How Are Consumers Driving Digitalization Of Utilities?

Judy Cubiss and Ginger Shimp

Utilities keep our everyday lives running efficiently. They bring water, electricity, gas, and more to our homes. We rarely notice them unless they don’t work, or the bill is higher than expected.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) Technology Podcast, caught up with Henry Bailey, global vice president, head of the Utilities Industry Business Unit, SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.  Listen to a short clip below:

SMAC podcast

Bailey says, “Historically, the utilities industry has had a very consistent business model. For a hundred years, utilities basically supplied electric, natural gas, and water to customers. But three or four years ago, things started to change as we saw this disruption in the form of solar renewables, in how the customer wants to be more involved and interactive with the utility. And now it’s really on the utility to meet that demand.”

How are consumers driving digitalization of utilities?

Solar renewable energy and the disruption it has caused demonstrates to utilities that customers want to be more involved and interactive with where their utilities come from and how they’re used. Rather than simply accepting delivery of that utility, they’re demanding a more active role in the process. They want the information they need to decide on their own course of action with the utility.

customers want to be in the know about how they are using their electricity or gas or waterFor many utilities, the idea of going digital could mean opening themselves up to every problem, complaint, or comment imaginable. That can be scary. How do you respond to, and prioritize, these issues? So how can digitization be beneficial to producers, distributors, and consumers?

Utilities don’t really want their customer representative to talk to customers for long periods of time as that is not cost-effective. However, digitization can provide customers with self-service options, giving them information without increasing the actual interaction. This means the customer has the information they need. At the same time, the utility can continue to operate with no significant increase, and possibly even a decrease, in call center costs.

Utilities also are transitioning workers to focus more on the consumer’s needs and engagement. This customer-centric relationship includes building digitization to meet their needs. Whether it’s quickly paying a bill through an app or using the website to take a deep dive into usage, information needs to be available in an intuitive interface.

Where will digitization take utilities in the future? As the lines between products and services continue to blur, the industry is going in directions few may have predicted, such as analytics and machine learning. Analyzing and predicting the behavior of customers from studying data from appliances such as smart meters helps utilities meet demand and provide services.

utilities might consider providing maintenance on applications that use large amounts of energy in the home or potential failures

Because of how supply lines are set up, many consumers view utilities as a monopoly: There’s only one place they can get your electricity, gas, and water. This causes some consumers to question whether they are being treated fairly by the utility. With regulators in place to govern the utility’s actions, limitations are placed on what new technologies can be introduced.

if there is a possibility of risk that could cause disruption in services either perceived or actual it has a negative impact on utilities

New technologies and digitization create transparency, enabling consumers to see previously missing pieces in the system. Smart meters are allowing consumers to see the advantage of technology for both sides. But how do utilities make this transition without causing service disruptions and causing customer service issues? To work with a system that is in a constant state of flux, the right technology must be applied. For digitization, a real-time platform provides the information needed to quickly recognize problems and make fast decisions. With analytics in place, problems can be sorted out within a matter of moments. Here’s how:

 google nest is a line of programmable self-learning sensor-driven Wi-Fi-enabled connected smart products that promise energy efficiency comfort and ssecurity Sensors in appliances send out data showing a change in voltage before losing power for a few houses on a branch line. This same issue shows up in smart meter information for the same locations. Within moments, a transformer may be shut down remotely or a crew is dispatched to check a faulty transformer, saving time and trouble for the customer. An automated text or email is sent out to affected customers, letting them know that power is out temporarily as a transformer issue is resolved. Perhaps the notice even includes a link to a website or app to check progress on the repair and provide a timeframe.

To listen to this episode of Digital Industries for the utilities industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.

Transforming into a truly digital business is much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data and the Internet of Things.

For more on how SAP can help you drive your own digital transformation in the utilities industry, visit us online.


Judy Cubiss

About Judy Cubiss

Judy Cubiss is Global Marketing Lead for Industrial Machinery and Components and Automotive at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.