Many organizations live in a state of digital awareness — but only a few have already transitioned to coherent execution of a digital transformation roadmap that is based on digitally reimagined business models, business processes, and people’s work.
Gartner argues that a successful digital business transformation needs digital business principles, a digital business blueprint, and a digital business execution plan.
SAP has published the Digital Utilities whitepaper. We believe that market trends and digital technology will transform the role and the business of utilities. We will see a decentralized digital energy network that connects energy service providers with “prosumers” — consumers who produce electricity on their roofs, fuel their electric cars, store it in their basement, or sell it to “the grid.”
A digital transformation roadmap starts with reimagining the business of the future. This process is a joint effort of business, IT, and partners in the digital energy network:
Innovative business models unlock new revenue and profit sources by offering innovative services around supply and demand side management, load balancing, and smart homes/smart businesses.
Business processes use digital technology to reach beyond the four walls of the enterprise and optimize business outcomes by converging information and operational technologies.
Wearable digital technology, automation, artificial intelligence, and learning on-demand will change the role and structure of the workforce.
Reimagining business models, processes, and work runs into limitations of traditional ERP and customer information systems. We need a robust in-memory platform to overcome limitations of combining business transactions with real-time information and Big Data streams.
In-memory computing makes real time real
For years, “in real time” has really meant “recently,” as most business systems operate in batch mode. That’s because real-time interfaces have been complex to create and maintain and haven’t delivered value to business processes that operate on data from past periods. Today, energy companies run their business processes based on real-time events and simulations and predictions of the future. This requires the convergence of information technology (IT) and operational technology (OT) systems, assets talking to assets, new ways to interact with business partners and customers. New digital practices shape the Internet of Things (IoT) and the connected digital economy.
The Internet of Things is one of these topics that are discussed everywhere these days. But what does it actually mean for utilities, and what is really new? After all, utilities have been analyzing data from grid sensors and smart meters for years. What is changing dramatically is the number of devices that deliver more and more granular data in shorter and shorter intervals. The data offer new opportunities and enable insights about asset health, grid load, and consumer behavior.
The network changes everything
Radicati, a U.S. market research firm, claims that the number of mobile devices has outgrown the number of people on the planet. 5.8 billion mobile users — 80 % of the world population — use 8.6 billion devices that connect them into a global people network.
By 2050, the global population is projected to reach 10 billion. Some experts say the demand for electricity, natural gas, and water will double or triple as billions of people join the digital economy, and the use of energy and water will grow while vehicles and mass transit go electric. One thing is clear: The global networked economy needs clean, dependable, and affordable electricity.
This should be a great outlook for power generators, distributors, and retailers, but de-carbonization, deregulation, and decentralization are disrupting the century-old utilities hierarchy. We see a “digital energy network” emerging that reflects new structures of power generation, transmission, distribution, and retail. It will foster new business models and processes and transform work in a competitive and collaborative digital economy.
The consequences are dramatic. Proven utilities business models based on trillions of dollars worth of plants and grids collapse. Rapid technical and social innovation puts new capital investments at risk while new market entrants, such as Google and Tesla, disrupt the value chain. Consumers, communities, and companies go “off the grid” with new wind, solar, and storage technology.
This environment needs ambitious and creative digital leaders to create innovative business models, design efficient, customer-centric business processes, and reimagine how their extended workforce delivers value.
IT must match the pace of business innovators. Large-scale projects must yield to speedboats that squeeze through small windows of opportunity, because digital leaders “take it all.” We see a strong momentum towards cloud technologies that enable fast solutions without capital expenditures. This also fosters a “startup spirit” to reimagine the future and try out innovative ideas. I expect that this entrepreneurial spirit will shape the digital energy network that overlaps and complements the power supply system. All participants — utilities, consumers, and new non-utility players — will use digital innovation to anticipate real-time demand and supply, operate self-healing grids, and shape new customer experience.
SAP technology and cloud solutions around the digital SAP S/4 HANA core make business simple. Energy companies using SAP solutions play in real time in the digital network that enables new business models, innovative business processes, and novel ways to work.
To learn more about digital transformation for utilities, view Utilities. Reimagined for the new economy.