The magnitude of opportunity and change facing utility executives is both exciting and overwhelming. With many facets of the business shifting all at once, it is difficult to balance successfully running today’s utility while transforming into a more efficient, more secure, customer-centric and safer organization. Through our observation of many utility environments, we believe that focusing on an organization’s increasingly digital operating foundation provides a way to link and align the many facets of change. This foundation is both a source of some issues and, eventually, the key to addressing others.
Through our research, we have identified six interdependent issues common among electric utilities, and most of which also apply to water and gas utilities:
- Managing the exponential increase in digital data
- Securing rapidly evolving data and operations
- Connecting customers into the organization’s digital foundation
- Managing DERs effectively – setting the stage for improved DER operating models
- Dealing with regulatory uncertainty
- Leveraging “digital” solutions to generate meaningful operational improvements
The U.S. utility business model is faced with profound changes, including how energy will be produced, delivered, and consumed in the future.
Forces ranging from distributed technologies and changing consumer expectations to regulatory uncertainty and a changing workforce are requiring utilities to transform and adapt. To thrive amid such change, utilities must modernize their aging transmission and distribution (T&D) infrastructure while embracing new digital technologies. Enterprise data analytics platforms, distributed energy resource management systems (DERMS), and advanced distribution management systems (ADMS) are examples of newer technologies being adopted by utilities that are enabling utilities to integrate different elements of their digital foundation into new and more efficient operations. This is a lot to digest – especially when trying to tackle many challenges independently.
These issues share a common solution: digital transformation – and more specifically, a utility’s accelerating capabilities for collecting and using digital data. This foundation is a source of challenge today as utilities struggle to capture, move, store, and secure data. At the same time, solidifying that foundation will be essential to begin using data to improve operations and transform the utility-customer relationship and the future operating model.
Utilities that are proactive and give sufficient attention to these issues should find themselves in a good position to not only strengthen their current infrastructure but also lay the right foundation to develop their operating model for the future.
Social, economic, and even political forces will continue to shape the size, look, and feel of the utility of the future. Although that future still holds much uncertainty, the one common thread among the key issues facing utilities is that thriving will require a solid digital foundation. Utilities can use evolving digital innovations to manage disruption head-on and explore new areas of opportunity while maintaining their relentless focus on operational excellence. Focusing on both today and tomorrow will drive a compelling value proposition that improves customer service, optimizes operations, safeguards infrastructure, secures information, and attracts and retains talent.
Embedding digital DNA into an organization’s culture requires transforming its people, processes, and technology. This begins with the foundational investments in AMI, distribution automation, customer relationship management (CRM), and customer portals that digitize previously manual information; communication capabilities for moving that data; centralized data storage; and then data analytics capabilities that enable a utility to gain insight from the data. From there, the utility can begin using that digital foundation to optimize existing processes and manage high-risk business areas, such as customer experience and grid operations. Utilities that adapt and embrace the digital world around them will be successful in creating a customer-centric organization capable of integrating their increasing number of digital assets and respond to evolving customer expectations and drive new value to their stakeholders.