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Trade Promotion: Stop Managing And Start Optimizing

Colby Sheridan

Like most consumers, I like a good deal.  Finding products I like discounted at the store shelf is always great and may even prompt me to buy before I need to just to take advantage of the trade promotions planninglower price.  And, I’m also like most consumers in that I’m much more willing to try a new product for the first time if it’s available on promotion.  I often wonder, though, what’s in it for the companies that make the products I buy?  Do my purchasing behaviors resulting from their promotions actually help strengthen their brands, or do the promotions influence consumers like me to buy only when there’s a promotional discount?

Maximizing your ROI with trade promotion optimization

There’s an old saying that goes something like, “I know that 50% of my promotions are profitable but I don’t know which 50%.”  For most consumer products companies, planning and executing consistently successful – let alone profitable – promotions remains elusive.  Why?  Historically it’s been difficult to monitor actual results from past promotions to determine what worked well.  It’s also been challenging to test the potential impact of variables that might influence promotion performance to determine which combination of price, promotional vehicles, time periods and other factors will generate the best results.   And, perhaps most importantly, the goal should be to get consumers to buy products consistently at the right price and the right time rather than relying on promotions alone to drive revenue and volume.

Instead of managing trade promotions to drive revenue and sales volume, consumer products companies can now achieve so much more by investing in innovative technologies for trade promotion optimization that help them continuously review sales performance for both promoted and non-promoted items, analyze promotion performance and consumer sell through  in real time, and leverage that information to optimize planned promotions to maximize overall revenue, volume and profitability for both themselves and their retailers.

In a recent interview, Simon Ellis, practice director with IDC Manufacturing Insights, talked about the key characteristics of companies that are benefiting from trade promotion optimization. Among these companies, Ellis has found that:

  • The business process of trade promotion optimization is cross-functional – while the responsibility still falls on sales, the accountability is more broadly distributed across supply chain, marketing, and finance.
  • Technology plays a key role in delivering true collaborative trade promotion optimization by helping companies collect and analyze large amounts of data in real time – and enabling business users to instantly access data from any mobile device.
  • Business strategies that focus more on optimizing promotional outcomes, rather than simply reducing promotional budgets, often also result in cost savings ranging from 10 to 20%.

Expanding the group of stakeholders that contributes to the promotion optimization process while simultaneously leveraging broader and more granular demand data in real time accelerates promotion planning cycles, adds additional dimensions to planning models to improve forecast accuracy and increase available optimization options and drives both top and bottom-line benefits – for both consumer products companies and retailers.

Nothing ventured, nothing gained

While companies that focus on managing trade promotions can be successful in driving sales volume, Ellis says that companies that invest in optimization benefit from cost savings, process improvements, predictable demand lift, personalized engagements, and increased collaboration. These benefits can ultimately drive sustainable increases in baseline volume, requiring less frequent promotions to achieve overall revenue and volume targets while simultaneously creating opportunities to re-direct promotion spend to focus on only the most targeted, effective and profitable promotions.   And, because retailers are already giving preference to the suppliers who are able to optimize both promoted and non-promoted  volume, trade promotion optimization is becoming essential to maintaining a competitive edge.

For more information about how your consumer products company can optimize trade promotion, explore the IDC Manufacturing Insights paper for insights and best practices here

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colbysheridan

About colbysheridan

Colby Sheridan is the Global Director of Sales and Trade Management Solutions, Consumer Products at SAP. He leads the team that is revolutionizing the trade management process. His solution enables CP manufacturers to take a collaborative business planning approach with their retailers like never before, through the efficient creation of customer-specific plans aimed at driving profitable growth.

Zhena’s Gypsy Tea Brews Sustainable Growth On Cloud ERP

David Trites

Recently I had the pleasure of hosting a podcast with Paula Muesse, COO and CFO of Zhena’s Gypsy Tea, a small, organic, fair-trade tea company based in California, and Ursula Ringham from SAP. We talked about some of the business challenges Zhena’s faces and how the company’s ERP solution helped spur growth and digital transformation.

Small but complex business

~ERP helped Zhena’s sustain growthZhena’s has grown from one person (Zhena Muzyka) selling hand-packed tea from a cart, into a thriving small business that puts quality, sustainability, and fair trade first. And although the company is small its business is complex.

For starters, tea isn’t grown in the United States, so Zhena’s has to maintain and import inventory from multiple warehouses around the world. Some of their tea blends have up to 14 ingredients, and each one has a different lead time. That makes demand-planning difficult. In addition, the FDA and US Customs require designated ingredients be traced and treated a certain way to comply with regulations.

Being organic and fair trade also makes things more complicated. Zhena’s has to pass an annual organic compliance audit for all products and processing facilities. And all products need to be traceable back to the farms where the tea was grown and picked to ensure the workers (mostly women) are paid fair wages.

Sustainable growth

Prior to implementing its new ERP system, Zhena’s was using a mix of tools like QuickBooks, Excel, and paper to manage the business. But to sustain growth and ensure future success, the company had to make some changes. Zhena’s needed an integrated software solution that could handle all facets of the business. It needed a tool that could help with cost control and profitability analysis and facilitate complex reporting and regulatory requirements.

The SAP Business ByDesign solution was the perfect choice. The cloud-based ERP solution reduced both business and IT costs, simplified processes from demand planning to accounting, and enabled mobile access and real-time reporting.

Check out the podcast to hear more about how Zhena’s successfully transformed its business by moving to SAP Business ByDesign.

 This article originally appeared on SAP Business Trends.

Building a successful company is hard work. SAP’s affordable solutions for small and midsize companies are designed to make it easier. Simple to install and use, SAP SME Solutions help you automate and integrate your business processes to give real-time, actionable insights. So you can make decisions on the spot. Find out how Run Simple can work for you. Visit sap.com/sme.

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David Trites

About David Trites

David Trites is a Director of SAP Global Marketing. He is responsible for producing interesting and compelling customer stories that will humanize the SAP brand, support sales and marketing teams across SAP, and increase the awareness of SAP in key markets.

Haier Asia Builds A Digital Platform To Speed Innovation And Win Consumers’ Loyalty [VIDEO]

Dinesh Sharma

08 Apr 2013 --- Intersection, Germany. --- Image by © Markus Hanke/www.MarkusHanke.de/CorbisFew words scare the corporate world like the term “disruption.” No matter the language, disruption conjures the fear of dilution, alteration, and disturbance. And as the world becomes increasingly hyperconnected, disruption seems to be an ever-present threat.

Nevertheless, the C-suite is remaining vigilant by embracing the digital economy as the new reality. According to a recent study conducted by the Economist Intelligence Unit, 80% of executives view hyperconnectivity positively – indicating that it presents more opportunities than threats. All the while, they are carefully watching the competitive landscape and anticipating the arrival of overnight digital sensations and the inventiveness of long-time adversaries.

However, this is only one side of the transformational change hyperconnectivity is bringing. Disruption is not just happening on the corporate side of the consumer market – consumers are steadily disrupting everything a business touches.

The secret? Go beyond the competition to find disruptive opportunity

Not that long ago, most businesses followed a one-time transaction model. They would manufacture the product and ship it to the retailer, and consumers would purchase it. However, hyperconnectivity has changed the rules – making this experience a distant memory.

Consumers are more connected to information and no longer interested in listening corporate rhetoric. By drastically changing everything in our lives, the Internet is giving more power to the consumer, putting them in a position to guide the conversation and dictate product and service offerings. From this perspective, it is easy to see that hyperconnectivity and its impact on social behavior are the true disruptors.

Haier Asia, a top-ranking multinational consumer electronics and home appliances company, is one of those few companies that quickly recognized how hyperconnectivity is powering consumer-based disruption. “When you look around, no consumer life business is making money. Why is that? Margins are so slim,” cites Yoshiaki Ito, president and CEO of Haier Asia. “Consumers are far, far faster than manufacturers because they are getting new information on a daily basis. In the meantime, traditional companies produce their products – taking 24 months. So the gap is just widening every second.”

Instead of surrendering to these challenges, Haier decided to disrupt itself and the market it serves. With a two-prong approach to digital transformation, the company created a service-based model to seize the potential of new consumer behaviors and accelerate its product development cycles.

“My strategy for Haier Asia is to double up the digital platform. This is a great opportunity to bring us to the next level by becoming a services provider and gaining a steady stream of new revenue,” says Ito.

How did Haier take advantage of hyperconnectivity to gain the attention of stakeholders and consumers? Watch the video below to find out.

This article originally appeared on SAP Business Trends.

Want more insight on managing digital disruption? See Three Keys To Winning In A World Of Disruption.

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Dinesh Sharma

About Dinesh Sharma

Dinesh Sharma is the Vice President, Marketing, Internet of Things, at SAP. He is a GM-level technology executive with leadership, technical innovation, effective strategic planning, customer and partner engagement, turnaround management and focused operational execution experience at both large enterprise and startup companies.

Live Businesses Deliver a Personal Customer Experience Without Losing Trust

Lori Mitchell-Keller, Brian Walker, Johann Wrede, Polly Traylor, and Stephanie Overby

Trust is the foundation of customer relationships. People who don’t trust your business are not likely to become or remain customers.

The trust relationship has taken some big hits lately. Beloved brands like Chipotle and Toyota have seen customer trust ebb due to public perception of their roles in safety issues. Consumers continue to experience occasional data breaches from large brands.

Yet these traditional threats have short half-lives. The latest threat could last forever.

Most customers claim they want personalization across all the channels in which they interact with companies. Such personalization should create long-term loyalty by creating a new level of intimacy in the relationship.

sap_Q216_digital_double_feature3_images2But that intimacy comes at a high price. For personalization to work, brands need to gather unprecedented amounts of personal information about customers and continue to do so over the course of the relationship. Customers are already wary: 80% of consumers have updated their privacy settings recently, according to an article in VentureBeat.

Companies must get personalization right. If they do, customers are more likely to purchase again and less likely to switch to a competitor. Personalization is also an important step toward the holy grail of digital transformation: becoming a Live Business, capable of meeting customers with relevant and customized offers, products, and services in real time or in the moments of customers’ choosing.

When done wrong, personalization can cause customers to feel that they’ve been deceived and that their privacy has been violated. It can also turn into an uncomfortable headline. When Target used its database of customer purchases to send coupons for diapers to the home of an expectant teen before her father knew about the pregnancy, its action backfired. The incident became the centerpiece of a New York Times story on Target’s consumer intelligence gathering practices and privacy.

Straddling the Line of Trust

Customers can’t define the line between helpful and creepy, but they know it when they see it.

Research conducted by RichRelevance in 2015 made something abundantly clear: what marketers think is cool may be seen as creepy by consumers. For example, facial-recognition technology that identifies age and gender to target advertisements on digital screens is considered creepy by 73% of people surveyed. Yet consumers were happy about scanning a product on their mobile device to see product reviews and recommendations for other items they might like, the survey revealed. Here’s what else resonates as creepy or cool when it comes to digital engagement with consumers, courtesy of RichRelevance and Edelman Berland (now called Edelman).

Creepy

  • Shoppers are put off when salespeople greet them by name because of mobile phone signals or know their spending habits because of facial-recognition software.
  • Dynamic pricing, such as a digital display showing a lower price “just for you,” also puts shoppers off.
  • When brands collect data on consumers without their knowledge, 83% of people consider it an invasion of privacy, according to RichRelevance’s research, and 65% feel the same way about ads that follow them from Web site to Web site (retargeting).

Cool

  • Shoppers like mobile apps with interactive maps that efficiently guide them to products in the store.
  • They also like when their in-store location triggers a coupon or other promotion for a product nearby.
  • When a Web site reminds the consumer of past purchases, a majority of shoppers like it.

There are no hard-and-fast rules about which personalization tactics are creepy and which are cool, but trust is particularly threatened in face-to-face interactions. Nobody minds much if Amazon sends product recommendations through a computer, but when salespeople approach customers like a long-lost friend based on information collected without the customer’s knowledge or permission, the violation of trust feels much more personal and emotional. The stage is set for an angry, embarrassed customer to walk out  the door, forever.

sap_Q216_digital_double_feature3_images3It doesn’t help that the limits of trust shift constantly as social media tempts us to reveal more and more about ourselves and as companies’ data collection techniques continue to improve. It’s easy to cross the line from helpful to creepy or annoying (see Straddling the Line of Trust).

Online, customers are similarly choosy about personalization. For example, when online shoppers are simply looking at a product category, ads that matched their prior Web-browsing interests are ineffective, an MIT study reports. Yet after consumers have visited a review site to seek out information and are closer to a purchase, personalized content is more effective than generic ads.

Personalization Requires a Live Business

Yet the limits of trust are definitely shifting toward more personalization, not less. Customers already enjoy frictionless personalized experiences with digital-native companies like Uber, and they are applying those heightened expectations to all companies. For example, 91% of customers want to pick up where they left off when they switch between channels, according to Aspect research. And personalization is helpful when you receive recommendations for products that you would like based on previous in-store or online purchases.

sap_Q216_digital_double_feature3_images-0004Customers also want their interactions to be live—or in the moment they choose. Fulfilling that need means that companies must become Live Businesses, capable of creating a technological infrastructure that allows real-time interactions and that allows the entire organization—its structure, people, and processes—to respond to customers in all the moments that matter.

Coordinating across channels and meeting customers in the right moments with personalized interactions will become critical as the digital economy matures and customer expectations rise. For instance, when customers air complaints about a brand on social media, 72% expect a response within an hour, according to consulting firm Bain & Company. Meanwhile, an Accenture survey found that nearly 60% of consumers want real-time promotions; 48% like online reminders to order items that they might have run out of; and 51% like the idea of a one-click checkout, where they can skip payment method or shipping forms because the retailer has saved their preferences. Those types of services build trust, showing that companies care enough to understand their customers and send offers or information that save them time, money, or both.

So while trust is difficult to earn, once you’ve earned it and figured out how to maintain it, you can have customers for life—as long as you respect the shifting boundaries.

“Do customers think the company is truly acting with their best interests at heart, or is it just trying to feed the quarterly earnings beast?” asks Donna Peeples, a customer experience expert and the former chief customer experience officer at AIG. “Customer data should be accurate and timely, the company should be transparent about how the data is being used, and it should give customers control over data collection.”

sap_Q216_digital_double_feature3_images-0005How to Earn Trust for a Live Business

Despite spending US$600 billion on online purchases, U.S. consumers are concerned with transaction privacy, the 2015 Consumer Trust Survey from CA Security Council reveals. These concerns will become acute as Live Businesses make personalization across channels a reality.

Here are some ways to improve trust while moving forward with omnichannel personalization.

  • Determine the value of trust. Customers want to know what value they are getting in exchange for their data. An Accenture study found that the majority of consumers in the United States and the United Kingdom are willing to have trusted retailers use some of their personal data in order to present personalized and targeted products, services, recommendations, and offers.
    “If customers get substantial discounts or offers that are appealing to them, they are often more than willing to make that trade-off,” says Tom Davenport, author of Big Data at Work: Dispelling the Myths, Uncovering the Opportunities. “But a lot of companies are cheap. They use the information but don’t give anything back. They make offers that aren’t particularly relevant or useful. They don’t give discounts for loyalty. They’re just trying to sell more.”
  • Let customers make the first move. Customers who voluntarily give up data are more likely to trust personalization across the channels where they do business. Mobile apps are a great way to invite customers to share more data in a more intimate relationship that they control. By entering the data they choose into the app, customers won’t be annoyed by personalization that’s built around it.
    For example, a leading luxury retailer’s sales associates may offer customers their favorite beverages based on information they entered into the app about their interests and preferences.
  • Simplify data collection and usage policies. Slapping a dense data- use policy written in legalese on the corporate website does little to earn customers’ trust. Instead, companies should think about the customer data transaction, such as what information the customer is giving them, how they’re using it, and what the result will be, and describe it as simply as possible.
    “Try to describe it in words so simple that your grandmother can understand it. And then ask your grandmother if it’s reasonable,” suggests Elea McDonnell Feit, assistant professor of marketing at Drexel University’s LeBow College of Business. “If your grandmother can’t understand what’s happening, you’ve got a problem.”
    The use of data should be totally transparent in the interaction itself, adds Feit. “When a company uses data to customize a service or offering to a customer, the customer should be able to figure out where the company got the data and immediately see how the company is providing added value to the customers by using the data,” Feit says.
  • Create trust through education. Yes, bombarding customers with generic offers and pushing those offers across the different Web sites they visit may boost profits over the short term, but customers will eventually become weary and mistrustful. To create trust that lasts and that supports personalization, educate the customers.

Procter & Gamble’s (P&G’s) Mean Stinks campaign for Secret deodorant encourages girl-to-girl anti-bullying posts on Twitter, Facebook, and Instagram. The pages let participants send apologies to those they have bullied; view videos; and share tips, tools, and challenges with their peers.

P&G has said that participation in Mean Stinks has helped drive market share increases for the core Secret brand as well as the specific line of deodorant promoted by the effort. Offering education without pushing products or services creates a sense that companies are putting customers’ interests before their own, which is one of the bedrock elements of trust. Opting in to personalization seems less risky to customers if they perceive that companies have built up a reserve of value and trust.

“Companies that do personalization well demonstrate that they care, respect customers’ time, know and understand their customers and their needs and interests,” says Peeples. “It also reinforces that interactions are not merely transactions but opportunities to build a long-term relationship with that customer.”

Laying the Foundation for Live, Personalized Omnichannel Processes

sap_Q216_digital_double_feature3_images-0006Creating a personalized omnichannel strategy that balances trust and business goals starts with knowing the customer. This can happen only when multiple aspects of your business are coordinated in a live fashion. But marketers today struggle to collect the kind of data that could drive more meaningful connections with customers. In an Infogroup survey of more than 500 marketers, only 21% said they are “very confident in the accuracy and completeness of their customer profiles.” A little over half of respondents said they aren’t collecting enough data overall.

Collecting enough of the right types of data requires more holistic data-collection techniques:

  • Take advantage of the lower costs for processing and storing terabytes of data, and develop a data strategy that combines and crunches all the customer data points needed to drive relevant interactions. This includes transactional, mobile, sensor, and  Web data.
  • Social media analytics is also a central tactic. Social profiles and activity are rich sources of data about behavior and character, merging what people buy or look for with their interests, for instance. Such data can feed predictive analytics and personalization campaigns.
  • Experiment with commercial tools that can filter and mine the data of customers and prospects in real time. This is a significant step beyond basic demographic data collections of the past.

sap_Q216_digital_double_feature3_images-0007Once the necessary data is available, companies need the technology, processes, and people to make sensible use of it in an omnichannel personalization strategy. Only when a company is organized as a Live Business can that happen. Here’s how your company can move toward being a Live Business:
Be live across channels. Having a consistent customer journey map across channels is core to omnichannel personalization. It requires integration across multiple systems and organizational silos to enable core capabilities, such as inventory visibility and purchase/pickup/return across channels. This integration also constitutes a major chunk of the transition to becoming a company that can act in the moments that matter most to customers. If all channels can sync in real time, customers can get what they want in the moment they want it.

Free the data scientists. Marketing rarely has full control over the omnichannel experience, but it is the undisputed leader in understanding customer behavior. While data science is part of that understanding, it has traditionally played a background role. Marketers need to bring the data scientists into efforts to sort through the different options for digitizing the omnichannel experience. The right data scientists understand not only how to use the tools but also how to apply the data to make accurate decisions and follow customers from channel to channel with personalized offers.

Walgreens’ Technology Approach to Personalization

Walgreens is a leader in building the kind of technology base that can enable real-time, omnichannel personalization. Its digital transformation is 16 years in the making, according to Jason Fei, senior director of architecture for digital engineering at Walgreens. At the heart of its infrastructure is a Big Data engine that feeds many customer interaction and omnichannel processes, including customer segmentation. The company adds third-party systems in areas such as predictive analytics and marketing software. Walgreens has a cloud-first strategy for all new applications, such as its image-processing and print-ordering applications. Other elements of the drugstore chain’s technology platform include:

  • Application programming interface (API)-driven architecture. Walgreens’ APIs enable more than 50 partners to connect with its apps and systems to drive customer-facing processes, including integrations with consumer wearables to drive reward points for healthy habits, as well as content partnerships with companies such as WebMD. “With APIs we can be an extensible business, allowing other companies to connect to us easily and help in the digital enablement of our physical stores,” Fei says.
  • Responsive Web sites. The company’s Web site is built using responsive and adaptive design practices so that the site automatically adapts to the consumer’s device, whether that is a mobile phone, tablet, or desktop computer. “We have a single code base that runs anywhere and delivers a consistent, optimized experience to all of our customers,” Fei says.

Making the Most of the Technology Base

This technology foundation has allowed Walgreens to push forward in personalization. For example, according to Fei the company uses sophisticated segmentation and personalization engines to drive outbound e-mail and text campaigns to customers based on their purchase history and profile. “We don’t blast out messages to customers; we use our personalization recommendations to be relevant,” says Fei.

The next phase of this strategy is to develop live inbound personalization tactics, such as recognizing customers when they come back to the Web site and tailoring their experience accordingly. These highly automated, self-learning systems improve over time, becoming more relevant at the moment a customer logs back in.

“When you search for a product, the Web site will take a good guess of what you might actually want. If you always print greeting cards at the same time of year, for example, the system would automatically deliver content around that,” Fei explains. “Everyone comes to Walgreens with a mission, so we can be very targeted with our communications.”

Walgreens’ mobile app combines real-time personalization with convenience. You can scan a pill bottle to refill a prescription, access coupons, send photos from your phone to print in the store, track rewards, and find the exact location of a product on the shelf.

Walgreens also recently deployed a new integrated interactive voice-response system that includes a personalization engine that recognizes the individual, says Troy Mills, vice president of customer care at Walgreens. The system can then predict the most probable reason for the customer’s call and quickly get them to the right individual for further help.

How to Get Started with Live Customer Experiences

sap_Q216_digital_double_feature3_images-0008As Fei can attest, getting Walgreens’ omnichannel and personalization infrastructure to this point has involved a lot of work, with much more to come. For companies just now embarking on this journey, especially midsize and large companies, getting started will mean overhauling an outdated and ineffective technology infrastructure where duplicate systems and processes for managing customer data, marketing programs, and transactions are common.

A bad internal user experience often transcends into a bad customer-facing experience, says Peeples. “We can’t afford the distractions of the latest app or social ‘shiny penny’ without addressing the root causes of our systems’ issues.”

Live Business Requires Striking the Right Balance

The boundaries of trust are a moving target. Sales tactics that used to be acceptable decades ago, such as the door-to-door salesperson, are unwelcome today to most homeowners. And consumers’ expectations are unpredictable. At the dawn of social media, many people were anxious about their photos unexpectedly showing up online. Now our identities are tagged and our posts and photos distributed and commented on regularly.

But while consumers are getting more comfortable with online technology and its trade-offs, they won’t put up with personalization efforts that make use of their data without their knowledge or permission. That data has value, and customers want to decide for themselves when it’s worth giving it away. Marketers need to strike the right balance between personalization and a healthy respect for the unique needs and concerns of individuals. D!

 

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Lori Mitchell-Keller

About Lori Mitchell-Keller

Lori Mitchell-Keller is the Executive Vice President and Global General Manager Consumer Industries at SAP. She leads the Retail, Wholesale Distribution, Consumer Products, and Life Sciences Industries with a strong focus on helping our customers transform their business and derive value while getting closer to their customers.

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Technology Trends Shaping The Way Utilities Work

Lloyd Adams

No one needs to tell you that the digital revolution is here to stay. Digital business is big business. This is especially true now that one-time novelties like the Internet and mass-scale analytics have exited their infancies. It’s safe to assume that while the digital transformation is not yet complete, it has extended to almost every corner of industry.

Chief among the ways in which technology is changing the world is in the realm of utilities. How we get our power matters, as does how it’s metered and distributed. Too little of it and the system isn’t working; too much and it becomes wasteful and inefficient. A happy middle ground both satisfies consumers and conserves resources. So how might the utility organizations use digital resources to make utilities more efficient?

How can we use technology to create a better world?

The wide array of digital resources makes it easier than ever before for utility companies to track their operations. This in turn enables them to respond to energy supply and demand more immediately. It also allows them to deliver electricity in a more responsive and less wasteful way.

The smart grid is a great example of how hyperconnectivity and supercomputing combine. Together they enable a much smarter means of energy distribution. The smart grid uses smart-meter technology in homes, renewable energy, and new data-driven systems to maintain efficient operations and save non-renewable resources.

The digital energy network is another cutting-edge idea. It enables a two-way flow of both power and information. Large stakeholders still help control the flow of electricity and energy. But now consumers can help as well. The result? Better efficiency, less waste.

Who showcases digital business models at their best?

Luckily, some utility front-runners are offering valuable insight into the future for all. Consider CenterPoint Energy. It integrates information technology and operational technology to emphasize streamlined results and conservation.

Or the Tokyo Electric Power Company. It aims to install 27 million residential smart meter devices by 2020. These meters track energy usage and relay it back to the central utility company. Such metering will help the company make better, greener decisions about energy usage.

Then there’s Tesla, which already has a reputation for cutting-edge environmentalism. Its Powerwall lithium ion battery enables homes to store solar energy. This historically tricky feat will allow residents to “go net zero.” That means keeping their home off the grid entirely.

Each digital business models showcases a different strategy. Together, these strategies can transform our current energy economy. The result? Environmental resource management on a scale never before seen.

Will you benefit from going digital?

Yes. Like any powerful technology, these digital business models reward utility companies who adopt them early. Using digital tools to monitor operations and output has many benefits. You can grow your company for stakeholders and shareholders. You can differentiate from competitors. And you can clean up power for the sake of your city and the world.

Of course, most likely you’ve already incorporated a fair bit of digital technology into your operations. If you’re like many utility companies, though, there’s much more you can do. Engage with customers more meaningfully by making them partners in the metering process. Digitize your business to streamline information gathering. Pair up with same or similar businesses to achieve economies of scale

These approaches enable energy portfolio management on scales never before seen. The result for your business goes well past innovation. You’ll also see differentiation, growth, and competitiveness on a whole new level.

For more information on Digital Transformation for Utilities, click here.

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Lloyd Adams

About Lloyd Adams

Lloyd Adams is national vice president of Utilities for SAP North America. In this role, he is responsible for sales and customer relations in the SAP Utilities North America practice.