation, but the effects of these seismic shifts are being felt elsewhere too.
Indeed, the utilities industry is undergoing one of the most transformational periods in its history, with change becoming the one constant that now characterises this space in markets around the world.
Evolving customer expectations and shifts in the regulatory landscape are combining with the continuous flow of new technologies and the emergence of new types of competitors to make the utilities industry a hotbed of transformation.
Defined business models across the established generation, transmission, and distribution value chain are shifting, and there is now growing recognition among utilities of the need to transform their operations as the industry’s value chain changes around them.
This transformation is altering the landscape of the utilities industry, with the past couple of decades playing host to breathtaking changes worldwide. And the pace of this change is rapidly accelerating.
Perhaps the biggest shift that utilities companies are experiencing is disruption led by the customer, with the deregulation of utilities markets and the introduction of competition creating an opportunity for customers to bring the expectations they have developed in other industries to their engagements with utilities providers.
The pervasive creation of experiences across all channels in other industries has totally shifted the engagement expectations of utilities suppliers as well — the days of focusing purely on the operational engineering side are over.
And it’s not only retailers that must face up to these new realities; utilities organisations across the entire value chain now have no choice but to ensure that their customers, and their customers’ customers, are placed at the centre of their business operations.
Accomplishing this is no mean feat for utilities organisations — customers are mobile and connected, as well as increasingly informed and demanding about engaging in the ways they want and seamlessly accessing the information they need on demand.
Customers want more control over usage and service levels. As such, their engagements with utilities need to be relevant, enjoyable, less complicated, and capable of fundamentally delivering the objectives sought in the first place.
This is not just about creating slick and automated channels at the front end; ensuring transparency and responsiveness across usage, billing, outages, and engineering activities are all critical to meeting customer expectations.
Utilities already taking steps to transform their customer experiences will increasingly find that it will be increasingly necessary for them to transform the rest of their businesses as well — from the way in which information is used to the capabilities they have in place to deliver it.
Of course, different companies operating in different markets find themselves at varying levels of maturity — both in relation to the reality of their market environments and the way they are seeking to respond to the ongoing disruption.
As such, utilities business leaders must determine how their businesses can be transformed within the particular market environments they are operating in. They should begin this process by asking themselves a series of questions.
What transformation is needed to deliver exciting and engaging customer experiences? What steps must be taken to ensure operational excellence? How can traditional utilities compete with new products and services? What are the associated security challenges? And how will the regulatory environment change over time?
This is by no means an exhaustive list, and the questions that need to be answered will vary considerably for different organisations operating in different parts of the value chain. But taking this initial step will be key for kick-starting their own transformation journeys.
Critical to success will be their ability to effectively employ digital technologies across operational functions and the broader utilities value chain in such a way that they can create new ways of operating and changing what it means to run a utilities organisation.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.
