How utility companies can use data to improve services

Airbnb turns homes and apartments into hotel rooms. General Electric transforms age-old manufacturing and industrial processes with a data-driven industrial Internet platform.

How utility companies can use data to improve services

 According to, innovative companies across the spectrum are developing new technologies to upend one industry after the next, leveraging rich data streams to outperform the old models, capture market share, and win customers.

The utility sector should take note! Few industries have relied on customer-level data for as long as utilities have: the electricity meter was first patented in 1883. Yet, despite data being so fundamental to their operations, utilities are only just beginning to capitalise on the wealth of customer information they could glean from data they capture every day.

For years, utilities have managed electricity generation, distribution, and supply with limited customer contact, aside from sending monthly bills or fielding the occasional service call. But as energy options increase, customers have more questions about energy than ever before – and they’re relying on utilities to provide direction and answers.

With their industry changing rapidly, utilities are devising ways to race up the learning curve and energise their customer service channels.

To do this, they are turning – at last – to the most under-utilised asset in their portfolio: data. Focusing and investing in mining rich data streams can deliver improvements across all aspects of a utility’s business, from the way they communicate with customers and ramp up new customer engagement programmes to the way they manage the complex energy and financial transactions of large energy users. But what will this change look like? What do utilities need to do to take advantage of the opportunities at play in the new energy market and emerge as smarter, more competitive players?

Assemble the right team

Running a data-dependent business requires different competencies than traditional utilities typically have. Distribution system operations are already a complex task, so utilities are well positioned to embrace the technical challenges of data analytics in customer operations.  Internal analytics teams will bring new skill sets, including understanding how to frame data strategies and identify the business challenges best addressed with data. A core team with sector expertise can be the gateway to developing an internal culture focused on data-driven customer intelligence.

As investments in information software and infrastructure continue to increase, it will be critical for utility IT teams to have the skills needed to implement systems and processes that feed customer intelligence back into existing customer systems like CIS and CRMs.

The mission of these teams is getting ever more critical. Utilities should hire individuals with expertise in machine learning, the Internet of Things, industrial design, flexible thinking, agile approaches, and cybersecurity.

In medicine, an MRI only offers diagnostic value if it is read by a skilled technician or doctor. Similarly, energy data only sings in the hands of someone who knows how to interpret it.

Drive the strategy with help from third parties

Much of the tech sector’s growth has been enabled by seamless partnerships between technology providers. To think more like tech companies, utilities must recognise the opportunities to define best-in-class customer experiences through the creative use of the best solutions that are tested and proven in the market.

Primary technology development takes time and multiple iterations, which translate into excess expenses and risk for utilities and their customers. Rather than accept this risk, why not leverage someone else’s development cycle and free the utility to leverage its core competency: serving its customers well by delivering the services they need.

With platform implementation outsourced, there is room for plenty of innovation within the utility. Carefully tailored programmes can address the needs of unique customer classes and service territories. Efforts aimed at increasing distributed energy penetration can turn a utility into a trusted advisor and energy partner. As customers’ energy portfolios evolve, they will increasingly turn to utilities for pointers to the right solutions and vendors. Innovation helps utilities keep up with the pace of change across the rest of the industry.

Take, for example, the trend of more and more utilities rolling out advanced electricity meters. As business customers look for opportunities to benefit from this technology, they will want to understand how to use meter data. Options could include enrolling in a new rate plan, signing up for a demand response programme, tuning up building operations, or evaluating the potential for on-site energy storage. A utility could provide front-line analysis and link customers seamlessly to qualified third parties to streamline the process.

Embrace the cloud

As utilities look to embrace a more fast-paced, innovative culture while carefully managing costs, cloud computing can be hugely advantageous. Not only are cloud-based solutions often more affordable than on-site or hardware options, they are regularly updated and held to high industry standards for cybersecurity. Cloud-based solutions may enable utilities to deliver new customer offerings more regularly, and improve upon the uptime and security performance of on-premise software.

Buzzwords such as data integration, usability, industry standards, and interoperability have become synonymous with the growth of cloud computing. Not surprisingly, they are also ubiquitous in discussions about the smart grid. Utilities should make them a part of their daily vocabulary, and apply them in the course of building customer strategies.

Data has always been central to utilities. As they become savvier at tapping into the customer insight and intelligence from data, we’ll see them operate more and more like tech companies. With this transformation, utilities can usher in a new era of improved customer service, more efficient operations, better responsiveness to customer needs, and better business performance. Technology can help them do what Airbnb has done for travelers and GE for plant managers: improve customer options and visibility, create direct customer value from data, and capture large scale, actionable insights.


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