As utilities look to stay relevant, they must shift beyond the simple commodity distribution/retail model. With data at the centre of this shift utilities must navigate some complex considerations to deepen their customer relation.
As utilities look to stay relevant they must shift beyond the simple commodity distribution/retail model. For distribution and vertically integrated utilities their customers are somewhat captive and therefore the challenge is increasing wallet share. While, for retailers, the challenge is enmeshing the existing customer ‘book’ before the cost to retain and acquire outstrips margin. At the centre of both changes is customer data. Customer data being the information that when brought together across IT and OT systems forms a complete picture of customer usage behaviour.
Access to and extracting value from customer data, now more than ever is fraught with risk. While any utility executive will tell you their organisations future is based on the value locked up in their customer data, few have solved the inherent risks and monetised even simplistic use cases.
To fully leverage customer data a utility must successfully solve four problems:
1. Customer data cannot be used for purposes that the customer wouldn’t reasonably expect, without express permission.
This is particularly challenging for utilities where consumer trust is low and there is natural suspicion as to the purpose the data might be used for. Reflect for a moment on how quickly you give away access to your data to enable an application on your phone, execute a web search or subscribe to a news or other content feed. Disruptors or other domains which carry consumer trust have a material advantage when asking for access to customer data!
2. Access to funding for moving beyond ‘commodity sales’ will fail more often than not within traditional investments cases.
Because the investment in the platform for innovation is so significant and the payback on an individual use case difficult to quantify without it being developed, investment committees will struggle to approve expenditure. Business owners need to look to other digital initiatives and the associated agile approach to benefits realisation to be successful. There are also some great ‘as-a-service’ proof of concepts to assist in demonstrating the value of these changes.
3. Storage and analytics solutions are yet to consolidate adequately.
A quick check of the associated Gartner or Forrester assessments will show a plethora of new brands and traditional players who have acquired/expanded tools in this domain. Architectural and organisational due-diligence are more important than ever when selecting partners in order to avoid broken delivery promised and stranded assets. Enterprise architectural principles and business users prepared to back themselves on data value and the frequency of access are critical when ‘designing’ your investment.
4. Actionable insights need integration into customer facing systems and processes.
The job is only half done when you’ve defined the next-best-product/bundle to attach to your commodity. Ensuring your CRM can create the corresponding offer and that your billing system can invoice and manage the relationship between the commodity and non-utility/fuel product is almost as much of a challenge as getting the insight right. Many customer care and billing solutions promise the capability but the instances of it being done successfully and without risking compliance are very few. Simply getting the ‘bundle’ on the same bill has proved to be a real challenge.
While the above may seem onerous, the ability to simplify a customer’s life whilst ensuring they remain a customer for longer is the key to ongoing relevance for today’s utility!