Birmingham Utility Week Congress in October 2015 unveiled interesting support initiatives to boost innovation in the utilities sector:
- 50 million meters still need to be installed and to help with customer adoption, energy suppliers are supported by the SmartMeter GB programme (http://www.smartenergygb.org/);
- The new Catapult programme (https://www.catapult.org.uk/) aims - with a £6 billion plan - to help take services and products to market so as to exploit the opportunities from the transformation of Britain's Energy Systems. Innovations are expected in heat, combustible, gases and electricity. Evidence on how the energy system can transform still remains to be delivered.
Beyond energy systems and smart meters, I personally noticed two areas that utilities could modernize to improve their competitiveness and business performance.
Opportunity #1: Marketing
“Customer service” was a buzz word at Utility Week Congress but the word “marketing” appears to be banned from utilities vocab’. Yet, according to Cathryn Ross, OFWAT CEO, PR19 plan includes “Working with customers and communities to provide what they want.”
It’s all about marketing, in my books!
Source: Ovum 2013
Today, 60% of all companies with a revenue higher than £330m and 10% of companies turning over £13-£330m have adopted marketing automation systems (Raab Associates). The top 3 benefits to users are:
- increased lead generation and
- better understanding of customer needs
- improved efficiencies (Regalix).
Looking at B2B in particular, a quarter of businesses are still not using Marketing Automation at all (CommuniGator) and utilities rank among laggards as they are not even actively considering this innovative solution. (Ovum)
Increased competition and a sudden interest in “the customer” will no doubt drive utilities early adopters to test marketing automation systems - HubSpot, Marketo, Eloqua, Unica, Silverpop, act-on. More on this matter after Utility Week Congress 2016!
Opportunity #2: Management
Top management with utilities has a tough time ahead:
- Regulators pressuring them to deliver more (services to customers) for less (price) and energy trend driving prices down. The famous PR19 “doing more for less” mentioned by Cathryn Ross;
- Ageing infrastructure calling for increased maintenance;
- Multiplication of new sources of power generation implemented in locations remote from existing networks;
- Baby boomers' retirement (Water Research Foundation) and, as a result, the need to attract Millennials, 80% of which are mobile (IDC).
All management boards are seeking cost reductions, some outsourcing part of their activities - e.g. maintenance, customer services - hereby adding dependence on subcontractors and the need for improved collaboration throughout the value chain.
Others are exploring agile management techniques as Millennials, who are tomorrow’s Managers, will bring their own devices to work and want to manage in a more intuitive, simple and efficient way. Management is therefore another area where innovation can help.
Think big. Start small. Scale up fast.
With the shift from ERP systems to innovative and specialized SaaS products hosted on the cloud, CIOs clearly are the instigators of change. (Is The CIO The Next VP Of Electricity? | TechCrunch).
Myron Hrycyk, former Severn Trent CIO, is an acclaimed digital visionary expert. One of his many memorable comments at Utility Week 2015 Congress included “Digital technology gives utilities a competitive differentiator and not just another IT Strategy.”
He advises to “Think big yet start small. If you see if does not work, throw it away. If it works, scale up fast.”
Cloud solutions are a smart way to test innovative marketing and management solutions with a limited investment, often real corporate value and quick results.
*About the author: Virginie Vinel, Innovation commercialisation expert
Virginie has helped HEI Researchers and CEOs with Enterprise and SMEs take their innovations to market for the past 24 years. Together with a team of utilities experts, Virginie recently developed Agily, an innovative business performance management cloud solution that delivers extra productivity and savings to utilities. It also dramatically improves the communication between utility companies and their subcontractors particularly regarding the performance monitoring of services.*
Virginie Vinel MCIM
CEO, Agily3 Ltd