Digitalization in the energy industry - in real life
Digitalization has changed corporate life forever, but sometimes it is less obvious how it has had an impact in real life. Even though it is a perennial topic of discussion, business managers seldom talk about digitalization IRL—in real life. In this blog Olof Ferenius discusses one of the most commonly raised questions: how can energy companies leverage digitalization IRL?
In recent discussion with the managing directors of various energy utility companies, I noticed that digitalization has become the big industry buzzword. It’s the focus of keynote addresses and entire conventions. Wherever you go, everybody is talking about it. But less often do business managers discuss digitalization IRL—in real life.
Many managers make statements like, “Digitalization is the most important thing for our business.” But when I suggest a meeting to discuss ways to fully utilise digitalization, the most common response is something like, “Great! I will book a meeting with my IT manager!.” And this is when I begin to worry that they do not recognise the full potential of digitalization as a business tool.
Luckily, some companies are starting to understand how to leverage digitalization, but many are still searching for digital solutions that work for their customers. Successful transformation to a digitalized business demands a flexible 24/7 customer experience; this helps you to serve your customers better and provides every customer with the exact personalized service they want.
In this post, I give a few concrete energy industry examples in which digitalization has made substantial differences IRL. These simple examples—from reducing customer service demands to offering mobile payments and uniform customer experiences—show how you can improve efficiency and customer experiences or even find new revenue streams.
What is digitalization for energy companies IRL?
A manager of a large energy utility company recently asked me, “Do you know what the most common question received by our customer support personnel is? Customers most often ask what their customer number is!” Monitoring their energy consumption and billing in real-time is one of the most valued services by contemporary energy customers, but in order to login in to their customer pages, a customer number is needed. But who can actually remember or find it when they need it?
Similarly, last week a managing director made the following point to me. “Isn’t it strange that two individuals can send money between themselves via a mobile app, but our customers still don’t pay bills using their mobile devices?” -.
How can digitalization resolve these problems? A simple mobile application for monitoring your energy consumption on the go would do the trick. Another option is making a simple login for My Pages based on your standard mobile bank ID. These changes would reduce customer service desk calls by 50%, whilst increasing customer satisfaction dramatically.
Utility companies face similar challenges when renewing customers contracts. Today, they call customers or post new paper contracts, which customers must read, sign and post back. Why not use SMS instead? Customers could receive contracts via mobile and accept them through text messages instantly.
In the second example, It is clear that millennials already utilise simple mobile apps for banking. Currently when a bill is due, you get an e-invoice, but in practise, you must log into your account to pay it. Similarly, wouldn’t bill payment be better if you simply got an SMS invoice that you could pay by mobile directly?
These examples show that digitalization can reduce costs dramatically and improve operational efficiency by decreasing customer service calls and increasing customer satisfaction. This remarkably efficient system is suitable for modern energy customers, and it could yield substantial savings on invoices.
These are not just a matters of efficiency, but also a ways to position yourself as a customer-driven business. From the customer's point of view, it is important that digital services are easy to find and use, meet their needs and provide accurate information. Expectations are met when the service allows the customer to get achieved what they want and when they want it. From the perspective of the service provider, an excellent service runs via automated processes, with minimal manual work.
Digitalization IRL: pushing energy companies to evolve
Why then does everybody talk about digitalization, but very few drives it forward IRL? To take advantage of digitalization, IT and business concerns must be interconnected, but many companies do not realize this quickly enough. You must evolve the digital mode where “Business is IT”. Digitalizing processes requires time, money and business involvement.
In real life, digitalization provides three crucial cornerstones: (1) improved customer experiences that retain customers, (2) more efficient and productive operations that therefore reduce costs and (3) new opportunities in the form of new services and products.
For example in the highly competitive and commoditized energy retail market, it is crucial to recognize digitalization as the key to success. Companies that retain customers by offering great customer experiences will advance, while other companies may lose market share.
This starts by realizing that digitalization is not merely an IT concern but a business-wide issue. When IT drives digitalization, the broader priorities of your organisation may not be met. Rather, digitalization must be facilitated by your IT department—but driven by your business model.
Read more: Recharge your energy business