The utilities firms of the future will live or die by digital – here’s why
Utilities has historically been viewed as a continuous manufacturing or process industry. You have a base load, and then you need to service the peaking loads according to the time of the day.
Now, however, the sector is undergoing a period of enormous transformation.
Traditionally it was underpinned by what I call ‘the four Cs’:
- Carbon-based production (predominant mix)
- Central energy stations
But more recently we’ve seen that framework disrupted by ‘four Ds’.
Between the carbon and central power stations you have decarbonisation. Then you have distributed generation between the central power stations and connectors, which includes smart grids. Next is digital engagement with your customers. And finally, you have the edge-to-edge digitalisation across the whole chain.
What does all this mean for utilities organizations?
It means they need to look at a systemic response to each of those four disruptive elements.
And that approach needs to protect and enhance both the top and bottom line – delivering new types of value to customers while improving and removing wasteful processes.
The answer is a fully connected and agile workplace that can quickly adapt to changing market forces.
Why a connected workplace matters
Solving the above challenges means fundamentally shifting the way you deploy your IT assets.
Rather than creating large assets that end up only partially deployed, in future, you’ll need to focus on multiple smaller assets that can be deployed more efficiently – connected assets and services.
The cloud, industrial internet of things (IoT) and artificial intelligence (AI) are central to delivering this vision of the future.
But it’s equally important to remember that all technology innovation must be human-centric. In the case of the utilities industry, that means putting the enabled worker at the centre of any disruption.
Digital transformation is as much about building a culture as it is about technology and processes. To do that successfully you can’t take the human out of the equation – they absolutely have to be front and centre.
Another key influence on your ability to respond to customer or competitor market forces will be the way you collect and handle data.
This is one of the biggest benefits of deploying a digital workplace: transitioning from a system of records to a system of engagement, and finally to a system of intelligence.
The utilities sector is undergoing tectonic shifts. Everything from the way people buy energy to the impact of climate change is having an influence. Being able to draw relevant insights in a continuously agile way is therefore critical if you want to not only survive but thrive.
And a truly connected workplace is key to that.
End-to-end transformation at two speeds
I’ve talked about the challenges the utilities industry faces and how digital transformation of the workplace can help overcome them. But how do you achieve all that while keeping costs and security risks under control?
The answer lies in end-to-end digitalisation, i.e. ensuring every part of your business – from the point at which customers place orders to the moment energy is delivered into their building – is part of that transformation journey.
There is a problem with that, however: few companies, if any, can afford to do everything at once. Yes, you need to disrupt traditional ways of doing business, but you also need to keep the lights on. It has to be a gradual transition.
The way around this is to take a two-speed approach to IT – getting the most out of the legacy systems you already have while adopting new, cloud-based apps over time where it best serves the business.
But let’s not forget the not-so-subtle elephant in the room: security.
Cybersecurity must be at the forefront of any new technology decision, particularly for utilities firms that hold lots of personal and potentially sensitive consumer data. Both antiquated systems and new technology are susceptible to advanced persistent threats.
For organizations that don’t have a strong enough security capability in-house, however, this means bringing in technology partners who have experience in that field.
That is the key to digital transformation success in utilities or any another industry is the ability to identify critical areas for improvement and develop a roadmap for change. Each situation is different, and the answer lies in co-creation with customers and suppliers to create unique approaches.
Preparing for a virtual future with connected workers
As I mentioned earlier, we’ve already started seeing significant changes across the utilities sector.
In future, we’ll begin to see more of a move away from a purely physical infrastructure to something that is part physical-part virtual. A digital twin of a power plant, for example, that can compare and contrast actual performance to a mathematical model and deliver prescriptive insights.
And these types of simulation will become prolific, dramatically increasing efficiency by enabling you to manage distributed resources to deliver better value to customers. While predictive systems will allow better responses to potential situations out in the field, like a service call before an asset fails, maximizing system uptime.
Making the most of these developments will depend upon your ability to create a workforce that can flex according to needs.
Along with the technology and processes you put in place, the partnerships you seek will also be crucial to achieving this, and will ultimately determine whether you’re able to evolve fast enough in future.
In short: utilities will need to embrace the power of “D”!
Watch the video below to learn more about creating the utilities workplace of the future