The Current State of Innovation in the Utilities Industry

The Current State of Innovation in the Utilities Industry featured image

While utilities have been in existence for well over 125 years, the modern day “Digital Utility” is still very much in its infancy. Today’s utilities are faced with an ever-growing set of challenges around increased regulatory scrutiny, increased customer service expectations, and the need to maximize asset performance on aging transmission and distribution networks.

While there was a wholesale adoption of ERP solutions like SAP in the late 1990’s, most utilities covered the basics around Finance, Human Capital Management and Supply Chain. Fast forward 25 years, and the true business benefits associated with large ERP technology investments are still elusive. Many utilities struggle to make the leap from “keeping the lights on” to transforming into a truly efficient digital utility that uses technology to drive Operational Excellence.

Those utilities that do seek to evolve are looking to do so quickly. A short time-to-value, with maximized return on investment over the shortest timeframe possible, is always the desired outcome.

The Most Common Utilities Innovation Goals

As Business Cases are prepared and then scrutinized, targeted improvements in several common areas include:

  • Efficiency gains through consistent and predictable industry-leading business processes across the entire Asset Lifecycle – Plan through Retire
  • Better and faster decision-making as realized via data governance, stewardship, management, transparency, as well as use of advanced analytics across business functions
  • Improved customer service through self-service portals and customer-centric business processes and technology
  • Risk mitigation through knowledge transfer and process documentation
  • Improved regulator confidence through responsiveness, consistency, and reliability of data and information

Going from Meeting to Exceeding Expectations in Utilities

The traditional relationship between customer and regulated utilities has always been predictable, and easily managed. As long as the gas flowed and the lights stayed on, the typical customer didn’t pay much attention until there was a service outage, or they received an unexpectedly high bill. As a result, it was relatively easy to keep customers happy with minimal innovation and investment in technology.

If a utility has not evolved, it’s likely they have face barriers in justifying adoption of new technology. Without innovation, a utility may be left with an archaic landscape that leads to fragmented business processes, siloed data, and intensive manual processing.

Even those utilities that have made at least incremental improvements still find themselves in a challenging situation. The constant state of change can be exhausting, while end users are stuck with a hodgepodge of best-of-breed solutions that lack native integration.

Today’s utility customer has a different set of expectations. High quality customer experience has pervaded every aspect of our lives, and utilities must now meet that standard. It’s no longer good enough to assure a customer that the lights will come back on “soon” - exact restoration times, outage cause, and crew status are now demanded any time there’s an outage.

Regulators have added expectations too, particularly around large-scale events (such as climate change). Customer choice has also become more of an option, driven by municipal initiatives and competition from alternative energy such as rooftop solar panels.

Operational Excellence with SAP EAM to Meet New Expectations

While the task of innovation may seem daunting given the history of change in utilities, it is possible. Operational Excellence is required to keep up to date and utilize the latest updates to SAP Enterprise Asset Management (EAM) systems.

Technology adoption is not a static proposition, it is a continuous journey. There are lessons to be learned from how utilities have met innovation in the past, and there are emerging trends that can almost certainly benefit the utilities industry. Building a program for technology adoption will be essential for utilities to maximize the business benefits from their technology stack and meet growing expectations from consumers and regulators.