The digital way is the new normal that has pushed the Utility industry to the edge. Either one must transform towards digital innovation or optimize traditional ways of working by leveraging digital technologies. Digital transformation in the utility sector can be seen in how they invest in new lines of business, those where new opportunities are the outcome of digital innovation.
Modern utility faces an array of challenges due to growing demand, stricter regulations, environmental mandates, and consumer expectations. These challenges require strategic technology investment and innovation. Considering advancement in technologies, changing customer expectations, and a shifting economic landscape, mentioned below are some of the business need that industry will witness going ahead –
- Real-time customer communication – Customer service is lagging relative to other industries and needs to be improved
- Demand Management – Rapidly changing customer need force an operating model change
- Competitive Advantage – New technologies and data proliferation can help utilities companies navigate new rules and regulations.
- Resilient decision making – Converge IT and operations technology to support digital needs in operations.
Trends to address the connectivity of operational backend with customer centricity and extend the reach in new ways
Digitize Field Work – To address the challenge for field workers to continue the operations efficiently, technologies like field mobility systems, wearables, video collaboration tools and guided maintenance tools. Also, artificial intelligence (AI), machine learning (ML) and autonomous bots, can help in reducing the workload. The utility field work technology will need to be supported by re-design and integration of people, process and technology, in order to meet enterprise cost, performance and continuous improvement requirements.
Improve Operational Resiliency – Redesign of the processes to sustain utility operations by including technology capabilities for mapping operations processes to specific business goals. Utility industry will towards digitizing customer facing front office work and reduce the cash flow disruptions. As per Gartner the confluence of the 4D megatrends (digitalization, decentralization, decarbonization and democratization) impacting the industry, with greater emphasis on digitalization in the sector.
Technology Optimization and Modernization – IT has to be repositioned as an enabler by performing the transformation e.g. re-examine the volume-based cost drivers to consumption based wherever possible, simplify and standardize to improve efficiencies etc. To focus on value optimization and become digitally enabled, industry is investing on certain transformational technologies has to be adopted such as:
– Based on asset intensive nature of the industry, there is a need for remote monitoring and managing assets, along with predictive maintenance. Real-time connection and monitoring of assets resulting in reduction of failure rate
– Data analytics for planning, managing, efficiency and increasing customer effectiveness. Companies are now employing digital twins, which uses analytics to anticipate breakdown, thus increasing the operational efficiencies
– Business disruption as it eliminates the need for a central authority using the distributed leger technology like Blockchain, making operations faster while being trusted.
– Geospatial platforms and Geographic Information System (GIS) solutions are gaining adoption. Utility industry rely on combination of Enterprise Asset Management (EAM) systems and geospatial platforms/GISs to manage assets and workflows to determine risk. Hence, utilities are increasingly interfacing their EAM solution with an asset investment planning solution.
– Cloud solutions are gaining momentum. However, utility industry largely being a regulated sector, the financial treatment of cloud investment as an Operating Expenditure continues to be an obstacle for broader adoption.
Advancing technology, static demand, heightened environmental awareness, and evolving customer expectations pose numerous financial and operational challenges for the utilities industry. The pandemic has worked as catalyst for digital transformation among utility industry with disruptive forces are compelling utility providers to change their traditional business models and create an imperative to act promptly and decisively. Although transformation has been slow to arrive at the utility sector, companies that do implement digital technologies and adopt new ways of working can deeply benefit from them in the future. The industry needs to harness digital technologies basis the rapid changing customer demands and the need of real-time communication. The industry has many players, so the technologies, challenges and transformations are different for all players in the utility chain. The industry needs to move faster towards digital transformation to be future proof of such situations, changing customer demand and the industry.