In the race to digital transformation, where should utilities start?
Almost every business leader in the utility space and beyond has heard the buzz about “digital transformation.” And for good reason! The right digital capabilities can offer transformative organizational value. But the sheer volume and diversity of different capabilities often discussed under the digital transformation moniker can be overwhelming.
With so many potential digital capabilities to implement, where should your organization start?
While the right answer depends on your unique business needs, our experience suggests that two foundational digital capabilities will provide value for virtually every utility: process automation and analytics. We explain why in the blog below.
What is digital transformation? Where should utilities start?
Digital transformation is being directly driven by the operational challenges faced by utilities today. For example, extreme weather patterns drive newfound pressure on utilities to protect the customer experience through a customer-centric digital transformation to provide more accurate, timely, and reliable ETR data. For a deeper dive into how extreme weather is accelerating the digital transformation of utilities, please see our article here.
Digital transformation, however, is bigger than any one operational concern. Oracle, for example, notes that digital transformation has come to mean “the conversion from manual and analog processes to digitized processes in every aspect of business—including supply chain, ERP, operations, customer service, and more. Essentially, digital transformation helps businesses and other entities create better outcomes by connecting people, places, and things.”
The definition helps capture the sweeping scope and potential of digital transformation. But the potential use cases of digital transformation are so varied that, for many utilities, it can be hard to know where to begin. The ideal starting place should:
- Begin generating tangible operational value sooner rather than later.
- Directly target core business challenges for the utility.
- Take advantage of the operational data the utility is already collecting.
Based on our experience executing successful enterprise-scale digital projects for a number of the largest utilities in North America, two areas consistently fulfill these criteria: process automation and operational analytics. We explain why these two areas constitute an ideal runway for your digital transformation in the next section.
A Digitization Runway for Utilities: Process Automation and Analytics
Digitize Processes and Work: Process Automation
Process automation refers simply to technology capable of automating workflows currently performed by humans. Process automation solutions can range from simple repetitive tasks with minimal decision-making (Robotic Process Automation, RPA), to sophisticated machine learning solutions capable of learning on the job (Intelligent Process Automation, IPA). For a more detailed comparison of robotic and intelligent process automation, please see our blog here.
This broad spectrum of potential use cases is important to understand when utilities are planning their digital transformation, because almost any back office, much less any utility, is currently performing cumbersome administrative tasks that could be readily automated. Invoice processing is one example shared by almost every organization. For utilities, automated natural language processing can play an invaluable role in processing customer requests that are submitted via text-email, or online form. Automation can help even when human customer service reps are still used by sorting and triaging requests, thereby helping human representatives focus on the most nuanced, critical cases.
Such a use case is important because it allows enhanced digital capabilities to begin driving value immediately for almost any utility. Looking forward, true operational automation (see our guide here) can effect a much broader transformation of the day-to-day operations of the utility, but this level of data integration is not a prerequisite to beginning to take advantage of process automation!
Make Data-Driven Decisions: Analytics
Analytics also holds a lot of promise for utilities. Many utilities are already collecting vast quantities of potentially valuable operational data, but most of it goes largely unused. It can be easy to mistake reporting—the aggregation, organization, and translation of data—for analytics and proclaim “mission accomplished” prematurely. But data reporting is fundamentally static; it can provide utility decision makers with well-organized information, but reports themselves often cannot answer fundamental business questions. True operational analytics should go further, analyzing the trends and relationships apparent in the data to generate novel business insights. For a deeper dive into the difference between operational reporting and analytics (and why it matters) please see our blog here.
Analytics can be a valuable starting place for digital transformation because the requisite data is likely already being collected—a successful analytics implementation is simply a matter of the utility extracting the full potential value of the data generated by the business. Furthermore, process automation can work synergistically with operational analytics, helping to process more data and feed the results into analytics solutions to help automate data collection and digitization.
Learn More About Digital Transformation: Beyond Analytics and Automation
Process automation and analytics are just two of many types of capabilities often discussed under the umbrella of “digital transformation,” but they warrant particular attention. In addition to functioning as accessible launching pads for a broader digital transformation, both of these capabilities are truly critical. Robust analytics are an essential catalyst for beginning to nurture a more data-driven organizational culture. Process automation can immediately help your digital investments begin generating ROI, allowing human workers to move away from monotonous work, and toward the areas where they can generate the most value.
These two areas will be important for virtually any utility. The only question is which, if any, additional capabilities will be priorities for your organization.
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