Utilities: Crafting the future in the backdrop of a pandemic

A global crisis unprecedented in terms of its social and economic toll – these are times that were impossible to fathom just a few months ago. The impact has been felt across industries, some more than others. Utilities and ISOs too are not immune to the impact, though there are differences in the nature of the impact. Beyond doubt, this too shall pass. How soon? And at what cost? – These are questions that most experts do not have answers for. However, one thing is certain, the world will go through a challenging fight, and a time consuming and painful recovery. What utilities do through this crisis and the subsequent recovery is how they will be remembered and what will form the recognition of their brand for years to come.

Focus on customer centricity and customer advocacy – customer centricity has been a good part of what Sapient has been advocating for a decade now. Customer centricity fundamentally aligns a company’s products and services with the wants and needs of its customers. Customer advocacy goes a level deeper - suggesting a product even if the profit margin is less for the company, or recommending a competitor's product because it better fits the customer's needs.

Customer personas are changing fast and key moments of influence are changing – it is a big shift from Julia the new home owner to Julia the recently unemployed or Julia the small business owner who just had to lay off a majority of her staff. How a utility connects, how it markets and how it supports customers will become key to brand building. Transparency is key in times of crisis and open communication invokes trust. Customer touch-points will have to go beyond providing varied online payment and service options. A recent study by Publicis Sapient highlighted low differentiation between large energy suppliers and their competitors when it comes to customer experience. A utility is an essential service and an essential service needs to invoke confidence that their customers can rely on them. This is the time to focus on crafting meaningful touch-points and connecting with customers during key moments of their life.

A crisis tends to shape people’s behaviors and value systems. It stays in memory for long, and how utilities respond will tend to shape future relationships. The key question to ask is – how do we want to be remembered and recognized?

Embracing the digital disruption to achieve efficiencies – the cost of electricity or heating shows up in every household budget. With the world in challenging economic times, the risk of energy poverty is very real. Achieving cost efficiencies and passing it on to customers is what will be expected of every utility – right from customers to government and regulatory bodies.

Efficiencies can be often achieved using simple measures like automation of the most repetitive business processes. Key questions to consider: Are we giving our people the tools to be efficient so as to help them avoid activity traps? Are they spending most of their time assembling data and preparing for presentation of the assembled data? Or, are they able to look deeper and derive insights from the data? How quick and pragmatic have we been in terms of adopting technologies like Robotic Process Automation or Business Intelligence Tools that have been proven to increase efficiency? With the technology capabilities available (thanks to the exponential digital disruption), cost savings significantly exceed the investments required to deploy or accelerate the adoption of these measures.

Measures like reducing infrastructure and operating costs should not be overlooked, for example, reduction in data warehouse footprint without increasing overall risk and exposure. Utilities all over have been looking at cloud technologies as a way to minimize risk and reduce costs. With cloud technologies now acting as entire ecosystems for productivity, planning and operating the business in a truly integrated fashion, there is no better time than this to double down on the transition to cloud.

Employee empowerment – a major part of empowerment is supporting employees through times of crisis. It has been very encouraging to see companies being so focused on commitments to employee safety and support. This has included enablement of remote productivity tools (some additional tips here from our CXO John Maeda). COVID-19 has broken some of the preconceived notions of remote productivity and will likely lead to wider acceptability of work from home policies. It appears that the ramp up on usage of remote productivity tools is here to stay.

Utilities, however, have an added challenge: What about employees providing field services? How are they being supported? How is their safety being ensured out in the field? Will they have to continue navigate paper based checklists and knowledge bases? A few forms, fields and workflows become Lego pieces from which meaningful field service experiences can be constructed. An example of what can be done on this front, we recently helped a client to rapidly set up a digital application through which field service workers could request masks and other protective equipment. The application was implemented in a matter of days using a low code platform and allowed for tracking the requests through completion. It also provides vital visibility to management in planning for supply and support, a true example of agility needed in these times.

Another interesting aspect of field service support is the potential of augmented reality/virtual reality (AR/VR) capabilities. The technology has been around for several years (for ex; Microsoft HoloLens). But never before has been the need so direct for utilities to scale up AR/VR to meet their field service requirements – be it training, remote expert support or collaboration between field and home/office.

Agility in planning, forecasting and operating – demand patterns have been shifting in practically every jurisdiction with demand patterns consistently showing a downward trend. The morning peak has been pretty much flattened with the office rush out of the way. The evening peak is considerably earlier, concentrated around the 6 pm mark as opposed to the 6-9 pm usual.

Source: State Independent System Operators accessed via EnergyOnline.com

Are these demand patterns here to stay? With companies warming up to the idea of work from home policies and employees increasingly confident about collaboration and productivity, this could have a long term impact on the grid.

A few months ago, the biggest forecasting challenges were related to increase in renewables and its impact on planning the grid or the impact the increase in Electric Vehicles (EVs) have on the grid (I was so intrigued by this that we even built a model to predict how EV growth could impact the twin demand peaks). COVID-19 has exposed utilities and ISO/RTOs to uncharacteristic demand fluctuations. And with renewables increasingly starting to influence the supply and economics side of the equation, utilities need to be more agile in their planning and ever more prepared with prediction. This combinatorial disruption begs for increased focus on building advanced supply-demand forecasting models with the ability to run thousands, if not millions, of scenarios with varying sensitivities for input parameters. The exponential technology innovation that we have seen over the decade can make this achievable with relatively low investments. You don’t need supercomputers anymore. Most cloud ecosystems automatically give you the tools to build and scale the models, the computing power required to run the models, and the security needed to keep the data and results safe. All you need is the right skill set to bring them together.

Continued focus on cyber security measures - cyber security has always been a pretty important focus for utilities and ISO/RTOs. There are regulatory frameworks such as the NERC CIP and other compliance measures that utilities already adhere to. In addition, utilities have been pressing authorities like FERC to drive towards cloud-based storage to increase data security and reliability. With work becoming increasingly distributed and key customer touch points becoming increasingly online, cyber security measures are becoming ever more important. The threats are only increasing. For example; NY Times recently reported that there has been a 41% increase in ransomware attacks in 2019 alone, impacting at least 948 government agencies, educational establishments and health-care providers at a potential cost in excess of $7.5 billion. And the recent attack on hospitals and medical research firms shows that for some hackers, conscience is a luxury that they don’t want to afford even in the midst of a pandemic. The damage from an attack is not limited to loss of data alone, but has catastrophic impact on daily operations, something that no utility can afford. This might mean that rather than waiting for regulators to mandate, utilities should lead the way by looking at how other industries are dealing with such threats. For example; looking at some of the most secure federal initiatives in the world (which my colleagues at Sapient's OnPoint Consulting are all too familiar with), as well as the lessons learned from the global finance and retail industries.

It is increasingly clear that a new normal will emerge out of this. Fortune will favor companies that use this as an opportunity to adapt. Utilities will be served well if they use these times to focus on accelerating their transformation.