How technology can help a utilities industry in flux
From major shifts in workforce demographics to organizational restructuring and new technologies, the utilities industry is undergoing intense and serious change.
We examined these factors and others in a recent webinar, ‘Are you reinventing your organization to adapt to the speed of the market?’, which I co-hosted with PAC Principal analyst Nick Mayes.
In this blog post I’ll re-cap our findings and explain how technology can help you cope with the changing face of this industry.
Download our Workplace 2025 report to learn more about the workplace challenges facing utilities
An industry with an identity crisis
Changes in public attitudes and regulation have left many utilities companies struggling to adapt.
Environmental awareness and public desire for renewable energy is threatening their traditional offerings, for example, meaning they need to encourage customers to use less energy while competing with other utilities firms offering the same product.
There’s also increased pressure from regulators for transparency over charges and pricing, which is resulting in high customer churn.
Big players in particular are feeling the effects. EDF Energy and Centrica lost a combined total of 1.75 million customers in 2017.
So utilities companies are having to adapt by taking one of three paths:
- Transforming core business: refocusing on low carbon sources of energy or offering grid technology or home management systems.
- Consolidating: coming together through mergers and acquisitions (M&A). There are several high-profile cases of this in recent years, such as Dominion Energy Inc. buying Scana Corp or Sempra Energy buying Oncor Electric Delivery Co. The number of utilities M&A deals is at a record high – there were 79 in 2017 alone.
- Diversifying and disrupting: investing in smaller start-ups or building their own incubators to develop new technology and ways of doing business.
The successes so far
Our 2025 research uncovered some serious success stories for the utilities sector.
It’s ahead of other industries when it comes to investing in social enterprise platforms, for example, with 65% of utilities firms doing this already.
As remote working becomes more popular thanks to the growth of the boundary-less workplace, platforms like these will be key to creating the right company culture and an enjoyable employee experience, so utilities firms are already well placed to attract and retain talent.
Another success in utilities is in the application of augmented reality (AR).
There have already been plenty of use cases for this technology, like allowing engineers in the field to overlay complex site diagrams with what they’re already looking at.
It’s particularly useful for helping senior engineers pass skills on to the next generation, which will be crucial as we enter the multi-generational workplace in 2025.
A great example for utilities companies to emulate is Italy’s Enel.
Enel was recently listed among the world’s 20 best employers by Forbes magazine thanks to its flexible and smart working practices and its “My Best Failure” initiative. The initiative encourages employees to share negative experiences with their colleagues to promote best practice and safety.
If other utilities firms can succeed in embracing the workplace changes, they will be better placed to overcome issues like high customer churn and increased regulatory pressure to find sustained success in the future.
The challenges still to face
There’s a clear need for utilities firms to revolutionise quickly in order to stay relevant. But our research shows there are a few things preventing that.
82% admit current working hours and practices are not flexible enough (vs 79% in other sectors).
Despite utilities firms doing well in other areas of attraction and retention, this lack of flexibility may prove a serious problem.
The new generation of talent are looking for a career which works with their lifestyle. If utilities companies can’t provide this, they will struggle with recruitment – particularly of the very best talent.
Flexibility was a success factor that helped Enel become a Forbes Top 20 employer. And we’ve seen it empower our own customers. We worked with multinational utility company Centrica to devise a solution for facility-based workers who wanted mobile access to deal with issues on location.
We built a user-centric digital platform to enable 45,000 global employees to collaborate across the company with scalable and flexible services, with mobility at its heart.
Open innovation is another growing challenge for the utilities industry.
Technology is increasingly turning markets into ecosystems, meaning competitors are soon going to become friends. This is going to be a problem for utilities companies, since 78% admit their current workplace tech doesn’t help them engage or innovate with external partners.
Looking to the future
Cybersecurity is the next big question for the utilities industry. Because utilities are a part of critical national infrastructure and hold valuable data on customers and national energy resources, they’re appealing targets for cybercriminals.
But as much as utilities cybersecurity needs to be strong, it also needs to be seamless to ensure employees can still work quickly and efficiently.
This will be a continual process of investment and refinement. It’s not a quick fix that can be solved once and for all. Cybersecurity has to develop all the time to stay ahead of cybercriminals.
The path to 2025
The utilities industry is changing at an exponential rate, and technology is at the centre of this change.
Utilities companies must avoid the mistakes of the past. The industry doesn’t have the best reputation for implementing big change management programmes, which is a valuable lesson.
The golden rule here is to be iterative and base your digital transformation strategy on a good understanding of where your company stands today.
External help will be vital for cybersecurity and creating a compelling employee experience. And while it’s clear utilities is an industry in transition, there are a lot of positive signs.
If utilities firms can take hold of the opportunities offered by workplace change, they could prepare themselves to successfully transform, consolidate or diversify.
This will take the industry out of flux and into the future – and it all starts with a digitally enabled workplace.
Watch the Workplace 2025 webinar to find out more.
Interested in learning more about Workplace 2025? Here’s how the manufacturing sector is building the workplace of the future.