Becoming a Digital Utility: The ‘What’
and the ‘Why’ of Implementing a
Digital Strategy

Setting the Stage for a Digital Strategy

Across the board, the fundamental ways in which business accomplishes work are undergoing massive change. In particular, new digital technologies are changing the ways in which businesses operate, and opening up new opportunities to better provide information, products and services to customers.

For the utilities industry—facing increasing pressure to improve both operational performance and customer relationships—adopting a strategy to incorporate digital technologies into its enterprise DNA is an imperative.

External pressures on the utility for digital transformation are huge. “As consumers are empowered by the proliferation of IT interfaces and multiplication of communication types, their expectations for borderless everything anytime-anywhere, customer-centric interaction are profoundly redefining the nature of services,” IDC Energy Insights said in a report late last year about new utility business models.1 Because of those heightened consumer expectations, those start-ups and “digitally transformed companies” are turning energy consumers’ heads away from their traditional utility provider, it notes: “The biggest threat that utilities face today is from outside the industry... Nonutility companies—including Google and Amazon, consumer electronics manufacturers, and telecommunication companies—have brands that have better consumer appeal, stronger ability to extract value from data, and deeper relationships with their customers. In addition, they enjoy better customer trust (and much better net promoter scores) and are digitally more mature.”

And while many utilities are adding digital components to portions of their enterprise, their levels of digital maturity still remain relatively low. For example, according to a 2015 study by J.D. Power of 66 U.S. electric and natural gas utilities, while 57 offered an online mobile channel for customers, either through a mobile-enabled website or a mobile app, satisfaction among the customers using their utility’s mobile website or app was lower than among those using the website from a desktop. “Unfortunately, utilities are not meeting customer expectations when it comes to the mobile experience,” said Andrew Heath, senior director at J.D. Power, of the study’s findings.

For the next generation of consumers, who are used to interacting with their business providers via smart phones and tablets, this will not be good enough.

So what’s a utility to do? It all begins with a comprehensive digital strategy.